UK property will be a buyer’s market in 2025

Renters’ Rights Bill moves to Report Stage

Good news! The Renters’ Rights Bill of the UK government is moving closer to becoming a reality as the Report Stage is scheduled for 14th January in the House of Commons. We expect a debate from MPs about all the proposed amendments throughout the committee stage. This rental reform is set to be the labour priority, so we will see major changes for landlords and renters once this bill progresses. Here’s more: What’s Inside the Renters’ Rights Bill? Section 21 evictions will be removed, providing tenants with greater security to challenge unfair practices without fear of eviction. If landlords evict tenants to move in or sell and misuse the possession grounds, tenants will have more time to find a home. Tenants can appeal excessive rent increases designed to force them out, whilst landlords retain the right to adjust rents to market levels with oversight from an independent tribunal. Mediators will resolve tenant-landlord disputes fairly, providing binding resolutions similar to those in social housing. A private database will be created for landlords to understand legal obligations and assist tenants in making informed decisions. Tenants will have the right to request pets, which landlords cannot unreasonably refuse. Renters will benefit from safer, better-quality homes. Landlords will be given clear legal timeframes per Awaab’s Law to address serious hazards, ensuring quicker action to make homes safer. Landlords and agents will be prohibited from discriminating against tenants receiving benefits or with children. To end rental bidding, landlords and agents must advertise a set rent and cannot accept offers above this amount. More civil penalties, investigatory powers, and mandatory reporting on enforcement activity will strengthen local authorities’ ability to regulate. Superior landlords will face extended rent repayment orders, with increased penalties and mandatory repayment for repeat offenders. Why was this Bill Introduced? The private rental sector has faced growing criticism over issues like insecure tenancies, substandard housing, and limited renter protections. The economic pressures of recent years, including inflation and a cost-of-living crisis, have uplifted these issues. Renters’ Rights Bill was introduced to address these challenges and create a balanced relationship between landlords and tenants. What Does This Mean for Renters? This bill represents a significant step forward for tenants. Eliminating no-fault evictions means renters can plan their lives without the constant fear of being asked to leave their homes unexpectedly. A landlord registry will empower tenants to verify the legitimacy of their landlords, and the right to request pets reflects a growing recognition of tenants’ personal needs. The Impact on Landlords Landlords, however, may face challenges adapting to the new regulations. The proposed measures will require compliance with stricter standards and increased scrutiny through the landlord registry. Whilst these changes promote fairness, landlords may need to invest in better property management practices to meet the updated requirements. What’s Next for the Bill? The Report Stage is a key phase in which MPs debate and refine the bill’s provisions. Stakeholders from tenant advocacy groups and landlord associations are actively engaged to ensure their concerns are considered. Once this stage is complete, the bill will proceed to its third reading in the House of Commons and then to the House of Lords.

