Real Estate Focus - March 2025

Supreme Court clarifies problematic point on boundary disputes and adverse possession

The Supreme Court's judgment in the case of Brown v Ridley [2025] UKSC 7 on 26 February will come as welcome clarity to those dealing with adverse possession claims and boundary disputes under the Land Registration Act 2002 (LRA 2002).

Facts of the case

Mr Brown, the respondent, purchased a plot of land in 2002 and the Ridleys became registered owners of adjacent land in 2004. A dispute arose in relation to a strip of land running along the boundary between the two pieces of land. According to Land Registry plans, the strip formed part of Brown's land, but the Ridleys had mistakenly believed it had formed part of their property and had consequently used the strip as part of their site for the building of a new property. In 2018, as part of the planning process to erect the new property, the Ridleys ascertained that the strip of land was not registered in their ownership. They submitted an application for adverse possession of the strip of land in December 2019, to which Mr Brown objected.

LRA 2002

Schedule 6 of the LRA 2002 sets out the process on which adverse possession of registered land can be relied on. Under this process, certain conditions must be satisfied. One of the conditions is that "for at least 10 years of the period of adverse possession ending on the date of the application" the applicant must have had reasonable belief that the application land belonged to him/her.

The main issue of the dispute being considered by the Supreme Court was the construction of this "10 year condition", which could be interpreted one of two ways:

• the ten year period of reasonable belief has to end on the date of application; or
• any period of ten years of reasonable belief within the period of adverse possession is sufficient.

Mr Brown contended that the 21 month delay between the time at which the Ridleys realised the strip of land was not within their ownership (i.e., the point at which their "reasonable belief" ended) and them making the application for adverse possession meant the "10 year condition" was not satisfied. By contrast, the Ridleys relied upon the second interpretation, arguing they held a reasonable belief that the land was within their ownership for a period of 10 years before they made the application, albeit their reasonable belief was lost some time before the application was made.

Decision

The Supreme Court unanimously decided in favour of the Ridleys and the second interpretation of the "ten year condition", that any ten year period of reasonable belief was sufficient.

The problem with the first interpretation is that it required a person to make an adverse possession application as soon as they learned that the property is not registered to him/her, which could lead to unnecessary dispute and litigation, which is not what Parliament could have intended. Consideration of boundary issues requires time, as people deliberate the situation and take advice on making an appropriate application - "an application for registration of title to adjacent land along an undefined…boundary is not something which can be put together in an afternoon".

Commonhold - re-invigoration or complication?

In its recent White Paper released on 3 March 2025, the government confirmed its commitment to ensuring "that commonhold becomes the default tenure". This is in preference to the "feudal leasehold system" which has been around for hundreds of years, and which the government is (currently) trying to reform, but in due course, vows to bring to an end.

Whilst this approach might be a headline-grabber and may seem like good news for leaseholders, we explore whether commonhold is really going to be the "simple" model that homeowners have always hoped for.

What is commonhold?

On paper it is simple: people living in units within a building / estate own and exercise control over the management, shared facilities and related costs of those buildings / estates, through membership of a Commonhold Association. A "Commonhold Community Statement" (CCS) defines the rights, responsibilities and rules for all unit holders within a commonhold and is essentially the governing framework for the commonhold association.

The advantage is that it transfers all decision-making and powers to homeowners so that they have a greater say over how their homes are managed and flexibility to meet the changing needs of the buildings / estates and the residents within them. In addition, instead of the value depreciating over time (as is inevitable when lease terms decrease and/or ground rents increase) the residents' interests are preserved in perpetuity.

Commonhold - already a failed tenure?

From a statutory point of view, commonhold has actually been on the books since 2002. However, it has failed to take off for a number of reasons, including the complexity of the procedures to establish commonhold, and lenders not being willing to provide security over properties owned on a commonhold basis.

