Real Estate Bulletin - January 2025

The Year Ahead 2025

In this Year Ahead edition we explore what the future holds in technological transformation, health and longevity, political systems and finance, and sustainability.

We asked 500 in-house legal professionals across the globe to share their thoughts on what’s on the horizon. We presented them with Hollywood-inspired scenarios—from mandatory health tracking to zero-waste societies—and asked them which are the most likely to unfold. Futuristic as they might sound, many of the scenarios we posed are already transforming many industries today. 

Find out more here.

Renters’ Rights Bill progresses through parliament

The Renters’ Rights Bill (the Bill) continues its passage through parliament having concluded its report stage and third reading in the House of Commons on 14 January 2025. Its second reading in the House of Lords, where the Bill will be debated, is scheduled for 4 February 2025.

You can read a summary of some of the key provisions in the Bill here.

In a press release issued on 14 January the government highlights some of its key further amendments to the Bill to ‘strengthen tenant rights and protections’. Measures highlighted include:

• restricting a landlord’s ability to request more than one month’s rent in advance (a landlord will still be able to request a security deposit).
• an amendment that discourages student leases being signed before March in the year in which they are intended to commence. The government’s amendments would prevent the use of possession ground 4A (which allows for possession where a HMO is let to full-time students and is required for a new group of students in line with the academic year) in instances where a student tenancy was agreed more than six months in advance of the date of occupation. The government notes that this is intended to discourage ‘landlords from pressuring students into early commitments’.
• restricting a guarantor’s liability in certain circumstances following the death of a tenant.
• Closing ‘potential loopholes in rent repayment orders (RROs), ensuring superior landlords can be liable for RROs if an offence has been committed even if the rent was not paid directly to them, but through an agent or intermediate landlord’.
• Using fees paid by landlords to ‘directly fund the creation and work of the private rented sector Ombudsman’. The government has stated that their intention is to ‘expand the scope of what can be covered by the compulsory fee that private landlords will be required to pay to fund the new PRS landlord ombudsman’. It is stated that this will ensure that the fee can cover the set-up costs of the ombudsman and provide for ‘access to an effective and fair dispute resolution service’.

In relation to the private rented sector database the government also notes that ‘database fees will be calculated and agreed at a later date, with further details set out in secondary legislation and developed on the basis that fees must be reasonable and proportionate’. However, the government is amending the Bill to ‘enable fee revenue to include PRS enforcement costs incurred by local housing authorities’.

The exclusion of Purpose Built Student Accommodation from some or all of the reforms has still not been included in any draft legislation.

Leasehold and Freehold Reform Act 2024

On 31 January 2025, provisions in the Leasehold and Freehold Reform Act 2024 will come into force which will mean that leaseholders no longer have to have owned their property for two years before they have a right to extend their lease or in the case of a leasehold house either acquire the freehold or extend their lease.

Commercial tenancies and minimum energy efficiency standards – is an update coming?

On 17 December 2024 the government published its response to the Climate Change Committee’s (CCC) 2024 progress report. The response is headed 'Accelerating to Net Zero: Responding to the CCC Progress Report and delivering the Clean Energy Superpower Mission'. In this document, the government indicated that it is 'planning to publish the response to the Non-Domestic Private Rented Sector MEES consultation early in 2025'.

A response to this consultation will be welcomed by the property industry, which has been calling for clarity in this area for some time, particularly given the trajectory in the 2021 consultation indicated a phased implementation of the EPC B by 2030 requirement, with EPC C by 2027 set as an interim milestone (with the first compliance window opening in April 2025). The lack of response to the consultation has caused considerable uncertainty for landlords.

If a response is published, following the fact the government issued a consultation on EPCs in December, it certainly appears that this is once again an area of focus for the government, particularly given consultations on the minimum energy efficiency standards of homes in both the private and social rented sector have also been announced, although they have not yet been issued.