The new property laws and changes coming into force in 2025 that every homeowner and renter must know

With the new year soon underway, there are set to be some key legislative changes being made to the property sector. These new laws and rules set will affect millions of homeowners and renters across the country, so it’s important to familiarise yourself with them.

The laws are being put into force by the Labour party, after winning the general election with a landslide victory earlier this year. In October this year, Chancellor Rachel Reeves announced some major changes to the property sector during Labour’s first Budget.

Amongst the announcements on taxes, wages, pensions, benefits and the cost of living, the UK’s first female Chancellor addressed the property market with changes to renting, leasehold, stamp duty and new homes.

READ MORE: Tributes to five people in Greater Manchester who have died

READ MORE: “It’s time things are done differently”: Chancellor makes major private schools announcement

Here are the new property laws and major changes that are expected to come into play in 2025:

Renters’ Rights Bill

The Renters’ Rights Bill is expected to come into effect during 2025 and will bring about the biggest changes to tenancy laws in decades, enforcing rules which protect the rights of renters.

The bill delivers Labour’s manifesto commitment to transform the experience of private renting for both the 11 million private renters and 2.3 million landlords in England. It is set to give renters much greater security and stability so they can stay in their homes for longer and avoid the risk of homelessness.

Here are some of the main changes set to come into force:

Abolish no fault evictions

The government wants to remove Section 21 ‘no fault’ evictions from the Housing Act 1988, which will mean that that landlords would no longer have the power to ask tenants to leave without a valid reason, defined in law.

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

Rent increases

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

Going forward, landlords will only be able to increase rents once per year to the market rate – the price that would be achieved if the property was newly advertised to let. To do this, they will need to serve a simple ‘section 13’ notice, setting out the new rent and giving at least 2 months’ notice of it taking effect.

If a tenant believes the proposed rent increase exceeds market rate, they can then challenge this at the First-tier Tribunal, who will determine what the market rent should be.

Bidding wars

The Renters’ Rights Bill will end the unfair practice of pitting renters against each other in bidding wars. Labour wants to ‘level the playing field’ for renters and crack down on landlords who make 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 them prohibit them from asking for, encouraging, or accepting any bids above this price.

Request consent for pets

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

The bill will allow landlords to require insurance covering pet damage, which will provide them with reassurance that any damage caused by a pet can be taken care of.

Leasehold and Freehold Reform Act 2024

The government plans to end what it describes as the “feudal” leasehold system, which can see leaseholders hit with unexpected and unaffordable costs imposed on them by the freeholder, for example service charges and ground rent.

There are around five million leasehold properties in England, the majority of which are flats or apartments. Leaseholders only own the right to occupy their property through a lease that lasts a certain number of years, but the actual land the property sits on, or the building it is part of, is owned by a freeholder.

According to the government, some charges are necessary to fund key services, such as cleaning communal areas in a block of flats. However, the government claims that in recent years “some bad actors have taken advantage of leaseholders, charging excessive, opaque and escalating costs”.

A number of rule changes will come into effect in 2025 to better protect leaseholders. From January, the ‘two-year rule’ will be removed. The rule requires leaseholders to wait two years from purchasing their property before they can ‘enfranchise’, which is when leaseholders buy their freehold or extend their lease.

Then, in spring, the government will enact new ‘Right to Manage’ measures. The new measures will mean that more homeowners in mixed-use buildings can take over management from their freeholders – and leaseholders making claims will no longer have to pay their freeholder’s costs in most cases.

The government has said it will then introduce its new draft Leasehold and Commonhold Reform Bill in the second half of 2025, which will outline its plans to transition away from the leasehold system to a commonhold system, which will be “more modern” and “fit-for-purpose”, according to the government.

In a commonhold system, flats and apartments would all be individual freehold properties, while common areas would be managed by a commonhold association, owned by the freeholders of the flats.

Stamp Duty Land Tax

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

During the Autumn Budget, the Chancellor revealed a stamp duty hike for second-home buyers and landlords, with the additional stamp duty rate rising from 3 percent to 5 percent 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 over this amount, you’ll pay stamp duty tax at 5 percent 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 that anybody buying their first home from this date onwards will have to pay 5 percent stamp duty tax on properties priced between £300,001 to £500,000. If the home you are buying is priced over £500,000, you cannot claim the tax relief.

EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel