Sajjad Ahmad has been a landlord since the age of 18. He is now 61, a qualified lawyer, and devotes much of his time to helping fellow landlords navigate the myriad of tax and regulatory upheavals which have beset the buy-to-let market over the past decade.
Landlords like him now face many challenges: the new Labour Government has promised a wave of reforms and new regulations to further tip the balance in the favour of tenants.
The Government will soon get rid of assured shorthold tenancies, which were first introduced by Margaret Thatcher. For decades, they have let landlords set an end date on rental periods and evict troublesome tenants with two months’ notice – a practice now referred to as a Section 21.
“[Ms Thatcher] realised that landlords needed more security,” says Mr Ahmad, who was in his 20s during Thatcherite Britain.
“But now, the opposite is happening. If you want your property back, it’s becoming very difficult. If tax changes weren’t bad enough, you’ve got all this incoming legislation which really will be the nail in the coffin.
“Landlords can see the writing on the wall. The promise that you’ll get your property back has been broken.”
So what does 2025 have in store for buy-to-let landlords?
Renters’ rights
The Renters’ Rights Bill is expected to become law in spring. Under its terms, landlords will need to take back possession of their properties using a Section 8 – a piece of legislation they typically only use to recover substantial rent arrears.
If arrears are small, landlords tend to waive them for fear of racking up much larger legal bills with a Section 8 which can be subject to lengthy court delays. In one case overseen by Mr Ahmad, who is chief executive of the British Landlords Association, legal costs reached £80,000.
Landlords will also need to give an extra month’s notice, a decision many have since labelled as “another month’s free rent” for non-paying tenants. A review by estate agency Savills of 250 landlords found the majority – 58pc of them – cited this particular change “as a significant concern”.
In addition, landlords will be banned from charging more than a month’s rent in advance – a move the Government has said will stop tenants from being discriminated against. Ironically, however, experts say this will do the opposite because tenants with bad credit, the elderly and individuals who have moved from abroad all rely on this option.
Awaab’s Law
A legacy of former housing secretary Michael Gove, Awaab’s Law – which already applies to the social sector – will be extended to the private sector. It places time limits on how long landlords have to fix hazards in homes, giving them 14 days for investigation, and a further seven days to fix the problem.
If landlords don’t abide by the rules, they will receive a formal notice, and if that is ignored they could be fined up to £7,000, and could receive a banning or prohibition order if they repeat offend.
Currently, private landlords do not need to complete repairs in allotted timeframes unless personally instructed by the council.
EPC targets
On energy performance certificates (EPCs), Labour has reinstated targets dropped by the Tories, which will require all rental properties to achieve an EPC rating of C by 2030. When the last government proposed the same target, it consulted on a £10,000 maximum spend per property. Labour is yet to confirm whether it too will put a cap on landlords’ spending.
These sweeping changes – as well as relatively high mortgage rates – are expected to suppress transactions. Savills predicts that the number of mortgaged buy-to-let purchases will remain flat, at two thirds of the pre-pandemic level.
Lucian Cook, a research director at Savills, said: “That will constrain the amount of stock available to rent, thereby restricting tenants’ choice and putting further upward pressure on rents.”
The Tories started it
Labour’s latest reforms are a continuation of those made by previous Conservative governments.
It was a Tory government that first pledged to abolish Section 21, as well as Ms Thatcher’s shorthold assured tenancies, though it did agree to reform the courts first – something Labour has refused to do.
And in 2015, it was former chancellor George Osborne who slapped a three percentage point additional stamp duty levy on landlords looking to buy new properties.
That same year, he also decided to hammer existing landlords – laying out plans to cut mortgage relief to 20pc, a change that came into effect from 2017. It meant landlords could no longer pay tax solely on their profits, when previously they could deduct their mortgage interest from their taxable rental income.
Since Mr Osborne’s major buy-to-let shake-up, the proportion of landlords buying up property in the Tory’s southeastern heartlands has shrunk from 52pc to 35pc, according to data from Paragon Bank.
Landlord instructions, when a buy-to-let investor instructs an estate agent to list one of their properties, are continuing to slip. The Royal Institution of Chartered Surveyors found they were down 13pc over the past year.
At the same time, rents have risen rapidly. The average annual UK rental cost has risen by £3,240 since 2021, a 27pc increase compared to earnings growth of 19pc, according to property portal Zoopla.
While rental inflation has slowed substantially this year, it does still vary depending on the region you live in – with highs of 10.5pc still in Northern Ireland and lows of 1.3pc in London over the past 12 months.
‘My heart goes out to the tenants’
Like many of his landlord members, Mr Ahmad has become exasperated. Years of warning successive governments have achieved little, and now renters are the ones at the sharp end.
Sajjad Ahmad says successive governments were warned about the repercussions of rent reforms - Jeff Gilbert Photography
“[There was recently] a case in Brighton where a landlord wanted their property back. The family living in it had started to look for a new home. Both parents were working, but estate agents were telling them that because they were a family it would be hard to find somewhere because landlords – they said – preferred single individuals who cause less wear and tear.