The Law Commission's July 2020 report: "Reinvigorating commonhold: the alternative to leasehold ownership" (commissioned by the previous Conservative government) referred to commonhold as a preferred form of ownership and made various recommendations to make the current process simpler, more flexible and cost-effective for leaseholders, and more attractive for developers and lenders. These recommendations have significantly informed the current government's commonhold White Paper which ultimately seeks to illustrate how commonhold should not be touted as a failure, but instead provide consumers and industry professionals with a greater understanding of how:

• commonhold will operate in the future;
• the current model might be updated to account for the known issues; and
• those changes will benefit consumers and industry members.

How will the government transition to commonhold?

The government's intention to "reinvigorate commonhold" will take the form of a comprehensive new legal framework, a draft of which will be published later this year, followed by the Leasehold and Commonhold Reform Bill in due course.

This will be backed up by a ban on the sale of new leasehold flats (a necessary step to ensure the government's commitment to commonhold becoming the default tenure), with a consultation on how best to approach this being launched during the course of the year.

What are the proposed reforms?

Enabling commonhold to work for all types of development

To enable commonhold to work for larger developments, the government will introduce new flexibilities allowing commonhold to include separate sections of a building / estate and separate heads of costs so only those with access to those sections / services have a say in their management. Developers will be given more flexible rights around how to build and sell a commonhold, with commonhold being opened up to a wider variety of consumers by permitting certain arrangements (which are currently prohibited) such as shared ownership and home purchase plans.

Increasing flexibility and safeguard for unit owners

To promote democratic decision making within a commonhold and create greater satisfaction and safeguards for commonhold owners, the government proposes to:

• increase the threshold for changing a local rule (the parts of a CCS relating to a specific development) from 50% to 75%;
• prohibit "event fees" (for example on resale or subletting) except where a commonhold is a dedicated retirement development;
• set a clear process for appointing directors, including what to do if no-one comes forward to volunteer;
• make public liability insurance compulsory for commonhold developments;
• require commonhold associations to set up and maintain a reserve fund to mitigate large or surprise costs; and
• put unit owner participation, cost transparency and fairness at the forefront of making budgeting and financial decisions.

Fixing things when they go wrong

To alleviate the issues when faced with emergencies (for example where funds are required quickly) and/or disputes, the government will introduce the following measures:

the ability for commonhold associations to obtain a loan secured against either the common parts or future commonhold contributions, with the ability to sell parts of the buildings / estate as a last resort;

promotion of mediation and out of court processes being used to resolve disagreements, with cases going through the court system being handled by the Tribunal;

enhanced powers to commonhold associations to recover debt when unit holders do not pay their share, for example the ability to apply to court for an expedited order to sell a unit (subject to safeguards to protect unit owners);

• improvement of the process for winding up a commonhold; and
• allowing unit owners in the minority on a vote to challenge certain important decisions at the Tribunal.

What issues remain outstanding?

The White Paper outlines a number of factors on which the government is still seeking resolution including:

• an easier way to convert existing leaseholds to commonhold - this would entail putting in place some or all of the Law Commission's 17 recommendations in this regard;
• disapplication of some commonhold requirements considered too onerous for "micro-commonholds" (those made up of only 2 or 3 units with only a few shared parts); and
• banning the sale of new leasehold flats - the government will not put this into place until it is confident that commonhold, in its revised form, is a viable alternative.

Comment

Whilst the shift from leasehold to default commonhold seems like a daunting prospect for most stakeholders, the White Paper does appreciate that the project is a massive one, and the model will evolve through consultation and consumer / industry input.

For commonhold to take off at scale the government accepts that it needs to instil confidence in consumers (to buy), developers (to invest) and lenders (to lend), and it believes the new framework will achieve that. However, whilst the clear intention is there, and there are undoubtedly some potential benefits for each of these groups, there is still a distinct lack of clarity around how and when these reforms will be implemented, both in statute and practically.

The next step will be the publishing of the draft bill in the second half of 2025, which will hopefully go some way to providing this clarity. It will be interesting to see whether the reforms will be implemented through changes to the existing regime (for which, as mentioned, there has been a complete lack of uptake). If so, this may very well add to the complexities of the existing system and consequently be a deterrent to commonhold, rather than an incentive.

In addition, with no clarity on the mechanisms for converting leasehold to commonhold, and suggestions of non-consenting leaseholders retaining their leasehold interests, it seems likely that we will be living with a mixed commonhold / leasehold system for many years to come….and how the Tribunal will deal with these conflicting systems will be another interesting conundrum to contend with.

