Every Landlord and Tenant Needs to Know the New Property Laws for 2025

Major changes are coming to the housing industry next year that could affect you.

These new laws and rules will affect millions of homeowners and renters across the country, so it’s important to familiarize yourself with them.

The laws are being brought into force by the Labor Party, after winning the general election with a landslide earlier this year. In October this year, Chancellor Rachel Reeves announced major changes to the property sector in the first Labor budget.

Among announcements on taxes, wages, pensions, benefits and the cost of living, the UK’s first female chancellor addressed the property market with changes to rentals, leases, fees stamps and new houses, reports the Manchester Evening News. Here are the new property laws and major changes expected to take effect in 2025:

Tenants’ Rights Bill

The Tenants’ Rights Bill is expected to come into force in 2025 and will bring about the most significant changes to rental laws in decades, implementing rules that protect tenants’ rights.

The Bill delivers on Labour’s manifesto commitment to transforming the private renting experience for England’s 11 million private renters and 2.3 million homeowners. It should provide tenants with much greater security and stability so they can stay in their homes longer and avoid the risk of homelessness.

Abolish no-fault evictions

The government wants to scrap “no-fault” evictions under section 21 of the Housing Act 1988, meaning landlords will no longer have the power to ask tenants to leave without a valid reason, defined by the law.

Under the new legislation, a tenant will be protected from eviction for the first 12 months of their tenancy, provided they do not break their tenancy agreement. After that, if the landlord wants to sell or move into the property, they will need to give the tenant four months’ notice.

Rent increases

The bill will allow tenants in the private rental sector to challenge unreasonable rent increases. This will prevent landlords from using rent increases as a backdoor means of eviction, while ensuring that rents can be increased to reflect market rates.

Going forward, landlords will only be able to increase rents once a year to the market rate – the price that would be achieved if the property was newly advertised for rental. To do this, they will have to serve a simple “article 13” notice, setting the new rent and giving at least 2 months’ notice for it to take effect.

If a tenant believes that the proposed rent increase exceeds the market rate, then they can challenge this decision in the Magistrates’ Court, which will determine what the market rent should be.

Bidding Wars

The Tenants Rights Bill will end the unfair practice of pitting tenants against each other in bidding wars. Labor wants to “level the playing field” for renters and crack down on landlords who are making the most of the housing crisis by forcing tenants to bid for their properties.

The bill will require landlords and letting agents to publish an asking rent for their property, and it will prohibit them from asking for, encouraging or accepting offers above that price.

Request consent for animals

The Tenants’ Rights Bill will ensure landlords do not unreasonably withhold consent when a tenant requests to have a pet in their accommodation, with the tenant able to challenge unfair decisions.

The bill will allow owners to require insurance to cover pet damage, giving them confidence that any damage caused by a pet can be covered.

Leasehold and Freehold Reform Act 2024

The government is considering ending what it describes as the “feudal” tenancy system, which can see tenants hit with unexpected and unaffordable costs imposed on them by the landowner, for example service charges and land rent.

There are around five million leasehold properties in England, the majority of which are flats or flats. Leaseholders only have the right to occupy their property by way of a lease for a certain number of years, but the land on which the property is located, or the building on which it is part of, belongs to a landowner.

According to the government, certain charges are necessary to finance essential services, such as cleaning the common areas of a building. However, the government claims that in recent years, “some bad actors have taken advantage of tenants, charging excessive, opaque and escalating costs.”

A number of rule changes will come into effect in 2025 to better protect tenants. From January, the “two-year rule” will be removed. The rule requires tenants to wait two years after purchasing their property before they can “franchise”, which is when tenants purchase their freehold or extend their lease.

Then, in the spring, the government will promulgate new measures relating to the “right to management”. The new measures will mean more mixed-use property owners can take over management from their landowners – and tenants making claims will no longer have to pay their landowners’ fees in most case.

The government has announced that it will then introduce its new Leasehold and Shared Ownership Reform Bill in the second half of 2025, which will outline its plans to transition from the leasehold system to a shared ownership system, which will be “more modern” and “adapted”. -on purpose,” according to the government.

In a strata system, the apartments would all be individually owned freehold, while the common areas would be managed by a strata association, owned by the property owners of the apartments.

Stamp duty, property tax

Among the new rules set to come into force in the property sector in 2025 are changes to stamp duty – one of the upfront costs buyers pay when purchasing a property.

During the Autumn Budget, the Chancellor revealed an increase in stamp duty for second home buyers and landlords, with the rate of additional stamp duty rising from 3% to 5% from October 31 for homes with the purchase price is between £40,000 and £250,000.

Meanwhile, first-time buyers will continue to be exempt from stamp duty on properties priced up to £425,000 until March 31, 2025. For properties priced above this amount, you will pay stamp duty of 5% up to the value of £. 625,000.

From April 1, 2025, the stamp duty threshold will be reduced to £300,000 for first-time buyers. This means anyone buying their first home from this date will have to pay 5% stamp duty on properties priced between £300,001 and £500,000. If the price of the house you buy exceeds £500,000, you are not eligible for the tax relief.