Introduction:
With 2025 in full swing, the property market is already shifting—so how can you stay ahead of the game? In today’s article, we’ll explore some key events and changes that could shape the property market in the months ahead. Whether you’re an investor looking for the next big opportunity or a homeowner keeping an eye on market movements, we’ve got you covered!
The Renters Rights Bill
The Renters’ Rights Bill is a proposed UK law aimed at strengthening tenant protections by abolishing “no-fault” evictions (Section 21), capping advance rent payments, and prohibiting discrimination against renters (e.g. those on benefits or with children). It seeks to create a fairer, more stable rental market while balancing landlord responsibilities.
The bill aims to improve the current system for both the 11 million private renters and 2.3 million landlords in England. It intends to give renters greater security and stability so they can stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness.
The bill was introduced to Parliament on September 11, 2024, and has since passed its second reading in the House of Commons. It is currently undergoing further scrutiny in the committee stage. The government aims for the bill to receive Royal Assent by Spring 2025, with the new rental rules expected to be in place by Summer 2025.
What are the proposed changes
The Labour government’s renewed proposal seeks to introduce several protections for renters, including:
- A ban on ‘no-fault’ section 21 evictions: Eliminating Section 21 evictions, preventing landlords from evicting tenants without a valid reason.
- Cap on Advance Rent Payments: Capping advance rent payments at one month’s rent to prevent landlords from demanding multiple months’ rent upfront.
- Scrapping fixed-term tenancies and replacing these with periodic tenancies, which tenants can end with two months’ notice
- Making it illegal for landlords and agents to discriminate against prospective tenants in receipt of benefits or with children
- An end to bidding wars by no longer allowing offers above the listed price to be asked for, encouraged, or accepted
- A new Decent Homes Standard (DHS) for the private rented sector
- Applying Awaab’s Law to the private rented sector, requiring landlords to address hazards, such as damp and mould, within a specified time period
- A new Private Rented Sector Landlord Ombudsman for landlords and tenants in England
- A private rented sector database that all landlords must register themselves and their properties on
Landlord bodies initially opposed the abolition of section 21, contending it would prompt landlords to leave the sector. Both the National Residential Landlords Association (NRLA) and the Large Agents Representation Group have emphasised the tenancy reforms represent “the biggest change to the sector for over 30 years” and the sector must be given sufficient time to prepare for the changes. Landlords have also called for court reforms to improve the speed and efficiency with which possession claims are processed.
The UK Government are aware that millions of people in England live in constant fear that they and their families could be uprooted from their home with little notice and minimal justification, and a significant minority of them are forced to live in substandard properties for fear that a complaint would lead to an instant retaliatory eviction.
Potential benefits to landlords
While the Renters’ Rights Bill is primarily designed to strengthen tenant protections, there are some potential benefits for landlords, including:
More Reliable Rental Income
Since the bill discourages sudden evictions and supports fairer tenancy agreements, landlords could benefit from steady, long-term rental income without frequent tenant turnover.
Reduction in Disputes
Clearer legal guidelines around evictions and tenant rights may reduce legal disputes, making property management smoother and lowering legal costs.
Better Tenant Quality
Stricter regulations on fair treatment could lead to a more responsible tenant pool, as renters who feel protected may take better care of properties.
Potential for Higher Rents in a More Stable Market
If the bill increases tenant demand for secure, long-term rentals, landlords may find it easier to charge fair market rents without frequent negotiation or uncertainty.
While some landlords worry about increased regulation, those who already follow best practices may experience a more predictable and professional rental market.
Support and Criticism
The bill has garnered both support and criticism. Advocates argue it will enhance tenant protections and create a fairer rental market. Critics, including some landlord associations, express concerns that certain provisions may have unintended consequences, such as making it more difficult for tenants with irregular incomes to secure housing.
As the bill moves through the legislative process, further debates and potential amendments are anticipated. If enacted, the Renters’ Rights Bill is expected to significantly impact the UK’s rental market by strengthening tenant rights and altering landlord obligations.
EPC Changes Scrapped
The government had previously proposed that all rental properties will need an EPC rating of ‘C’ or above from 2025. Similar to the previous changes, the new regulations was to be introduced for new tenancies first, followed by all tenancies from 2028.
However, former Prime Minister Rishi Sunak publicly ditched these deadlines in favour of a more “pragmatic approach” to climate change – a move welcomed by already struggling landlords.
Rental properties have long been subject to EPC requirements, but the Minimum Energy Efficiency Standards (MEES) were officially introduced in 2018.
The rules state that rented properties should have a rating of at least E. This is the minimum EPC for renting. Landlords renting out a property with a rating below this (i.e. F or G) must have an exemption certificate or risk breaking the law. This rule applies to existing tenancies and new ones.
So whilst EPC changes are likely inevitable for the future, landlords have this valuable opportunity to adapt and renovate their current properties gradually overtime, with hopes to improve their energy rating without the deadline.
Conclusion
So in conclusion, for our property landlords in 2025, maybe things aren’t so bleak? In many European countries (Germany, France, Sweden, the Netherlands), tenants have strong protections, including long-term rental agreements and restrictions on evictions.
The UK has a relatively high homeownership aspiration, but affordability issues push more people into renting. Whereas in Germany and Switzerland, renting is the norm, with around 50-60% of the population renting. These countries treat renting as a long-term, stable option rather than a stepping stone to buying.
So maybe the UK could see a move towards lifelong renting too. Whilst homes may have more stringent requirements for energy efficiency in future. Landlords could benefit from steady, long-term rental income without frequent tenant turnover.
We look forward to working with our clients and brokers as we move into a brand new year with optimism and loans faster than ever. At BIG Property Finance we are happy to receive enquiries through telephone, email or enquiry form on our website. We aim to provide indicative loan terms within hours and a potential loan offer in a matter of days. We look forward to hearing from you in 2025. Contact us today on 121 348 7830 or at info@bigpropertyfinance.co.uk
