What's coming up? Ten topics for senior living investors to bear in mind

The Government published a Commonhold White Paper in March 2025, discussed here, and recently published draft legislation and a consultation summarised here.  The new legislation would, if implemented:

• mandate commonhold for new flats;
  
  
• make it easier to convert existing leasehold flats to commonhold;
  
  
• implement the majority of the Law Commission's recommendations in its 2020 report to make commonhold tenure more workable; and
  
  
• press ahead with leasehold reform, particularly capping ground rents in existing long residential leases at £250 per annum and implementing the Leasehold and Reform Act 2024 including increasing transparency on building insurance fees, and introducing measures to strengthen leaseholder protections over charges and services.

Most senior living flats are sold leasehold. It remains to be seen whether (and to what extent) the sector will be exempt from the proposed changes and, if so, how the sector can navigate the very negative publicity as to leasehold that has accompanied this project of legal change.

The English Devolution and Community Empowerment Bill contains provisions that, if enacted, would override contractually-agreed rent review provisions in new commercial leases and allow upwards-and-downwards provisions in their place, as discussed here. This would impact on all business leases granted after the Bill is enacted, except for those granted pursuant to a pre-existing agreement for lease.  Business leases are defined by reference to the Landlord and Tenant Act 1954 (both those with and without security of tenure) and is therefore limited to occupational leases (as opposed to headlease or investment leases) which would include many operational leases within the senior living sector.  The Bill entered the Committee Stage in Parliament on 20th January 2026 for detailed examination.

The New Towns Taskforce report was published in September 2025, as discussed in an earlier briefing, and recommended twelve locations as the start of the next generation of new towns.  The report recognises that there is a lack of appropriate housing for older people but falls short of recommending a baked-in solution for this.  It will therefore be important to keep abreast of the evolution of these new towns, as they represent an exciting opportunity to ensure that retirement housing forms an integral part of the new landscape.

The Renters' Rights Act 2025 will bring about a once-in-a-generation shift in the residential private rental sector, abolishing ASTs with retrospective effect and replacing them with assured tenancies. As explored here, the first stage of its implementation will start in May 2026.  Whilst most of the changes will likely only need an adjustment to existing operator practices, the main issues of concern for senior housing operators who rent their properties under assured tenancies are likely to be:

• difficulties increasing rents because tenants are incentivised under the new regime to dispute any proposed rental increase;
• increased costs due to the uptick in regulatory requirements, the inability to recover damages caused by pets that (together with other breaches) exceed the standard 5-week deposit; and
• greater regulatory risk – it is not yet known or understood how the Ombudsman will operate, what the new database will require from landlords, or how (cash-strapped) local authorities will exercise their new powers.

In the wider PRS sector, there are significant concerns as to the ability to recover vacant possession from tenants and the risk of increased voids as tenants are not required to have minimum terms. This is less likely to be of concern to the senior housing sector due to the nature of its customer base.

As explored here, the new building safety levy, under the terms of the Building Safety Act 2022, will apply to all new residential developments in England from 1 October 2026.  It will be calculated using the building's gross internal area, including communal spaces, and the rates per square meter will be set by each local authority to reflect the average house prices in that area.  A 50% discount will apply to 'brownfield' land.  This will make viability more challenging for all residential schemes including senior living.

The Planning and Infrastructure Act 2025 was designed to speed up development of housing and major infrastructure projects by streamlining planning processes.  This includes increasing planning fees, implementing training for planning committees, reducing the number of decisions referred to them, and creating a Nature Restoration Fund to offset environmental impacts instead of site-specific mitigation measures.  It is hoped that these reforms will make it easier and quicker for developers to obtain planning consent for all housing, including senior living.

The Employment Rights Act 2025 paves the way for significant reforms to UK employment law, with the key changes to be phased in starting from April 2026.  As discussed here, the much-publicised reduction of the service requirement for unfair dismissal claims and the removal of the compensation cap are expected to take effect in January 2027.  This will be of concern to operators in the senior living sector as employment costs represent a significant part of their fixed costs, and the quality of staff constitutes a major part of their consumer offering.

The Levelling-up and Regeneration Act 2023 permits the Government to set up a database of contractual controls to increase transparency around the control over land for development.  This follows from a 2020 consultation ' Transparency and competition: a call for evidence on data on land control' and will provide information about ownership as well as agreements like options, conditional contracts, and pre-emption rights held by developers. It is due to launch later this year and could apply to contracts going back as far as 2021.  Senior housing developers will be concerned that the publication of their plans for future developments may harm their businesses to an extent which is disproportionate to the public benefit offered by this enhanced transparency.

The Warm Homes Plan was published earlier this month and sets out the Government's approach to cutting people's energy bills and upgrading the energy efficiency of homes.  As discussed here, the key aspect of interest to the 'for rent' part of the senior living sector is that the MEES regime will, after long discussion and anticipation, be changed so that the minimum EPC rating for rental homes will be level C from 2030 and that the amount that landlords have to spend on any required upgrades will be increased from £3500 to £10,000.  This is unlikely to impact on the top end of the sector, where purpose-built schemes are usually highly energy-efficient, but may be of more concern if historic buildings have been incorporated into a scheme.

In the 'for sale' model, the Plan states that the Government will soon publish its response to the Future Homes and Buildings Standards consultation, including the standards’ full specification, and intends to lay the associated regulations in the first quarter of this year.  Under these standards, all new homes will have to incorporate low-carbon heating, high levels of energy efficiency and solar panels by default.

2026 looks like a vibrant year for the sector, with high investor appetite and a maturing market.  Contending with the legal issues discussed above, investors have a busy year ahead!