Market Updates - March 2025
Hello!
Welcome to my latest blog on the wonderful world of property.
It’s an interesting time with the Stamp Duty deadline looming. From speaking to a couple of conveyancing solicitors recently I know they are busy with lots of buyers hoping to avoid the increase. Thankfully, I haven’t got any applicable projects in conveyancing so I can relax!
Zoopla recently released their latest House Price Index (HPI) data which made for interesting reading. They reported that house prices have risen by 1.8% compared to 12 months ago. That represents a slowing in the market in comparison with recent months; largely driven by an increase in available homes - up by 11%. Sales agreed are up by 5% compared to 12 months ago which possibly reflects the fact that there are more sales available to agree.
Turning to the rental market, Zoopla report that rent inflation is cooling and now at its lowest rate for over three years. Rents are increasing by 3% on average, compared to 7.4% a year ago so a fairly significant shift. This has been caused by a significant drop in rental demand - down 17% compared to this time last year!
Anecdotally, I know rental demand is still sky-high in the North West for good quality, well-priced stock. My Project King apartments hit the rental market last Thursday and all three were snapped up at asking price within 24 hours. In fact, we even had a decent sized waiting list!
My local experience is also represented in Zoopla’s national statistics which show there are 12 potential renters chasing every available property. That’s down from 24 per property in recent years so again represents a cooling but it’s still up from pre-pandemic levels.
As mentioned previously, Zoopla had predicted a rise of 4% in rents this year. They have tempered that slightly by now predicting a slightly lower increase of 3-4% but still we seem on track for a strong year of growth.
You might have heard there are some legislation changes in the pipeline for 2025 that will impact landlords and tenants.
This summer is expected to see the Renters Rights Bill become law so here’s a quick summary of what’s coming our way:
The end of ‘no fault evictions’ (Section 21).
This will leave only ‘Section 8’ evictions which require specific grounds to be proven in court, such as rent arrears or anti-social behaviour.
This is probably the most significant change for landlords and will essentially just slow down the eviction process. Section 21 evictions have been used most commonly by landlords in recent years no matter what the eviction reason as they allow for a quicker court process. I know from experience that even that process is not quick with it typically taking well in excess of six months to get possession of a property from a tenant who has stopped paying rent.All tenancies will become periodic.
Currently, tenancies can be for fixed periods, meaning they are assumed to be ending on a fixed date. However, the shift to periodic tenancies only will mean a tenancy will only end when either party gives notice. In practice, most tenancies are already this type (even if there is an initial fixed period) so this is unlikely to have a big impact on the rental sector.Rent bidding wars are to be banned.
This means landlords and agents are to be prevented from encouraging or accepting rents above the listed rate. They will also need to list a rate in the first place! For the majority of landlords, this won’t change anything. However, in some high rental demand areas it will put an end to what has sometimes resembled an auction process in recent years. I can only see this as a good thing. It might mean some landlords will get less rent in the short term but it will provide transparency to all involved and prevent renters overpaying only to move out as soon as possible to pay market rent elsewhere.In-tenancy rent rises are to be limited.
Landlords will only be able to increase rents mid-tenancy once a year. When they do, it will be capped at whatever is deemed the market rate (by a Tribunal, if necessary). In practice, this is no different than any decent landlord will already be doing but hopefully it will stop any rogue landlords trying to take advantage of hot rental markets.
A new ombudsman service is to be set up.
This will provide a mediation service between landlords and tenants with the aim or reducing the number of cases that proceed to court. Given the abolishment of Section 8 evictions will slow down the repossession process this might be an avenue for both parties to reach a conclusion more promptly.
Overall, I see the increase in legislation as a good thing. There are still too many rogue landlords out there giving us good ones a bad name!
I would hate to see the eviction process being slowed down for legitimate cases where repossession is necessary and lawful but I can see how the current system might be open to abuse.
It remains to be seen whether all of the above come into effect but this is what’s currently predicted so watch this space!
That’s all for this edition. I’ll be back next month with some updates on my own projects. Have a great month in the meantime!
Thanks for reading,
John