Rents Set to ‘See Another Major Spike in 2025’ Despite Recent Dip

The UK rental market is bracing for a significant surge in rents throughout 2025, following a brief decline in 2024. The anticipated rise is attributed to ongoing challenges in the housing sector, including limited supply, heightened demand, and regulatory changes. Current Market Overview In late 2024, rents across the UK saw a modest dip of 2-3%, offering temporary relief for tenants. This decline was largely due to a cooling economy and stabilising inflation. However, experts warn that this trend is reversing, with rents projected to rise by as much as 6-8% in 2025, placing further pressure on tenants across the country. According to data, urban areas such as London, Birmingham, and Manchester are likely to witness some of the steepest increases. This has reignited concerns about housing affordability, particularly in high-demand regions. Why Are Rents Increasing Again? Shortage of Rental Properties:A persistent lack of supply continues to underpin the rental market’s challenges. Many landlords have reduced their portfolios due to stricter regulations and rising costs, leaving fewer properties available for tenants. Increased Tenant Demand:Demand remains high as more people turn to renting, whether due to high interest rates preventing home purchases or lifestyle changes prioritising flexibility. The private rental sector now accommodates more households than ever, intensifying competition. Regulatory and Policy Impact:Legislative changes, including the upcoming Renters’ Rights Bill, aim to enhance tenant protections but have also increased operational costs for landlords. These costs are often passed on to tenants in the form of higher rents. Economic Stabilisation:As the UK economy shows signs of recovery, tenants are expected to compete more aggressively for desirable properties, particularly in urban centres, pushing rents upward. Regional Insights London and South-East: Expected increases of up to 10%, driven by strong demand from professionals and international students. Midlands and North-West: Likely rises of 5-7%, particularly in major cities such as Birmingham and Manchester, where demand remains robust. Scotland and Wales: More modest increases of 3-5%, although hotspots in urban areas could experience sharper spikes. The Impact on Tenants and Landlords The forecasted rental hikes are set to challenge tenants, with affordability becoming a significant concern: Shared living arrangements may rise as tenants seek to minimise costs. Low-income households and younger tenants could face increased barriers to securing suitable housing. For landlords, higher rents may seem like an advantage but come with risks, such as potential tenant arrears and void periods. Compliance with new regulations and rising operational costs will also require careful management. Preparing for the Changes Tenants: Consider budgeting for potential increases, exploring long-term leases to lock in current rates, and researching areas with better affordability. Landlords: Stay informed about regulatory requirements, optimise property management practices, and maintain open communication with tenants to foster long-term relationships. The expected spike in rents highlights the need for continued focus on housing policies and collaboration to address the underlying issues affecting supply and demand. Stay updated with Cribs Estates for the latest insights into the UK property market. References: https://eldridgeestates.co.uk/blog/brace-for-impact-rental-prices-expected-to-surge-again-in-2025-despite-recent-dip/41064 https://propertyindustryeye.com/rents-set-to-see-another-major-spike-in-2025/

Bank of England Multiple Interest Rate Cuts Expected in Major Boost for Mortgage Borrowers

The Bank of England (BoE) is preparing to implement a series of interest rate cuts in 2025, offering significant relief to mortgage borrowers. Following a period of elevated rates aimed at curbing inflation, the BoE’s move signals a shift towards stimulating economic activity and easing financial pressures for homeowners. Why Are Interest Rates Being Reduced? The BoE’s decision to lower interest rates comes in response to cooling inflation and stabilising economic indicators. After reaching a peak of 6% in 2024, the BoE has already reduced the base rate to 4.75%, with further cuts expected in the coming months. Analysts predict the rate could drop as low as 3.5% or even 3% by the end of 2025, marking a return to more borrower-friendly conditions. This policy shift aims to make borrowing more affordable for households and businesses, thereby boosting consumer spending and supporting economic recovery. With inflation trending towards the BoE’s target of 2%, the central bank now has greater flexibility to reduce rates without risking price instability. Impact on Mortgage Borrowers The expected rate cuts will directly benefit mortgage borrowers, particularly those on variable-rate and tracker mortgages. As rates decrease, monthly repayment costs will drop, providing much-needed financial relief to households. For instance: A homeowner with a £200,000 mortgage at a 6% interest rate currently pays approximately £1,288 per month. At a reduced rate of 3.5%, their monthly payment would fall to around £875—a saving of £413 per month. Fixed-rate mortgage holders nearing the end of their deals will also find improved options for refinancing at more competitive rates. The anticipated cuts are expected to rejuvenate the housing market, encouraging potential buyers who were previously deterred by high borrowing costs. Increased affordability may also drive demand, potentially stabilising or even boosting property prices. Economic Implications Beyond the housing sector, lower interest rates will have broader economic impacts. Reduced borrowing costs for businesses could spur investment and expansion, whilst consumers with lower debt repayments may increase their discretionary spending. These factors combined are likely to contribute to GDP growth in 2025. However, economists caution that excessively low rates could lead to unintended consequences, such as overheating in certain sectors or encouraging excessive borrowing. The BoE is expected to balance its rate reductions carefully to avoid such risks. Read More: UK property will be a buyer’s market in 2025 What Experts Are Saying Industry experts have expressed optimism about the planned rate cuts: Mark Preskett, Senior Investment Consultant and Portfolio Manager: Preskett notes, "It’s fair to say that inflation seems to be on the way down in the UK. That could pave the way for three or four rate cuts next year." Costas Milas, Professor of Finance at the University of Liverpool: Milas discusses the potential for the Bank of England to proceed with faster interest rate cuts in 2025, considering the current economic conditions. How to Prepare for the Changes Borrowers should take proactive steps to maximise the benefits of lower rates: Review Mortgage Terms: Check your current deal and consider switching to a fixed-rate mortgage if you prefer predictable payments. Seek Advice: Consult with mortgage brokers to explore refinancing options or secure the best available deals. Plan for Long-Term Goals: Use potential savings from reduced payments to build an emergency fund or invest in other financial priorities. Looking Ahead The Bank of England’s multiple interest rate cuts represent a pivotal moment for the UK economy. Mortgage borrowers, homebuyers, and businesses alike stand to benefit from reduced financial pressures, potentially ushering in a period of renewed economic optimism. As we move through 2025, staying informed and prepared will be key to navigating the changing landscape. Stay tuned to our newsletter for more updates on this topic. References: https://www.morningstar.co.uk/uk/news/258916/how-much-will-the-bank-of-england-cut-interest-rates-in-2025.aspx?utm_source=chatgpt.com https://propertyindustryeye.com/bank-of-england-multiple-interest-rate-cuts-expected-in-major-boost-for-mortgage-borrowers/ https://blogs.lse.ac.uk/businessreview/2025/01/07/the-challenges-for-uk-interest-rates-and-inflation-in-2025/?utm_source=chatgpt.com

