2025 will be a time of great change for landlords, and the PRS as a whole.

Here’s a summarised breakdown of the key points landlords should focus on for 2025:

1. Renters’ Rights Bill Progress

  • Major Changes: Scrapping Section 21 evictions and ending fixed-term tenancies.
  • Current Status: At the report stage in the House of Commons, likely to pass into law by late 2025.
  • Action Points for Landlords:
    • Familiarise yourself with the proposed eviction process.
    • Update tenancy agreements to remove rent review clauses.

2. Energy Efficiency Rules

  • Proposed Change: Raise minimum EPC ratings from E to C by 2030.
  • Likely Developments in 2025:
    • Potential government consultation on exemptions, cost caps, and timelines.
  • Financial Implications:
    • Improvements could cost £1,000–£10,000+ per property.
    • Common upgrades: draft proofing, loft insulation, and glazing.

3. Stamp Duty Changes

  • From April 2025:
    • Landlords’ surcharge rises from 3% to 5%.
    • Threshold reduction: £125,000 (down from £250,000).
  • Effect on Costs: Stamp duty for a £240,000 property increases from £12,000 to £14,300.
  • Market Impact:
    • Rush of transactions before April, likely slowdown afterward.

4. Property Values

  • Outlook:
    • Average prices expected to rise by 4% by the end of 2025.
    • Over 1 million transactions projected, driven by lower mortgage rates.
  • Buy-to-Let Investment:
    • 11% of landlords plan to purchase before August 2025.
    • Strong yields continue to make buy-to-let appealing.

5. Rental Demand and Prices

  • High Demand: Average rents expected to remain elevated.
  • Growth Trends: Moderate increases due to affordability pressures in major cities.
  • Wage vs. Rent: Wages outpacing rent growth as of late 2024.

Other Key Considerations for 2025

  • Making Tax Digital: Compliance required by April 2026 for property incomes over £50,000.
  • Short-Term Lets Regulation: Stricter rules for holiday homes expected.
  • Furnished Holiday Lets: Tax benefits ending in April 2025.
  • Landlord Licensing: More selective schemes anticipated.
  • Rising Tax Costs:
    • Frozen income tax thresholds.
    • Section 24 changes affecting HMRC bills.

Preparation Tip: Stay updated on consultations and legislative changes, and plan property upgrades and financial adjustments to mitigate potential impacts.