THE BOTTOM LINE
- Key Date Set: New rules for valuing telecommunications site leases will take effect on 7th April 2026. This affects landlords and operators involved in lease renewals in England, Wales, and Northern Ireland.
- Lower Rents Expected for Operators: When renewing leases, courts will calculate rent based on the land’s value for other potential uses, ignoring its specific value as a telecoms site. This is expected to significantly reduce rental costs for operators.
- New Compensation Rights for Landlords: To balance the lower rents, landlords will gain new rights to claim compensation from operators for specific losses or damages caused by the tenancy.
THE DETAILS
The UK government has confirmed the activation date for key sections of the Product Security and Telecommunications Infrastructure (PSTI) Act 2022. As of 7th April 2026, sections 61 to 64 will come into force, fundamentally changing the way rent is calculated for renewed leases that grant rights under the Electronic Communications Code (“code rights“).
The change introduces a “no-network assumption” into the valuation process. This means that when a court determines the rent for a new tenancy, it must assume the land is not being used for an electronic communications network. The valuation will instead be based on what the landowner could have earned from alternative uses, which will likely result in lower rents for telecoms operators and reduced rental income for landowners.
This shift is intended to facilitate the rollout of national telecoms infrastructure by lowering site acquisition costs for operators. However, the Act also introduces a counterbalance for property owners. New provisions will allow landlords to apply to the court for compensation from the operator for loss or damage suffered as a direct result of the new tenancy being granted. This creates a new avenue for landlords to recover specific financial losses, providing a partial offset to the anticipated reduction in rental income and ensuring a fairer balance between promoting connectivity and protecting property rights.
Critically, the regulations establish clear transitional rules that make the timing of lease renewals paramount. For any lease renewal process initiated via a section 25 or 26 notice in England and Wales where the proposed end or start date is before 7th April 2026, the old valuation rules will still apply. Any renewal process that straddles this key date will be subject to the new regime. This creates a crucial strategic window for both landlords and operators. Parties with upcoming lease events must now carefully consider the timing of their notices to either secure the benefits of the new rules or remain under the existing framework.
SOURCE
Source: King’s Printer of Acts of Parliament