Key takeaways from MIPIM 2025: Future-proofing data centres

As the digital infrastructure landscape continues to evolve, increasing AI workloads present both challenges and opportunities for data centre investments. The MIPIM 2025 panel discussion, Future-Proofing Data Centre Investments, delved into strategies that ensure the viability, flexibility, and scalability of data centres in this dynamic landscape.

The evolution of AI has necessitated a re-evaluation of data centre design and operations to accommodate the increasing complexity and scale of processing power. Understanding customers' evolving requirements is crucial for future-proofing investments and ensuring that data centre operators can meet the demands of tomorrow's digital economy.

What do you need to know?

The digital infrastructure asset class remains highly attractive to investors due to several factors:

• Stable cashflows from strong covenants with long lease terms provide stability and predictability, making data centres a compelling investment option.
• Strong rental growth over the past few years with increased demand for digital services further enhance the appeal of data centre investments.

Traditional availability zones in FLAP-D (Frankfurt, London, Amsterdam, Paris, and Dublin) are facing power and land constraints, which has prompted investors to explore Tier 2 markets. These markets often offer shorter power delivery timelines, with European markets such as Milan, Manchester and Berlin showing significant growth.

Selecting the ideal site for a data centre is a multifaceted process that involves several critical factors:

• Power availability is paramount, with a preference for renewable energy sources to ensure sustainability and cost-effectiveness.
• The location within an availability zone and the pricing of the land also play a significant role, as does the robustness of the surrounding fibre and grid infrastructure.
• Favourable planning and permitting conditions are essential to streamline the development process and mitigate potential delays.
• Latency is also an important factor, which will be dictated by the use case for the compute.

Addressing power availability issues is critical for the success of data centre investments. Solutions range from behind-the-meter setups, which allow data centres to generate their own power, to exploring nuclear options for a longer-term energy supply. Ensuring a reliable and sustainable power source is essential for maintaining operational efficiency and meeting the growing demands of the digital economy.

Engaging with local communities is also a vital aspect of data centre development. Building strong relationships with regional stakeholders helps ensure that data centre projects align with local needs and expectations. This engagement can also facilitate smoother planning and permitting processes, as well as foster support from the community.

Summary

As technology continues to advance, data centres must remain agile and adaptable. Flexible designs that allow for seamless expansion are crucial for accommodating the growing demands for data processing and storage. The panellists felt that liquid to chip will become the dominant cooling preference in the coming months and years. Scalability lies at the core of data centre design, enabling operators to respond quickly to changes in technology and market conditions.

As we look ahead, the data centre investment landscape will continue to be strongly shaped by market dynamics, technological advancements, and evolving regulatory frameworks. Investors must stay agile and informed to navigate this complex and rapidly changing environment.

The Planning and Infrastructure Bill: A silver bullet

After much anticipation, the UK government has tabled the long-awaited Planning and Infrastructure Bill, a wide-ranging legislative proposal aimed at speeding up the development of new homes (following years of undersupply of housing) and infrastructure projects across England and Wales, with some provisions also affecting Scotland. The bill, presented to Parliament this month, has been described by ministers as a transformative reform designed to remove barriers to development and stimulate much-needed economic growth. Will bold intentions to grant 150 Development Consent Orders (DCO) this parliament materialise? What are the key features? And does it really live up to the hype?

Reforms to Nationally Significant Infrastructure Projects (NSIPs)

A major focus of the bill is improving the DCO process for NSIPs which include large-scale developments such as wind farms, major road and rail projects, water infrastructure, and commercial facilities like gigafactories and data centres. The bill proposes:

• Changes to the capacity threshold for solar and reintroduction for onshore wind developments capping thresholds at 100MW.
• A streamlined consenting regime, reducing bureaucratic hurdles in securing a DCO, the key consent for NSIPs which are distinct from planning permission. With the bulk of consultation is done prior to an application, the bill relieves this burden on developers and simplifies these requirements as follows:
  • Only a summary of changes in response to consultation would be required.
  • The Government will be issuing guidance for consultees as to how they are to engage with consultation.
  • Those impacted by applications will only need to be notified and will not be consulted ahead of any application but rather during the application process.

