Every homeowner and renter needs to be aware of the new property laws for 2025

There are some big changes coming to the housing sector next year that could impact 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 Labor after it won the general election in a landslide earlier this year. In October this year, Chancellor Rachel Reeves announced some major changes to the property sector as part of Labour’s first Budget.

As well as the announcements on taxes, wages, pensions, benefits and the cost of living, Britain’s first female chancellor also addressed the property market with changes to rent, leasehold, stamp duty and new homes – reports the Manchester Evening News. Here are the new property laws and big changes expected to come into effect in 2025:

Tenants’ Rights Bill

The Tenants’ Rights Act is expected to come into force in 2025 and will bring the biggest changes to tenancy law in decades and enforce rules that protect tenants’ rights.

The bill is an expression of Labour’s manifesto commitment to transforming the private rental experience for both the 11 million private renters and 2.3 million landlords in England. It is intended to give tenants significantly more security and stability so that they can stay in their homes longer and avoid the risk of homelessness.

Elimination of no-fault evictions

The government wants to remove section 21 “no-fault evictions” from the Housing Act 1988, meaning landlords would no longer have the power to ask tenants to leave without a good reason set out in the law.

Under the new legislation, a tenant is protected from termination for the first 12 months of their tenancy unless they break their tenancy agreement. If the landlord subsequently wants to sell or move into the property, he must give the tenant four months’ notice.

Rent increases

The bill will give private tenants the opportunity to challenge unreasonable rent increases. This prevents landlords from using rent increases as a back door to eviction, while ensuring that rents can be increased in line with market rates.

In the future, landlords will only be able to increase the rent once per year to the market price – the price that would be achieved if the property were re-tendered. To do this, they must file a simple Section 13 notice setting out the new rent and giving it at least two months’ notice.

If a tenant believes that the proposed rent increase exceeds the market rate, they can appeal this to the First-tier Tribunal, which will then determine what the market rent should be.

Bidding wars

The Tenants’ Rights Act will put an end to 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 exploiting the housing crisis by forcing tenants to bid for their properties.

The bill would require landlords and agents to publish an asking rent for their property and prohibit them from soliciting, encouraging or accepting bids above that price.

Ask for permission for pets

The Tenants’ Rights Act ensures that landlords do not unreasonably withhold consent if a tenant wants a pet in their apartment, with the tenant having the opportunity to challenge unfair decisions.

The bill would allow landlords to require pet damage insurance, giving them peace of mind that any damage caused by a pet can be taken care of.

Tenancy and Property Reform Act 2024

The government plans to end what it calls a “feudal” leasehold system, which can leave tenants facing unexpected and prohibitive costs imposed by the tenant, such as utilities and ground rent.

There are around five million rental properties in England, most of which are flats or apartments. Tenants only have the right to occupy their property through a lease that lasts for a certain number of years. However, the actual land on which the property sits or the building to which it forms part is owned by a tenant.

According to the government, some fees are needed to fund essential services, such as cleaning common areas in a block of flats. However, the government claims that in recent years “some bad actors have exploited leaseholders by charging excessive, opaque and escalating costs”.

In 2025, numerous rule changes will come into force to better protect tenants. From January, the “two-year rule” will be abolished. The scheme requires leaseholders to wait two years after purchasing their property before they can grant their “right of concession”, which is when leaseholders purchase their property or renew their lease.

Then the government will issue new “Right to Manage” measures in the spring. The new measures mean more homeowners in mixed-use buildings can take over management from their owners – and tenants who make claims will in most cases no longer have to cover their owners’ costs.

The government has announced that it will then present its new leasehold and shared ownership reform bill in the second half of 2025, setting out its plans to move from the leasehold system to a shared ownership system that is “more modern” and “fitter.” “will be fit for purpose,” said the government.

In a condominium system, all flats and apartments would be individual condominiums, while common areas would be managed by a condominium association, whose owners would be the owners of the apartments.

Property tax with stamp duty

New rules due to come into force in the property sector in 2025 include changes to stamp duty – one of the upfront costs buyers pay when purchasing a property.

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

Meanwhile, first-time buyers will continue to be exempt from paying 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 per cent up to the value of £625,000.

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