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‘We warned you’: the hammer blows about to be dealt to Britain’s rental market

In This Article:

House outline breaking apart on a 2025 calendar
House outline breaking apart on a 2025 calendar

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”.

Other changes will allow tenants who stop paying rent to stay put for three months rather than the current two, and then be granted a further four weeks’ notice before they have to leave.

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.