UK Living Sector 2026: Regulatory pressures, new trading platforms and more accessible public markets
Market snapshot: A resilient 2025 leads to acceleration in 2026
The Living Sector’s M&A and investment market proved resilient in 2025, with activity focused on platform and portfolio trades, forward‑funding and a notable return of large student housing deals. Purpose Built Student Accommodation (PBSA) was the standout, with large transactions including QuadReal’s purchase of Apollo’s c.3,500‑bed PBSA portfolio hitting the headlines, while Build to Rent (BTR) remained active, particularly in development funding and single‑family pipelines. Against this, investors balanced improving liquidity with practical challenges around planning, building safety and evolving tenancy rules, which shaped pricing and diligence.
Our team of Living Sector experts were on hand throughout the year to support clients through these opportunities and challenges. We were also pleased to welcome Ed Morgan as a Partner in our Corporate team. Ed has specialist expertise in real estate and funds and is highly regarded for his work with indirect real estate structures, investment funds, joint ventures, management arrangements for property investment and development, investment and restructuring, private M&A and real estate acquisitions and disposals.
We expect capital deployment into the Living Sector to accelerate in 2026, led by PBSA and BTR. We expect pricing and diligence in 2026 to continue to reflect finance costs and regulation, but clearer building safety processes and greater certainty on how PBSA sits under the Renters’ Rights regime should help buyers and sellers meet on value. For a deeper dive into PBSA, see What are the trends in the purpose-built student accommodation market in the UK over the last 12 months, and how will they change in the next 12-months?
Portfolio and platform consolidation should gather pace as investors seek scale, stronger operating capability and access to development pipelines, while forward funding, a model also favoured by housebuilders such as Vistry Group, remains the main route to new supply. Recent industry surveys indicate that UK construction output contracted for a twelfth consecutive month in December 2025, with housebuilding activity at its weakest since 2020. A slowdown in housebuilding is a symptom of stress across the UK construction ecosystem, and in that environment, institutional forward funding is likely to become even more important in unlocking delivery and will influence pricing, programme risk and contractor selection across PBSA and BTR. Foreign capital, including European investment, is likely to provide liquidity for scalable, income led strategies, while we also anticipate selective recapitalisations of older assets requiring significant spend on safety and energy efficiency.
The main variables for deal terms and risk allocation will be: i) the phased start of the Renters’ Rights Act from May 2026, ii) enforcement timetables and second staircase rules applying from late September 2026, and iii) planning deliverability under evolving national and mayoral policy.
Within this investment backdrop, we predict that some of the 2026 hot topics for the Living Sector, from a corporate perspective, to be regulatory considerations, the new Private Intermittent Securities and Capital Exchange System (PISCES) – which can offer private companies the opportunity to provide periodic liquidity to their shareholder base, changes to rules for listed companies aimed at reinvigorating the UK public markets, and ongoing implementation of the Economic Crime and Corporate Transparency Act 2023.
Regulatory considerations
The Renters’ Rights Act received Royal Assent in late 2025, with phased commencement from 1 May 2026; key changes include ending fixed‑term ASTs and Section 21, moving to periodic tenancies and creating routes for PBSA exemptions via membership of a Government‑approved code, with details to be set in secondary legislation. These changes may influence deal terms, diligence and operations in 2026; for more on the Act and its impact on BTR and PBSA, see Renters’ Rights and Build to Rent: Top 5 key changes operators and investors need to know about and Renters’ Rights and Student Accommodation: What is the latest as the Act obtains Royal Assent?
Building safety has been a hot topic in the Living Sector for many years and upcoming changes will continue to drive delivery risk and pricing in 2026, including the second staircase requirement for new residential buildings over 18 metres from 30 September 2026 and the Building Safety Levy from 1 October 2026, while the Building Safety Regulator’s process improvements should help with gateway throughput. Planning policy shifts, including ‘grey belt’ signals and a supportive stance on residential alternatives in London, will be central to pipeline value; for detailed analysis of upcoming building safety reforms, see Building Safety Lookahead: 2026 will see the reform of the BSR, introduction of the Building Safety Levy and more.
Fire safety will also move up the agenda in 2026 as the Fire Safety (Residential Evacuation Plans) (England) Regulations 2025 take effect on 6 April 2026, requiring the “responsible person” for high rise residential buildings to prepare and keep under review a building wide evacuation plan, set out arrangements for residents who may need assistance, provide prescribed information to the local fire and rescue service, and communicate clearly with residents. We expect these obligations will influence diligence and day one readiness in PBSA and BTR deals, including checks on policies, records and resident communications, and clear allocation of compliance responsibilities in transaction documents; for detailed guidance, see Understanding the Fire Safety (Residential Evacuation Plans) (England) Regulations 2025: The Living Sector.
Private Intermittent Securities and Capital Exchange System (PISCES)
PISCES is a new type of regulated trading platform that will facilitate the secondary trading of unquoted company shares on an intermittent basis. A PISCES platform can be operated by certain entities authorised by the Financial Conduct Authority (FCA), who successfully apply for a PISCES Approval Notice. Currently, the London Stock Exchange Group and JP Jenkins have both received approval from the FCA to operate a PISCES platform, with Asset Match’s approval expected to be imminent.
