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Report maintenance What will 2025 hold for Bristol Landlords?
With 2024 coming to an end we look to 2025, a year that is likely to see significant change in the Bristol and wider UK rental market. To look at what is coming up we need to look at the wheels of change set in motion this year by Keir Starmer’s new government.
Impacts of the The Autumn Budget on the Bristol rental market
On the 18th of September, Rachel Reeves delivered the first labour budget in 14 years. A budget that needed to underpin the promises made during the election campaign and deal with the pressures on the public purse. Some of the biggest implications come from the need to raise taxes without touching the employees’ wage slips. Some of the biggest headlines for landlords include:-
A rise in stamp duty for additional properties
As of 31st October 2024, the Stamp Duty Land Tax (SDLT) rate on additional properties, such as buy-to-lets, was raised from 3% to 5%. For Bristol landlords, this means higher upfront costs when purchasing rental properties, especially for those expanding portfolios. So as an example, buying a £200,000 property means stamp duty increases from £6,000 to £10,000.
Capital Gains Tax Adjustments for Property Investors
While many anticipated a substantial increase, the rates on residential properties remain aligned with other assets. However, there are new rates that impact non-residential gains, with Capital Gains Tax rates rising to 18% for basic-rate taxpayers and 24% for higher-rate taxpayers. This alignment simplifies the CGT landscape but may still encourage landlords to be more cautious with portfolio sales, especially in high-growth property areas like Bristol, where selling a property could incur a more substantial tax.
Digital and Tax Compliance Commitments
Landlords with annual rental income exceeding £50,000 must transition to Making Tax Digital (MTD) for Income Tax by 2026, with thresholds extending to £30,000 by 2027. At The Letting Game, we are committed to supporting landlords through this digital transformation, ensuring tax reporting remains hassle-free.
Impacts of the Renters Rights Bill on the Bristol rental market
The new government’s Renters’ Rights Bill is set to reshape the rental landscape. Following rapid legislative progress, the bill is expected to gain Royal Assent and become law by Spring 2025. Key provisions include:
- Abolishment of section 21s the so-called “no-fault” eviction
- The end of fixed-term tenancies effectively creating periodic rolling tenancies
- The end of bidding wars – the published rent in the advert being the highest you can ask
- Lifting blanket bans on pets, children or tenants claiming benefits
- A new mandatory rental database of landlords
- The Decent Home Standard to be applied to the private rental sector
- No more rent in advance
For a bit more information on these, read our article on the “Renters’ Rights Bill.”
The Bristol market is still strong
Even though 2024 has been far more challenging than 2023 we still believe Bristol’s rental market is a good investment. Rents continue to grow and we aren’t expecting that to change as we move into 2025. At The Letting Game we are dedicated to making it easier for our landlords. With legislation like the Renters Rights Bill we’ll look at how we can make our landlords’ lives easier.
If you are considering turning your property into a rental, or are looking for a new letting agent to partner with – then just drop us an e-mail.
