Changes for landlords: what to expect in 2025

If you are a buy-to-let landlord, you’ll know that the market has seen some dramatic changes in recent years. From 2017, relief on mortgage interest and other finance costs began to be phased out. In 2016, a Stamp Duty Land Tax surcharge made it more expensive for landlords to buy properties. Some landlords have had to comply with new local licensing schemes. There have also been moves to increase the energy efficiency of rental properties, along with legislation giving tenants more robust rights. And still the changes keep coming. In this post, we look at the changes for landlords that you’re likely to see in 2025.

The Renters’ Rights Bill

The biggest changes for landlords will be as a direct result of the upcoming Renters’ Rights Bill.

The new bill will introduce a raft of major reforms. Many of these were contained in the last government’s Renters (Reform) Bill, but failed to become law before the 2024 general election.

We’ve written in detail about the proposals in the Renters’ Rights Bill, but important changes for landlords include:

• The end of ‘no fault’ evictions. Section 21 evictions will be abolished. If you want to remove a tenant, you’ll need to rely on a Section 8 ground for possession.
• No more fixed-term assured tenancies. Tenancies will become periodic and tenants will be able to stay until they decide to give two months’ notice.
• An end to rental discrimination. You won’t be able refuse to let a property because (for example) a potential tenant is on benefits or has children.
• New rules on rent increases. You’ll only be able to raise the rent once per year, and then only to the market rate.
• A ban on rental bidding. You’ll need to publish an asking rent and it will be against the law to accept more.
• The introduction of ‘Awaab’s Law’. This already applies to public sector housing and is now being rolled out to private rentals. It sets clear timeframes for making homes safe when they contain serious hazards.

The Renters’ Rights Bill is expected to come into force during the summer of 2025.

Stamp Duty Land Tax increases

This is another of the significant changes landlords face. Although it came into force on 30th October 2024, this will really bite in 2025.

In a nutshell, landlords already had to pay a 3% SDLT surcharge when they bought a buy-to-let property. They now have to pay 5% over the odds.

SDLT rates are themselves changing from 1st April 2025. If you bought a home as your main residential property before then, you’d pay:

• 0% on the first £250,000
• 5% on the next £675,000
• 10% on the next £575,000
• 12% on anything above that

From 1st April 2025, the rates change to:

• 0% on the first £125,000
• 2% on the next £125,000
• 5% on the next £675,000
• 10% on the next £575,000
• 12% on anything above that

If you buy the property as a second home or rental property, you have to add 5% to all of those rates. This means the SDLT on a £300,000 property would have been £11,500 before 30th October 2024. It will now be £17,500 until April 2025. From them it will be a hefty £20,000.

Energy efficiency rules

Among the other important changes for landlords are proposed energy efficiency rules.

As we blogged recently, the Labour government has confirmed that all rental properties in England will need an EPC rating of ‘C’ or above by 2030. Currently you need a minimum rating of ‘E’.

While this change won’t come into force in 2025, some landlords will need to start upgrading their properties. This is particularly the case for those who own older, less energy efficient properties. Indeed, if you own older rental properties, this may be the year in which you decide whether it’s best to upgrade them or sell them on. Some landlords are seeing value in selling less energy efficient properties and then investing the money in more modern homes.

Licensing changes

The last of the changes for landlords we’re going to cover concerns licensing schemes. Since 23rd December 2024, local authorities haven’t had to get Secretary of State approval to introduce local schemes.

Beforehand, if a scheme applied to more than 20% of private rental housing within the local authority, it had to be approved by central government. As this is no longer the case, it’s likely that councils will introduce many more schemes. As a result, more landlords will have to register, increasing their costs and the amount of red tape they have to deal with.

Changes for landlords – what next?

The changes for landlords we’ve covered will have a major impact on the private rental sector. If you’re a landlord, 2025 is a year for taking stock. You may want to revisit your portfolio and, if you plan to buy more properties, do so before the SDLT rises in April. Similarly, you may want to sell off older, less energy efficient properties.

If you’d like extra help and advice, remember that THP is the accountants for landlords. Our friendly, expert team can help you with everything from tax planning to advice on whether you should set up a limited company. In addition, our Landlords’ Platinum Accounting Service offers you a wide range of tailored benefits, from priority access to CGT services to free MTD compliant landlord software. Get in touch today to learn more.