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The New Year is a good time to put pen to paper, set goals, and create a plan for the year ahead.
In my previous article, I explored what to expect from the rental market in 2025. I found that the year ahead is likely to be shaped by the legislative changes that Labour’s Renters’ Rights Bill will introduce and the persistent supply and demand imbalance across both the housing market and the rental sector. After a few years of turbulence, the good news is that the economy is looking more stable this year and will hopefully continue on a slow upward curve.
The predictions and trends noted in my previous article are the perfect place to start when planning for the year ahead.
In this article, we’ll explore how landlords can plan for a successful year, providing action points to help you address the economic, legislative, and market trends set to shape 2025. From ensuring compliance with new regulations to identifying opportunities for growth and investment, the tips in this article will help you stay ahead of the curve and position your portfolio for success.
Key action points for 2025
Read through the key action points outlined in this article and add those that are relevant to your rental business to your to-do list for the New Year.
Ensuring compliance with legislative changes
Complying with all relevant legislation is fundamental to the success of any business. With significant reforms due to come into effect in early 2025, landlords must prioritise understanding these changes and making changes to ensure compliance. Starting the year with a proactive approach will help you avoid potential penalties when the bill comes into force.
Familiarise yourself with the key reforms – Make sure you have familiarised yourself with Labour’s Renters’ Reform Bill and fully understand the new requirements for compliance to avoid penalties once the bill becomes law. Sign up to receive updates from landlord associations or other property new outlets to stay up-to-date with the timeline for the bill’s implementation.
Review and update your tenancy agreements – All fixed-term tenancies are to be replaced with rolling, periodic tenancies under the new Renters’ Rights Bill. Audit your existing tenancy agreement to identify what needs changing or what is missing to ensure compliance with the new legislation.
Familiarise yourself with the strengthened Section 8 grounds for eviction – Prepare for the end of Section 21 “no-fault” evictions by familiarising yourself with the strengthened Section 8 grounds for eviction – this will now be your primary method for reclaiming your property.
Implement a rent review schedule – Once the Renters’ Rights Bill becomes law, you will only be able to increase rent once per year to the market rate. Make sure that the rent you are currently charging aligns with local market conditions and implement clear rent review schedules within your tenancy agreements to remain transparent and compliant.
Strengthening your property and business operations
In 2025, legislative changes and increasing expectations around property standards will put landlords under more scrutiny than ever before. Landlords will need to take proactive steps to improve both their properties and their processes if they want to thrive in 2025. Starting the New Year by strengthening your operations will help you remain competitive in the evolving rental market.
Conduct a property audit – Once the Renters’ Rights Bill becomes law, all rental properties will need to meet the Decent Homes Standard. According to these standards, properties must be free from health hazards like damp and mould, feature modern kitchens and bathrooms, and provide a warm, well-insulated living environment. Additionally, under the new Labour government, landlords are required to meet a new minimum EPC rating of C by 2028 for new tenancies and 2030 for all tenancies. Now is a good time to assess what upgrades are required to meet these standards. Obtain quotes on the work so that you can build a budget to spread the costs over time.
Budget for increased compliance costs – Prepare for the financial impact of upcoming changes to legislation by budgeting for legal advice, property upgrades, and unexpected expenses. Obtain quotes for necessary property improvements and create a contingency fund to cover any unexpected costs. If significant upgrades are needed, research available tax relief or government grants to offset costs. Acting early will help you manage expenses effectively while improving tenant comfort and property standards.
Review and improve your tenant screening process – Without Section 21, it will become harder to evict tenants. Review your tenant screening process to ensure it is comprehensive enough, as it will become more important than ever to find trustworthy and reliable tenants.
Start using landlord software – If you’re not already, invest in specialist Landlord Software like Landlord Vision to help streamline and automate many aspects of managing your property portfolio. From tracking rental payments and maintenance schedules to simplifying compliance and tenant communication, these tools save time, reduce manual errors, and improve operational efficiency. Landlord software can also provide valuable insights into your portfolio’s performance, helping you to make more informed business decisions in 2025.
Maximising financial opportunities
With stabilising mortgage rates, falling interest rates, and strong rental demand, 2025 could offer landlords a chance to improve their financial position and grow their portfolios. By reviewing your finances, streamlining costs, and exploring strategic investments, you can maximise your portfolio’s profitability and long-term value.
Run a cash flow forecast – Get a detailed picture of your current financial position and identify areas where there’s room for improvement. Evaluate your expenses, check what you’re paying for, and determine if there’s any scope to reduce your expenses. Compare service providers and switch if you find a cheaper deal elsewhere.
Review your mortgage agreements – With interest rates falling and mortgage rates stabilising, now is a good time to review your mortgage agreements and consider refinancing to a better rate. Consult a mortgage advisor to assess if this could help you unlock potential savings.
Evaluate opportunities for expanding your portfolio – Consider capitalising on falling interest rates and mortgage stability by expanding your property portfolio this year. Look at property within regions that are predicted to see stronger growth in house prices, like the North of England. Consider investing in small and affordable rental properties to meet tenant budgets and offset stamp duty costs.
Consider investing in or redeveloping property into HMOs – With demand for affordable, shared housing at an all-time high, investing in or converting properties into Houses in Multiple Occupation (HMOs) can be a strategic way to maximise your rental income. HMOs are well-known for generating significantly higher rental yields compared to traditional buy-to-let properties, as they allow you to rent out individual rooms to multiple tenants while maintaining a single property. If you’re considering redeveloping a property within your portfolio into an HMO, ensure that it meets local HMO licensing requirements and safety standards before proceeding.
Consider converting underused spaces into rentable units – Explore opportunities to increase supply within your portfolio to adapt to the supply and demand challenges the housing market is facing. Consider converting underused spaces like additional reception rooms or lofts into additional bedrooms. Ensure that any rooms you convert meet the minimum dimension requirements and that the property has adequate facilities to handle an additional tenant.
Plan renovations to maximise your property’s value – Assess if any smart renovations could help boost your property’s value and appeal. Consider making modern upgrades or introducing energy efficiency features to boost your property’s value and potentially maximise the amount of rental income it generates.
Review and update your business goals
The New Year marks a new chapter for your property rental business. Now is a great time to reflect on last year’s performance and set clear, actionable goals for the year ahead. By evaluating what went well last year and which decisions you’d rather forget, you can create a strategic plan to drive growth and maximise your portfolio’s profitability.
Evaluate last year’s performance – Review rental income, expenses, and overall profitability for each property in your portfolio. Identify underperforming assets and decide whether to improve, sell, or refinance them.
Set clear goals for 2025 – Think about what you’d like to achieve in 2025. Define specific goals, like increasing rental yields, reducing void periods, improving tenant retention, or growing your portfolio. Well-defined goals will not only give your business direction but also provide measurable benchmarks to track progress and keep you accountable.
Create a financial roadmap – Create a budget for the year, accounting for maintenance expenses, compliance upgrades, and potential new investments. Ensure you build in a contingency fund to prepare for unexpected expenses.
Start the year by proactively addressing the challenges and opportunities ahead to set yourself up for success.
From ensuring compliance with new legislation to improving property standards and maximising profitability, staying organised and focused is key.
By setting clear goals, budgeting effectively, and making strategic improvements to your properties and operations, you can improve tenant satisfaction and increase your portfolio’s profitability.
Let’s make 2025 a year of growth and success.
