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.