• An option to apply to opt-out of the Planning Act 2008 scheme using alternative consenting schemes (like the Town and Country Planning Act regime) regardless of whether the proposed project is over the thresholds (being the reverse of the current opt-in scheme for projects under the threshold).
• Mandatory review and updates to National Policy Statements (NPSs) every five years to ensure planning policies remain relevant, and ad hoc updates as and when required in response to a particular change in circumstances. Currently, these statements are updated infrequently and have failed to keep pace with fast changing nature of the infrastructure projects required by the private sector (e.g., data centres), and to stimulate growth. Details as to the resourcing is yet to be provided and time will tell as to what circumstances qualify to require ad hoc updates and what level of scrutiny will be given.
• Restrictions on judicial reviews (and removal of the permission on papers stage) to limit delays caused by legal challenges against NPSs and NSIP decisions – whilst this is welcomed by the sector, it is generally acknowledged that this will have little impact on the appetite of those currently seeking judicial review, typically, on the grounds of failing to comply with applicable environmental standards and that the delays to projects could persist for many years. If an appeal is found to be totally without merit the right to appeal will be lost, whilst this sounds impactful the effect on the ground will likely be limited.

Broader Planning Reforms

Beyond NSIPs and DCOs, the bill introduces a new strategic planning system, aimed at ensuring local authorities work together more effectively to meet the infrastructure needs of their administrative boroughs. Additional measures include the following:

• Changes to environmental impact assessments, replacing traditional environmental statements with environmental outcome reports to simplify compliance.
• A "nature recovery fund" and nature restoration levy, which will help developers meet environmental obligations while supporting biodiversity conservation and environmental delivery plans. A model likely to resemble CIL, paying the levy will not go towards meeting biodiversity net gain requirements and will be an additional environmental requirement.
• New environmental development plans are expected, which will suggest planning conditions to be included by local planning authorities on grants of permission.
• A triage system for planning applications, where applications will be referred either to planning officers or committees based on their complexity. More applications are expected to be determined by officers with professional planning qualifications rather than by committee members.

Housing development and urban expansion

A key element of the bill is its push for housing development, particularly through:

• Compulsory purchase reforms, making it easier for local authorities to acquire land for housing.
• Strengthening the role of development corporations, giving them greater powers to deliver infrastructure and transport projects.
• Allowing development on "grey belt" land, a lower-quality section of the green belt, to prioritise housing while still protecting more valuable green spaces.

These changes build upon recent updates to the National Planning Policy Framework, which promotes a "brownfield first" approach while recognising that some greenfield development will still be necessary.

Planning Reforms in Scotland

The bill also includes provisions for reforming planning rules for electricity infrastructure in Scotland, aiming to reduce approval times for major energy projects. Currently, it can take up to four years for large-scale onshore and offshore electricity projects to secure consent. Some of the proposed measures include:

• Removing automatic triggers for public inquiries, which can delay projects unnecessarily.
• Aligning pre-application consultation processes with existing Scottish planning rules, reducing red tape.
• Expanding the two-stage challenge process for offshore projects to onshore developments, ensuring consistency in how legal challenges are handled.

However, Scottish planning experts have already criticised the bill for failing to introduce binding statutory deadlines for project approvals—something that exists in England’s DCO system. While the Scottish government will have the power to introduce such deadlines in the future, arguably clear timeframes are needed now to prevent further delays.

Comment 

The Planning and Infrastructure Bill represents a major step in the UK government’s efforts to speed up infrastructure and housing development. While the proposed reforms - particularly to NSIPs, environmental assessments, and local planning policies - are largely positive these are unlikely to have a meaningful impact on reducing the time it takes to obtain the necessary consents to get these critical and complex projects off the ground. Even with streamlined processes, delays could persist if planning departments remain underfunded and understaffed. As ever, the proof will be in the pudding and the success of the bill will depend on how effectively it is implemented and whether additional reforms are introduced to address its remaining weaknesses.