Commercial property law changes coming in 2026

As attention turns to 2026, commercial property law in England and Wales is set to undergo substantial reform. From stricter energy performance standards to revised business rates and a major shift in rent review mechanisms, the year ahead will reshape how landlords, tenants, investors and property managers operate. These reforms reflect both sustainability targets and increasing pressure for fairness and transparency across commercial leasing and taxation.

The changes bring both opportunity and challenge. Understanding how rights and obligations will alter — and planning ahead — will be essential to avoid disruption and position commercial assets effectively. Below is an overview of the key changes expected in 2026 and what they mean in practice.

Energy Performance Certificates (EPCs)

Following the Government’s consultation on reforming the Energy Performance of Buildings (EPB) framework, significant updates are expected in the second half of 2026. The proposals aim to modernise EPCs and related compliance tools.

Key areas of reform include:

• Enhanced EPC data showing multiple performance metrics, including fabric efficiency, heating efficiency, smart-technology readiness, energy use and carbon emissions, rather than a single score.
   
• Shorter EPC validity periods, potentially reducing the current ten-year lifespan for new certificates.
   
• A requirement for landlords to maintain a valid EPC throughout a tenancy, rather than only at grant or renewal.
   
• Possible inclusion of listed and heritage buildings within EPC and MEES (Minimum Energy Efficiency Standards) requirements.
   
• Stronger enforcement measures and increased penalties.

The Government’s response to the consultation remains pending, but the sector is widely preparing for 2026 implementation.

Business rates

On 1 April 2026, a new business-rates revaluation will take effect in England, updating rateable values based on rental values as at 1 April 2024. The aim is to redistribute liabilities more fairly in line with market changes.

Key implications include:

• Rateable value adjustments: properties with rising rental values are likely to see increases in their rateable values, while those with weaker rental evidence may see reductions.
   
• From April 2026, England will adopt a revised business-rates multiplier structure. Retail, hospitality and leisure properties with a rateable value below £500,000 will benefit from lower multipliers, while properties with a rateable value of £500,000 or more will fall under a higher “high-value” multiplier.
   
• Transitional relief will phase in larger increases following the revaluation.
   
• Valuation challenges will continue to be available through the Check, Challenge, Appeal process.

The reforms create a clearer distinction between lower-value RHL properties, which may benefit from reduced liability, and larger commercial premises, which are likely to face increased costs. The financial impact will depend on the post-revaluation rateable value and eligibility classification, so early review of rateable values, budgeting and lease provisions will be essential.

Post-Budget update (November 2025)

The Budget confirmed the revised multiplier structure in England from April 2026, with lower rates for qualifying retail, hospitality and leisure properties below the £500,000 threshold funded by higher multipliers on larger premises. Final multiplier levels and eligibility definitions are still awaited, and the overall impact will depend on the outcome of the 2026 revaluation.

Business Property Relief

From 6 April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) will be combined into a single £1 million allowance at 100%. Any qualifying value above this threshold will receive only 50% relief, creating an effective 20% inheritance tax charge on the excess.

Shares in unlisted companies, including AIM-listed shares, will also receive only 50% relief — a significant shift for investors and business owners planning succession or corporate restructuring.

Lease review mechanisms

The English Devolution and Community Empowerment Bill proposes a ban on upwards-only rent reviews in new commercial leases. The reform has attracted considerable attention as one of the most significant proposed changes to commercial leasing in decades.

Key elements include:

• Application to new leases only, including lease renewals (statutory or contractual).
   
• Prohibition on contractual agreements to circumvent the ban.
   
• Tenant-triggered rent reviews permitted where traditionally reserved for landlords.
   
• Applicability across all commercial property sectors.

The Bill has completed its first reading in Parliament and further debate is expected. If enacted, it could create a two-tier leasing market, with newer leases becoming more balanced and potentially more appealing to occupiers.

Conclusion

The scale of reform means many businesses will need to take a closer look at current commercial leases and property portfolios ahead of the 2026 changes. Early assessment can highlight where amendments, renegotiation or updated compliance measures may be required, reducing the risk of unwelcome surprises later.

Nathalie Mackinnon, commercial property solicitor, comments:

“The reforms arriving in 2026 will reshape the commercial property landscape and have a real impact on investment decisions, leasing strategy and operational planning. Staying ahead of change will be essential for landlords, tenants and advisors who want to protect value and manage risk.”

Our commercial property solicitors provide guidance on legislative updates and support clients in planning commercially sensible responses to change. Get in touch to speak with our commercial property team.