“We’ve been warning that this legislation will encourage landlords to leave the sector, shrinking the choice that tenants have and therefore allowing those still in the market to be more selective.
“There’s no confidence in the sector, rents have increased, and letting agents have adopted an approach of creating rent-bidding wars. My own son has had to bid. I’ve never seen that in my lifetime. My heart goes out to the tenants. They are struggling even with decent wages.”
Scotland’s ‘unviable’ rent controls
Landlord confidence in Scotland is even more shot than it is in England, as the country tries to grapple with rent controls.
In 2017, it banned no-fault evictions and fixed-term tenancies. Then in 2022, an emergency bill engineered by former first minister Nicola Sturgeon froze rent increases for six months before capping them at 3pc.
Despite the cap’s intentions, the cost of a one-bedroom flat surged by more than 20pc after it was imposed, according to Scotland’s largest estate agent DJ Alexander. This was because landlords could still raise rents between tenancies.
Most recently, the Scottish government increased the additional dwelling supplement payable on the purchase of rental properties from 6pc to 8pc. This is the second time a government has raised the tax in just two years.
For John Blackwood, chief executive of the Scottish Landlord Association, it’s the government’s decision to bolster rent restrictions – by limiting how much a landlord can increase rent by between tenancies – which is worrying him most.
“Historically, lots of landlords haven’t increased rent mid-tenancy and have used the void period between lets to carry out improvements and reset the rent to market value.
“Landlords are concerned that without this option to reset rents to market value between tenancies, their properties will become increasingly unviable as costs increase at a faster rate than they can raise rents.”
Over half of his members say they are planning to reduce the size of their property portfolio over the next five years. Perceived hostility towards landlords from the Scottish government was cited by 79pc of members when asked why they were planning to offload their properties.
Wales’s ‘war on landlords’
In Wales, the stamp duty surcharge for second property purchases was recently raised by a further one percentage point shortly after England raised its own surcharge by two percentage points in the Budget.
Unlike in England, the Welsh stamp duty surcharge is linked to a property’s value, with the latest changes now taking the highest surcharge to 17pc.
Peter Weavers was, until recently, a landlord in Powys. He says the Welsh Labour government has “waged a war against private landlords”.
“The new UK government looks to be heading in a similar direction. We have kept rents pegged and provided well-maintained homes with any repairs being undertaken immediately at our cost… We had some good tenants – and a few poorer ones – who have had to look elsewhere in a market that is shrinking fast. It’s sad not to be able to help, but that’s clearly not what the Labour Party appears to welcome.”
‘The buy-to-let market is under relentless attack’
Craig Sullivan is a 36-year-old landlord. Unlike his predecessors – many of whom are now selling up, taking early retirement and investing in markets instead – this Kent-based property investor still has decades of work ahead of him.
Craig Sullivan, 36, saw a gap in the market while a student: ‘My landlord at the time was terrible,’ he says
Mr Sullivan was a student when he started doing up properties to let. His landlord at the time was terrible, he says. “The student housing stock at that time was shocking. I saw a gap in the market in Medway. Initially, I started with the property I was living in. Now, I have an agency and manage lots of landlords’ properties.
“The buy-to-let market in the UK is under relentless attack. Good landlords are being squeezed from every angle. And now, with higher mortgage rates in recent years, the lack of tax relief has been an absolute killer.
“Margins are quite tight, especially in the South East. The Government claims all these changes are improving standards, but the reality is that it’s shrinking supply.”
The Kent landlord said: “Old-school landlords are just reacting by putting up rents, but they’ve already gone up by double-digits. How long till that’s no longer an affordable option and rent arrears grow?
“Students spend their first year in halls and then come straight to us. They’re usually super price sensitive, and reliant on fixed student maintenance loans.”
Student housing pressures
Getting rid of rolling tenancies is the student sector’s biggest worry, as Labour is yet to say whether it will exempt student lets from these tenancies. The previous government had agreed to exempt purpose-built student accommodation providers (PBSA).
If student landlords can no longer set tenancy periods, then a tenant could drop out of their housing at any time – leaving a room empty during mid-term.
Tom Walker, director of student accommodation portal StuRents, says this isn’t the only change in the Renters’ Rights Bill posing a serious risk to the university housing system.
The bill will make it mandatory for students living in private landlords’ properties like Mr Sullivan’s to pay in monthly rather than termly instalments.
Mr Walker said: “This aspect of the bill has broadly slipped under the radar, but could have a seismic impact on student arrears.” If the number of private houses in multiple occupation shrinks, more students will become reliant on PBSA blocks.
Similarly, one sector trying to take advantage of all the private landlords selling up is “Build to Rent” – developers that build blocks of flats to let out to tenants and never sell.
Campaign groups like Generation Rent have warned that profit-driven institutional landlords have been linked to “unaffordable rent increases”.
