By Laura Wood, Client Advisor at Legal Futures Associate LexisNexis Enterprise Solutions
The UK property market is poised for significant changes in 2025, with new legislation and reforms set to reshape the landscape for landlords, tenants, homeowners, estate agents, and conveyancers alike. From the Renters’ Rights Bill to stamp duty modifications, these changes will have far-reaching implications for all stakeholders in the property sector.
The Renters’ Rights Bill: new tenant rights
February 2025 marks a pivotal moment as the Renters’ Bill is now under review in the House of Lords. This legislation introduces substantial changes to the rental market, intending to give renters more stability and security, addressing the imbalance of rights between landlords and tenants. Most notable is the replacement of Assured Shorthold Tenancies (ASTs), with periodic assured tenancies now featuring a three-month eviction notice. The controversial ‘no-fault’ evictions under Section 21 are being phased out, while Section 8 evictions will remain; albeit slightly modified to consider scenarios such as the sale of a property and serious rent arrears.
A significant addition is the introduction of the Private Rented Sector Landlord Ombudsman, providing a new avenue for dispute resolution. Landlords must also adhere to stricter rent increase procedures, only being able to increase rent once a year at the market rate; the rate at which the property could be rented if newly advertised. Rent increases require the use of Section 13 notices with at least two months’ notice of the increase taking place, adding another layer of complication and formality to the process.
The Leasehold and Freehold Reform Act 2024: empowering homeowners
The Leasehold and Freehold Reform Act 2024 brings welcome change for leaseholders. The two-year waiting period for lease extensions or freehold purchases has been eliminated, streamlining the process for homeowners. Mixed-use building residents gain rights to manage their properties, taking over control from freeholders. Perhaps most significantly, the government continues its push in 2025 toward commonhold ownership as the default by 2030, gradually phasing out new leasehold properties. The introduction of commonhold would avoid the shortcomings of leasehold by allowing people to own the freehold of their individual flat or house, thus negating the need for costly lease extensions. The rest of the building or estate being able to be managed by forming a commonhold association who would own the common parts.
Stamp Duty Land Tax: an overhaul
April 2025 introduces substantial changes to Stamp Duty Land Tax (SDLT). The nil rate band reduction from £250,000 to £125,000 means buyers will face a £2,500 SDLT bill on a £250,000 property – a significant increase from the previous zero rate. First-time buyers face reduced relief thresholds, now capped at £300,000 down from £425,000 and they will have to pay 5% on properties priced between £300,001 to £500,000. This means they go from paying nothing to paying £6,250 as stamp duty. There have been no proposed changes to the higher rate of SDLT of 5% on top of standard SDLT rates for additional properties and the eligibility criteria for a refund still apply.
The market implications of legislative changes
These legislative changes are expected to trigger various market responses. A surge in property transactions under £250,000 is anticipated after April 2025 for those who want to avoid paying SDLT, but between now and then as buyers rush to beat the SDLT changes, we can expect to see a surge in people desperately trying to complete their purchase before the cut off. The rental sector faces potential upheaval as private landlords reassess their positions in light of increased tenant rights and administrative burdens.
The buy-to-let market appears particularly challenged, with landlords facing multiple pressures. Many are now offering shorter six-month tenancies while simultaneously marketing properties for sale, a trend that emerged in 2024 and shows no signs of abating. The prohibition of rental bidding wars, requiring fixed-price advertisements, adds another layer of market control.
The full impact of all these changes is of course unknown at this point. Is the potential reduction in rental properties going to drive up rent prices, making renting a property unattainable? While still under consultation, by 2030 it is very likely that the minimum Energy Performance Certificate (EPC) standard will increase to a C. This again raises questions about further rent increases and/or cost allocation between landlords and tenants, including how to deal with properties that aren’t exempt but will be near impossible to improve EPC ratings, e.g. a flat in a Victorian building in a conservation area.
The commercial property sector isn’t immune to change either, with proposals to reform the security of tenure rights for business tenants. Options range from complete abolishment to mandatory security, maintaining the current system, or introducing an opt-in mechanism.
Looking ahead
There can be little doubt that the cumulative effect of these changes will reshape the UK property landscape significantly. While there may be consideration and logic behind these reforms, there are considerable concerns about unintended consequences, for example the potential reduction in rental property availability, coupled with rising rents, might exacerbate the housing crisis rather than alleviate it.
The reintroduction of 95% mortgages by some lenders offers a glimmer of hope for first-time buyers, but this must be balanced against the reduced SDLT relief and broader market pressures. As these various reforms take effect, 2025 will be a year of significant adjustment for all property market participants. From conveyancers’ standpoint, the year requires careful navigation of new regulations while maintaining business viability.
The role of technology
Conveyancers require flexibility and agility to quickly adapt to continuously changing property laws, regulations, and dynamic market conditions to maintain and strengthen the business’ bottom line and future growth opportunities. So naturally, technology has a vital role to play. For instance, a flexible case management platform provides the ability to independently modify workflows, forms, and conveyancing processes, eliminating dependence on external updates. As the market potentially shifts towards lower-priced properties, technology enables conveyancers to operate more efficiently and cost-effectively. Through automation and enhanced workflows, case management software helps reduce time and expense. Additionally, the technology’s scalability – both vertically and horizontally – proves valuable when transitioning to and accommodating concepts like commonhold.
Having technology that helps the conveyancing practice to swiftly adapt to market changes is crucial for conveyancers to effectively navigate the evolving property landscape and maintain a competitive advantage in the industry. Implement the right case management system once, and the firm awards itself flexibility, agility, scalability, and adaptability for the foreseeable future.