2025: A perfect storm for landlords AND tenants?

Oh, dear. It’s 2025 and the private rented sector is set for one of its biggest upheavals in years – possibly decades.

Landlords are facing unprecedented challenges, thanks to the Renters’ Rights Bill and EPC deadline nonsense, but there’s more for small landlords, in particular, to consider.

If you are a tenant reading this, then please share on social media and remember to copy in the likes of Generation Rent and Shelter. Even if you don’t agree with what might/will happen this year, you’ll need this to refer back to next January.

I’m predicting higher rents, empty rental homes, landlords bailing out and a definite shift towards large institutional landlords making their presence felt.

That’s all good, right? Big landlords with large estates mean more choice? Wrong. More choice means lower rents. Wrong again.

Smaller landlords leaving the PRS is great news, right? Nope. Fewer smaller landlords mean selling up and the remaining landlords putting rents up to meet higher costs.

Plus, with stronger demand for fewer homes, guess what will happen to rents?

Unintended consequences of policy initiatives

I refer often to politicians not understanding the unintended consequences of their policy initiatives.

This became apparent with the Renters (Reform) Bill and now the scary Renters’ Rights Bill.

Years of disinformation mean that tenants, tenant activist groups, the media and politicians don’t understand what will happen with some of their crazy ideas.

I accept that politicians often introduce regulations with good intentions, but without fully considering the knock-on effects.

A prime example is the Renters’ Rights Bill, which aims to improve tenant protections. Who can argue with that?

However, by removing Section 21 ‘no-fault’ evictions – we really need to start calling this ‘no reason given’ because there is almost always a reason – landlords fear being trapped in lengthy legal battles to evict tenants.

It’s a bad eviction process now and with the inept clowns of Labour in charge, it will get worse.

If we can’t get possession of a rented property, why bother renting it out?

It might sound like great news that tenants can’t be ‘turfed out onto the streets’, as Shelter often declares, especially for those renters not paying rent, naturally, but what about the landlord?

Such a move will make us more risk-averse in our tenant selection (forget Labour’s plan to protect families, tenants with pets and those on benefits – it ain’t happening).

It will also potentially lead to a surge in evictions before the law changes.

The unintended consequence of banning Section 21 will, inevitably, mean MORE evictions will take place this year.

Cost of compliance with new regulations

Then we have the cost of compliance with new regulations – which includes the barmy idea that councils can introduce the selective licensing of rented homes if they want to.

That means the good landlords will comply and tenants will pay for the licence, while criminal landlords dodge another bullet.

Coupled with rising interest rates and maintenance costs, landlords’ profit margins are being squeezed.

But that’s OK isn’t it because no one should be exploiting tenants.

Except we run a business, not a social charity and we have bills to meet in running a rental property.

With an EPC rating of C being required for rented homes by 2030 (after Labour have long been voted out) means that the running costs for lots of us are going to rise.

The prospect is already forcing many smaller landlords out of the market, which reduces the supply of rental housing.

As demand outstrips supply, rents will rise, putting a strain on tenants and potentially discouraging new landlords from investing.

The departure of smaller landlords could also lead to a consolidation of the PRS with large institutional investors becoming the dominant players.

But that’s good, right?

No, actually, it’s not. This could result in a lack of competition, leading to higher rents and less flexibility for tenants.

Tenants also need to appreciate that institutional landlords will definitely be using strict criteria for selecting tenants. They won’t be interested in benefit tenants.

PRS is facing a perfect storm

So, my big prediction for 2025 is that the private rented sector is facing a perfect storm.

There will be more empty homes as landlords try to sell, higher rents and a less diverse landlord market are all on the horizon.

The government – and the utter clown show of the previous administration – must take responsibility for the unintended consequences of its policies.

It needs to strike a balance between protecting tenants’ rights and ensuring a healthy and competitive rental market.

This could involve simplifying regulations, dropping the EPC mandate, reintroducing tax relief and supporting small landlords instead of vilifying us.

The future of the private rented sector is uncertain, but landlords will try their best to navigate the challenges and continue to provide quality housing to tenants.

Those that can’t face the storm have left, or will leave, but for most tenants they’ll have a landlord to depend on, one who respects them and provides a quality, safe home.

You won’t read about the majority of good, decent landlords or see us on TV news reports, but we are here and despite the efforts of our second-rate politicians, we will try to be here for years to come.

That is to provide you and your family with a home that is comfortable and well-maintained. Don’t believe the negative comments that we are all bad – just like our tenants, most of us are good but the media and tenant activist groups only focus on the awful ones.

Until next time,

The Landlord Crusader

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