PISCES can offer private companies a structured way to provide periodic liquidity for existing shareholders and employees, and to broaden access to professional and other eligible investors, without moving to a public market. For living sector businesses, PISCES can provide orderly liquidity events that let existing shareholders and employees sell a limited number of shares, refresh the register as early co investors exit and new investors join, and allow management to realise a small, pre agreed part of their performance equity—all while the company remains private. Companies retain flexibility, within operator rules and FCA oversight, around the timing of trading events, investor access and price parameters, while operating within a tailored disclosure regime geared to sophisticated participants. It is important to note that PISCES is a secondary market only and is not a capital raising venue. For more on the rationale for and key features of PISCES click here - PISCES Regulations come into force today and for more on the FCA’s PISCES Sourcebook click here - Key aspects of the FCA’s PISCES Sourcebook.
Public Offers and Admissions to Trading Regime and AIM Rules change
The UK’s prospectus framework is being overhauled under the Public Offers and Admissions to Trading Regulations 2024 (POATRs), which were enacted in January 2024. The POATRs established in secondary legislation the regulatory framework for a new prospectus regime which, once implemented on 19 January 2026, will replace the current UK Prospectus Regulation. The Financial Conduct Authority (FCA) published final rules to implement POATRs in July 2025, introducing the new Prospectus Rules: Admission to Trading on a Regulated Market sourcebook, which aim to simplify the complex prospectus regime inherited from the EU - reducing the burden on issuers while ensuring that investors continue to receive sufficient information.
IPOs on regulated markets will still require an FCA approved prospectus, but secondary capital raisings will be simpler - the threshold below which no prospectus is required increases from 20% to 75% of existing issued share capital (100% for closed ended funds). For listed living‑sector companies, this supports quicker follow‑on raises to fund pipeline delivery, building‑safety and retrofit capex, or accretive acquisitions of BTR/PBSA portfolios, without triggering a full prospectus. The FCA’s rules also streamline admissions processes for further issuances, reduce the minimum prospectus availability period for IPOs to three working days, and introduce a liability framework for protected forward looking statements, alongside targeted climate related disclosures. For AIM and other primary multilateral trading facilities, a new “MTF admission prospectus” will apply to initial admissions and certain reverse takeovers, with operators setting detailed content standards. A complementary public offer platform regime will sit alongside these changes from January 2026 for primary offerings outside the public markets.
These changes complement the significant overhaul of the FCA’s Listing Rules in July 2024, whereby the premium and standard segments were replaced by a single category for equity shares of commercial companies, with more flexible eligibility criteria, greater accommodation of dual class share structures, and a disclosure based approach to significant and related party transactions. The London Stock Exchange is also currently engaging market participants on proposed changes to the AIM Rules for Companies and further formal consultations are expected in H1 2026.
Economic Crime and Corporate Transparency Act 2023
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) contains wide-ranging reforms to the way companies and limited partnerships in the UK are formed, managed and operated, and is a key legislative effort by the Government to enhance the prevention of financial crime in the UK. Since ECCTA received Royal Assent in 2023, its implementation has been taking place in a gradual manner.
ECCTA is far-reaching and impacts on all UK companies, whatever the sector they operate in. In November 2025, the new identity verification (IDV) regime came into force. IDV introduces mandatory identity verification procedures whereby all new directors, members of LLPs and PSCs will need to verify their identity before taking up their positions. In respect of all existing directors, members and PSCs, there is a transitional period so that:
- all existing directors and members of LLPs must have their identity verified before the company's next confirmation statement date following 18 November 2025; and
- all PSCs must have their identity verified within 14 days of the start of their next birthday month (e.g. if a PSC's birthday is 19 December, they must complete their IDV check by 14 December).
PSCs who are also directors of the same company must notify Companies House of their personal IDV code with the company's next confirmation statement, and separately in respect of their position as PSC, in each case respecting the time limits noted above.
For the Living Sector - where SPV‑heavy structures, JV holdcos and fund vehicles are common - ECCTA has practical impacts on transaction timetables and governance. Buyers and sellers should factor IDV into the transaction timetable for NewCos, officer changes and PSC updates, and consider using Authorised Corporate Service Providers to avoid last‑minute delays.
From 18 November 2025, companies are also no longer required to maintain a local register of directors, register of directors’ residential addresses, register of secretaries and PSC register. Instead, companies must provide this information directly to Companies House, where it will be held centrally. New appointments and changes to information relating to existing appointments (for example, a director moves house) must be notified to Companies House within 14 days of the change.
Further implementation of ECCTA provisions is expected in 2026, though exact dates are yet to be announced. It is expected that by the end of 2026, Companies House will (amongst other things) make identity verification of the presenters a compulsory part of filing any document; require identify verification of nominated officers of RLEs, corporate directors and individuals, who file information on behalf of a company at Companies House, and facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies.
For more on planning, construction and occupational and operational matters in the Living Sector may be impacted by legal developments in 2026, see What legal developments can the Living Sector expect as we approach the end of 2025 and look ahead to 2026?
Here to support your strategic goals
In this article, we have highlighted a selection of the challenges and opportunities that participants in the Living Sector will face in 2026. The market is improving but remains selective and policy‑led, and we are cautiously optimistic about the year ahead. We stand ready to support our Living Sector clients - established and emerging - to deliver their strategic goals in 2026 and beyond.