UK property will be a buyer’s market in 2025

The year 2025 has begun with positive hope for the people of the UK looking to purchase new properties. Majority of analysts have already given a go-ahead for a shift in the market where the power is moving away from people selling. What this means for buyers is more options whilst choosing their dream living place and getting the best offers. Here are the key trends that are in line to reshape the UK property market for buyers: Key Highlights Throughout the UK, property prices are experiencing a dip of more than 5%, which was already forecasted by the market. More listing options are now available for the buyers to choose from. After the actions taken by the government, interest rates are on the neutral side, giving more confidence to the buyers. First-time buyers are seeing fresh schemes that are more supportive of buyers and keep the demand high in the market. Insights The UK property market will see a phase of correction after many years of high prices. All the pressure of the economy hammered in 2024, including the inflation rates, living costs, and the housing crisis, resulted in a huge dip in demand, which forced sellers to make their price structure with low profits. Additionally, the increased supply of newly built homes is reshaping market direction, offering buyers more choices and opportunities. The key factor in this shift is the reduction in interest rates. The Bank of England recently lowered rates to 4.5%, down from a peak of 6% in 2024. This move made mortgages more affordable, encouraging new buyers to enter the market. With lower borrowing costs, buyers can secure better opportunities and invest with greater confidence, further increasing the conditions that favour buyers over sellers. This news will empower people to buy more properties outside the busy regions of London, where affordability is the key deciding factor for families. Impact on Buyers and the Market After this news, the buyers will be more happy with the power to negotiate better. There will be more houses in the market, leading to less competition and better money-saving deals. The buyers who are in the market for the first time in 2025 will experience a strong position due to more affordable rates in mortgages to assist them with purchases. However, the sellers will have to face a real challenge here because their properties will take more time to sell, considering the price to be appealing to buyers. This whole process by the government is to balance the market and create equal opportunity for every player. The New Shift & What to Expect Now So, what this means is no more skyrocketing prices. If you listen closely to market experts, they recommend that buyers make well-informed decisions by partnering with estate agents who can carry out complete market research for them before the purchase. As the new opportunities take shape in 2025, the market can take advantage till the year's end, which gives investors a breather to capitalise on low prices. Sellers, on the other hand, will need to adjust their expectations to generate more interest for consumers. So, whether you are a first-time buyer or a seasoned investor, now is the time to explore the best options, plan thoroughly, and prepare for the purchase. References: https://www.theguardian.com/business/2025/jan/01/uk-property-buyers-market-2025-analysts-predict https://www.greatbritishlife.co.uk/magazines/national/24833877.property-experts-predict-stronger-house-market-2025/ https://www.finance-monthly.com/2025/01/uk-property-set-to-become-a-buyers-market-in-2025-analysts-say/