Landlords had much to contend with in 2024 and face challenges in 2025, too. But as a business we are always here to help support you in your mission to build a successful property letting business and, of course, to make money.
With so many legislative changes coming your way that can be a daunting prospect. Although rents have continued to rise, so too have costs. Keeping control of costs and savvy management will be key to making money in 2025. Here are five tips to help:
1 Keep control of the purse strings
Budget carefully. The Autumn Budget delivered an immediate hike in stamp duty on second and additional properties to 5%. This means additional costs for landlords looking to expand portfolios this year. You may want to investigate if becoming a limited company might be more tax-efficient.
Tenants also face budgeting challenges, despite inflation and interest rates falling from their previous peaks. Rental prices continue to rise – up 5% over the year in the East of England for example — but tenants can only pay so much. You may want to consider diversifying your rental strategy to spread your risk, catering to other markets such as HMOs and student housing where returns are higher.
2 Be aware of legislative changes and act early where you can
Legislative changes, such as those within the Renters’ Rights Bill haven’t yet been fully confirmed. But we know what they are likely to include, such as changes to tenancy structures and eviction practices.
Others, such as changes to pet ownership rights, are less revolutionary but their early adoption will help to win tenants. Rather than waiting for them to ask, where you can, make changes to your property to improve its pet-friendliness and make it clear that pets are welcomed rather than tolerated. Such changes help to show you as a proactive landlord.
3 Improve energy efficiency to cut costs and appeal to tenants
Energy efficiency rules are also changing, with landlords required to improve the energy performance of their properties to a C rating by 2030. Further details of how they are expected to do this will be revealed this year. Tenants know this has environmental and monetary benefits so will be eager to see it in the properties they rent regardless of the legal deadline.
4 Offer what tenants want to capture rental demand
Rental demand will continue in 2025 even though a greater proportion of tenants are likely to make it onto the property ladder as interest rates and mortgage rates ease. Rental supply will remain limited however with multiple tenants continuing to chase properties, especially if more landlords choose to leave the sector thanks to the imminent changes they face. Despite the short supply you still need to offer what tenants want in your market.
5 Manage effectively
Understanding your market, adapting your property to suit them and being a communicative landlord will continue to be key to success. Effective and efficient property management will be vital, especially with all the imminent changes that your business faces.
We Can Help
At Progressive Lets we are experts in the rental market in the Peterborough area and help landlords find and manage properties within a 50-mile radius. Get in touch to find out more.
