A look forward to what 2025 has in store from a property perspective
2025 has the potential to see some significant reforms and developments in the property sphere.
Here, Sarah Barratt, partner in our real estate dispute resolution team, rounds up some of the things to look out for…
Landlord and Tenant Act 1954
The Government is consulting on the right to review business tenancies. Currently, Part 2 of the Landlord and Tenant Act 1954 gives tenants the right to renew a business tenancy, at the end of the term, giving tenants security of tenure.
The parties however, can “contract out” of these provisions, meaning a tenant, who has a “contracted out” tenancy has no security and has no right to a renewal tenancy at the end of the term.
The government is looking at the system of security and the current model of contracting out, including whether the types of business tenancy which current benefit from security of tenure are the right ones.
There are also three alternative models which are being looked at including:
- Mandatory security of tenure
- Abolition of security of tenure
- A “contracting in” model
This consultation has long been promised, so look out for potential changes to business tenancies coming up.
Renters Rights Bill
It is not just commercial tenancies under the spotlight. The Renters Rights Bill is currently making its way through Parliament and will be a significant shake up for residential tenancies.
Key changes will include:
- Abolition of the s21 ground for possession
- Abolition of fixed term tenancies – all tenancies will become periodic
- Changes to the grounds for possession including some notice periods
- Improved regulation
- Improving standards of rented homes
- Prohibition of rental bidding
- Giving tenants the right to request a pet
This is likely to become law during 2025 so keep an eye out for when key changes will happen.
Leasehold and Freehold Reform Act
This legislation was passed to improve the rights of residential long leaseholders. Although already on the statute books, not all provisions are effective.
The government has announced that during 2025 it will implement the removal of the requirement for leaseholders to wait for 2 years after purchase in order to be able to buy their freehold or extend their lease. The Government will also enact the Right to Manage measures in the Act.
Expect consultations during the course of the year also in respect of:
- A ban on buildings insurance remuneration
- Valuation rates used to calculate the cost of enfranchisement premiums
- New consumer protection provisions for homeowners on freehold estates
- Increasing service charge transparency and legal costs
- Increasing transparency around insurance charges passed on to tenants by landlords, freeholders and managing agents
- Moving away from a leasehold system to a more modern commonhold system
High Street Rental Auctions
Regulations brought in towards the end of 2024 gave powers to local authorities to auction a 1 – 5 year lease in respect of commercial properties which are persistently empty, with a view to revitalising high streets and to reduce the number of empty premises.
Regulations set out a process to be followed, but it remains to be seen whether local authorities will grasp these new powers and the extent to which they will use them.
Building Safety
The Building Safety Act 2022 is now in force and much has been written about its impact.
As cases make their way through the tribunals and courts system, cases are now reaching the court of appeal.
We can therefore expect some landmark judgments in 2025 on key aspects of the Building Safety Act including:
- Costs relating to applying for dispensation from the section 20 process where works are required to remedy a building safety defect
- Whether costs incurred before 28 June 2022 could be subject to a remediation contribution order
If you have any queries about the legislative changes listed above, or on property disputes in general, contact Sarah using 0191 211 7923 or [email protected].