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Mixed-Use Property: What the New Law Means for You

06 May 2026

Mixed-use properties are a common sight across the UK.

From flats above shops to offices with residential accommodation, mixed-use properties can be attractive investments, offering both commercial and residential income streams.

But from 1 May 2026, the legal landscape is changing.

The Renters’ Rights Act 2025 introduces major reforms to residential tenancies, and if you own or are thinking of buying a mixed-use property, it’s important to understand how these changes could affect you.

What’s Changing for Residential Tenancies?

The biggest shift is how residential tenancies are structured and ended.

From May 2026:

• Assured Shorthold Tenancies (ASTs) will be abolished
• All tenancies will become rolling (periodic) agreements with no fixed end date
• Section 21 “no fault” evictions will be removed

This means landlords will no longer be able to regain possession simply by giving notice. Instead, they must rely on specific legal grounds, such as rent arrears or a genuine intention to sell.

For tenants, this brings greater security. For landlords, it means less flexibility.

Why Mixed-Use Property is More Complex

With mixed-use property, you’re dealing with two different legal systems at the same time:

• The residential element, now governed by the new tenancy rules
• The commercial element, typically governed by the Landlord and Tenant Act 1954

These systems operate independently.

In practice, this means:

• You cannot use commercial arrangements to remove a residential tenant
• Ending a commercial lease does not automatically give you possession of the residential part
• Your long-term plans (such as redevelopment or vacant possession) may be harder to achieve

This is where many property owners are caught out.

Planning Ahead: EPC Requirements

Energy efficiency rules are also tightening and again, mixed-use properties are affected in different ways.

Residential properties

• Must reach EPC rating C by 2030
• New assessment methods are expected from 2026-2029

Commercial properties

• Currently require EPC E
• Expected to rise to EPC B by 2030

Each part of the building must be assessed separately, with its own certificate and compliance plan.

Assuming one EPC covers the whole property is a common and costly mistake.

Buying a Mixed-Use Property: What to Check

If you’re considering a purchase, due diligence is more important than ever.

Key areas to review include:

• Residential tenancies – what’s in place and what rights the tenant has
• Possession plans – how realistic your timeline is under the new rules
• Existing notices – particularly any Section 21 notices before the law changes
• EPC ratings – for both residential and commercial parts
• Deal structure – including leases, rights, and future plans for the property

Understanding these factors early can help avoid delays, renegotiation, or unexpected costs.

Already Own a Mixed-Use Property?

Now is the time to review your position.

Ask yourself:

• Will your current residential arrangements still work after May 2026?
• Are your commercial leases aligned with your long-term plans?
• Do your EPC ratings meet future requirements?

If not, taking action now can give you more flexibility and avoid pressure closer to key deadlines.

The Renters’ Rights Act 2025 is one of the biggest changes to residential property law in decades. For mixed-use property owners, it adds another layer of complexity to an already detailed area.

Whether you are buying, selling, or managing a mixed-use property, understanding how these rules interact is essential.

How We Can Help

If you own or are considering buying a mixed-use property, getting the right advice early can make all the difference.

We regularly support clients across Dorset, including Bournemouth, Poole, Christchurch and Highcliffe, with clear, practical advice on property transactions and ongoing management.

Call us on 01202 526343, or get in touch via our website to arrange a consultation: Contact Us AB Solicitors For Your Legal Needs. We’ll help you understand your position and plan ahead.

 

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