Property law: what to look out for in 2025

The new Labour government has set out its intentions for notable changes to property law in 2025. We highlight what landlords and tenants should be aware of in the coming year.

The Renters’ Rights Bill: impact on tenancies and evictions

The Renters’ Rights Bill had its third reading in the House of Commons on 14 January 2025 and has now passed to the House of Lords, who are due to sit on 4 February 2025.

The Government plans to overhaul the residential eviction process to provide tenants with more security over their homes. Housing minister Matthew Pennycook said the Act would “level decisively the playing field between landlord and tenants”.

• Fixed term assured tenancies and assured shorthold tenancies (ASTs) are set to be replaced with periodic assured tenancies. These periodic rolling tenancies will allow tenants to stay in their home until they decide to end the tenancy by giving 2 months’ notice.
• Fault based eviction notices (Section 8 notices) look set to stay but there will be longer notice periods and new grounds for eviction to navigate, the interpretation of which has potential to result in litigation. The current version of the bill still brings in a ban on “no fault” evictions and so Section 21 notices could be phased out, potentially as early as summer 2025.

The Leasehold and Freehold Reform Act 2024: revolutionisation of the residential leasehold market?

After a last-minute dash through the House of Lords, the Leasehold and Freehold Reform Act 2024 received royal assent on 24 May 2024. The majority of the Act has yet to be enacted but we may see elements of the Act come into force this year.

• From 31 January 2025, leaseholders will no longer have to wait two years after purchasing a property before exercising the right to extend their lease or to buy the freehold.
• The Government confirmed in November 2024, that in 2025, a white paper followed by a consultation would begin on the best approach to banning all new leasehold flats.
• In the Spring of 2025, a package of measures is due to be introduced to expand access and reform the cost rules and voting rights where leaseholders claim the ‘Right to Manage’. This will enable more homeowners in mixed-use buildings to take over the management of their building from their freeholders.
• Later in 2025, the Government has promised to make it easier for people to challenge unreasonable service charge costs, and, to set valuation rates used to calculate the cost of enfranchisement premiums (the price paid to purchase the freehold).

Stamp Duty Land Tax (SDLT) increases from April 2025

New Stamp Duty and Land Tax (SDLT) rates come into force from 1 April 2025:

• Buyers of second homes and investment properties will pay higher SDLT rates on properties, and there is the introduction of a new rate for properties over £125,000.
• First time buyers will also feel the pinch on SDLT relief, with the nil rate threshold reducing from £425,000 to £300,000.

Moreover, with the average property transaction taking 8-12 weeks, buyers in these categories may want to get ‘moving’ sooner rather than later to take advantage of the current SDLT rates.

The Landlord and Tenant Act 1954: consultation on Security of Tenure

The Law Commission is consulting on reforming the right to renew a business lease under the 1954 Act or the right to have “security of tenure”. Current Security of Tenure grants business tenants the right to remain in occupation of a property after the expiry of their lease and to negotiate a renewal of such. There has been no modification of the Act for 20 years and the proposed changes could have far-reaching effects on the commercial leasehold market.

The Law Commission is proposing alternative “models”:

1. No security of tenure
2. Opt in security of tenure
3. Opt out security of tenure
4. Mandatory security of tenure.

The initial consultation period will end on 19 February 2025.  Before the final report is released, a further consultation on the details of the suggested changes is expected.

High Street Rental Auctions: Efforts to bring back the high street?

On 2 December 2024, the Government fast tracked legislation relating to High Street Rental Auctions in an attempt to rescue struggling high streets.

Local Authorities now have the power to force landlords to let out properties on designated streets, which have been unoccupied for the whole of the immediately preceding year, or 366 days in the immediately preceding 2 years. It is a criminal offence for a landlord not to respond to requests for information about premises made by a local authority.

2025 has the potential to be a significant year of change for property law, and we await to see what impact the proposed legislative changes bring.

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be. If you would like a conversation to find out how we might help you, please get in touch.