The UK’s Property (Digital Assets etc) Act 2025 marks a shift in law by giving statutory recognition to certain digital assets (including tokens such as NFTs) as property. Even though they do not fit the orthodox categories of “things in possession” or “things in action”, they are now legally capable of being owned, transferred, charged and recovered as real property. This strengthens the legal plumbing behind tokenised real-estate structures that already exist off the register, and it improves the predictability of outcomes in security, enforcement, tracing and insolvency.

No – the Act doesn’t convert HM Land Registry into a blockchain nor does it replace the register as the authoritative record for estates and interests in land. Instead, it supplies a clear, property-law footing for the tokens many transactions already use to package and move rights associated with real estate. That clarity reduces friction at the touchpoints where digital rails meet conventional property acquisition and disposal.

Property tokenisation typically works through an entity wrapper. Title to the asset sits with a property-owning SPV; the token represents the equity or another defined interest in that vehicle. Transferring the token achieves a transfer of control over the SPV in a way practitioners will find entirely familiar from share deals, only with programmable settlement processes. In other variants, tokens can help evidence fractional equity, specific revenue rights such as rental receivables, or a curated “digital twin” that locks up diligence artefacts, improvement logs and compliance data. The Act does not bless one structure over another; it supplies the foundations that lets each work more cleanly.

Because tokens are now expressly capable of being property, proprietary remedies can apply directly to them. That improves the position for lenders taking security over tokenised SPV interests or tokenised cash flows: control arrangements, perfection and priority can be structured with greater confidence, and enforcement on default is less likely to be derailed by threshold questions about whether the subject matter is property at all. In insolvency, officeholders can more readily treat relevant tokens as property of the estate, seek proprietary injunctions, and pursue tracing through on-chain transfers. In contentious scenarios, the gap narrows between being able to identify “who holds it” on-chain and obtaining effective orders for delivery-up or freezing.

For transactional lawyers, deal architecture should now assume the token is itself a property interest capable of being the subject of obligations and security. That calls for clear drafting that ties off-chain legal rights to on-chain control. Completion mechanics should specify what constitutes “delivery” of the token, which on-chain events are conditions precedent, and how failures or disputes are handled. Governance must cover key-holder arrangements, custody, and recovery processes to avoid single-point key risk undermining control of the SPV or cash-flow rights. Where fractions are issued, the securities and financial-promotion perimeter still applies; the Act clarifies property status, not regulatory permissions. Tax analysis likewise remains structure-dependent: a token transfer may be a separate taxable event, but underlying shares, assets and duties still drive the primary outcomes.

Land registers remain the central hub for estates in land, but recognition of tokens as property improves the coherence of registry-adjacent workflows. For example, where a token functions as a golden record for disclosures, EPCs, surveys and covenants, misappropriation or tampering now engages proprietary protections more directly. Disputes over competing interests in a tokenised stake can be addressed with familiar personal property principles, informed by the advantages of on-chain audit trails. Tracing through token transfers is similarly bolstered where equitable claims attach to identifiable property.

The market has already been using tokens to package, transfer and finance rights connected with land-principally via SPVs – while title itself remains off-chain. The Act removes ambiguity about the proprietary character of the token at the heart of those deals. That unlocks cleaner security, more predictable enforcement and recoveries, and sharper insolvency treatment. It also broadens the tools available for capital formation-fractional equity, tradeable rent streams, and secondary liquidity for sponsors-without disturbing register-based title. In short, the reforms take tokens out of the “just pictures” bucket and into the mainstream of property law where practitioners can apply established doctrines with appropriate refinements.

Expect the SPV-wrapper model to dominate near-term, with completions aligning off-chain share registers and on-chain token transfers. Build custody and control provisions into the core of your governance, not the back of your schedules. Where you fractionalise equity or revenue, run securities analysis and gate your investor base and secondary trading. Map security packages to include charges over tokens plus robust wallet-control covenants, alongside conventional share and account charges. And keep tax, AML/KYC and consumer-protection considerations front and centre: the Act simplifies property status; it does not neutralise other regimes.

The 2025 Act does not make property acquisition blockchain-native. It does something more useful for the next phase of adoption: it supplies clear property-law rails for the tokens increasingly used to package and trade rights tied to real estate. With that foundation in place, real-world property deals on token rails can be structured, secured and enforced with far greater confidence-and that makes them the business of every property investor.

If you have any questions or concerns about this, our Property team can help – please get in touch.