New eviction rules for 2025

Hi there,

This is Chubby Wallet. The newsletter that teaches you how to profit from property trends before they go mainstream..

Here's what’s in store..

• General market update

• Potential property tax rises incoming

• Landlord’s guide to the new eviction reality

• How this investor made £62k in profits in 9 weeks at a property auction

The UK housing market is stable but not booming, offering opportunities for patient buyers.

We provide an update using Chris Watkin’s Week 31 update from Property Industry Eye, plus ONS and RICS data,

Listings and sales snapshot

Listings fell to 32,700 in late July due to summer holidays but are 3.7% up from 2024 and 7% above pre-COVID levels.

Watkin notes 10% more homes than a typical market, based on nine-year averages.

• Supply: 763,178 homes on the market in August, up 5,000 from July, 47,000 more than last year. Pre-COVID “slow” markets had ~660,000; hot seller markets, under 600,000.

• Demand: 25,000 homes sold subject to contract (SSTC) last week, averaging 26,500 in 2025—7.1% higher than 2024, 14.3% above 2017-19, nearing 2022’s busy pace.

«More homes are listed than sold, making 2025 busier for deals than 2024»

Economic drivers

Interest rates, which determine mortgage costs, spiked a few years ago to tackle high inflation (when prices rise fast).

Now, they’re steady—gilts (government bonds) yield 4.093%, up 0.087% weekly; swaps (lender rate agreements) are at 3.707%. 

This balance keeps the market from crashing.

• Supply vs. demand: More homes than buyers lead to price cuts—14.1% of homes reduced in July (vs. 12.1% in 2024, 10.6% five-year average). That’s ~90,000 monthly reductions, 33% above normal.

• Affordability: SSTC price per square foot was £344.78 in July, up 1.97% from 2024, down 0.5% from June. Wages grew ~1% after inflation (ONS’s CPIH measure). Home prices may rise 2-2.5% in 2025, below inflation (~2-3%) and wages (~5%).

• Economy link: GDP grew 0.3% in Q2 2025 (1.2% yearly), driven by services and 1.2% construction growth. Unemployment holds at 4.7%, but job vacancies dropped to 718,000, a 10-year low outside COVID.

Policy, lending, demographics

«««Government policies steer the market»»»

Public spending lifted GDP, but the Bank of England’s quantitative tightening (selling bonds bought during crises like COVID) pushes up long-term rates—30-year gilts at 5.568%, up 0.17% weekly.

According to Adam Lawrence (propenomix) QT could raise yields by 0.7%, adding billions to debt costs. Population changes show fewer inactive people (21%), but limited job creation curbs buyer growth.

• Policies: Sustained GDP growth could prompt rate cuts. Revised data eased April’s GDP drop, boosting confidence.

• Lending: Stable rates keep borrowing manageable but not overly cheap.

• Demographics: Lower inactivity hints at more potential buyers, but fewer job openings raise concerns.

Risks and opportunities

The market faces challenges but offers openings. Deal fall-throughs are low at 23.6% (vs. 24.2% average), meaning sales hold. Net sales are up 5.8% from 2024.

«Risks»

• RICS notes weak sales (-16% balance), especially in southern England.

• Tenant demand and landlord listings (-31%) are down, possibly due to policy shifts.

• QT’s high long-term rates could increase future mortgage costs.

«Opportunities»

• Price cuts (33% above normal) create deals for patient buyers.

• SSTCs suggest 2025 could rival 2022’s transaction volume.

• Investors: Flat prices offer entry points in a resilient market.

What’s next?

September may bring more listings and clear unsellable homes, per Watkin (@christopherwatkin on YouTube).

If GDP nears 2% and rates ease, the market stays strong. As of today, no new data alters this view, but monitor QT and budgets—they’ll shape the path.

Britain’s property tax framework—built on council tax bands frozen since 1991 and a stamp duty system that discourages mobility—is showing its age.

The Treasury is reportedly eyeing reforms to modernize this outdated structure, addressing barriers to homeownership and housing market fluidity.

Three key proposals are under discussion, each with distinct implications.

«Mansion tax: targeting high-value homes»

A proposed capital gains tax on properties worth over £1.5 million would affect a small but significant segment of the market:

• Scope: Approximately 120,000 higher-rate taxpayers, primarily owners of high-end properties like London townhouses, could face average tax bills of £199,973

• Impact: This targets wealthier homeowners, leaving most suburban properties untouched.

«National property tax: a stamp duty overhaul »

Replacing stamp duty with a sale-based property tax could ease the burden on first-time buyers. As Timothy Douglas from Propertymark notes,

By removing stamp duty’s upfront cost, this reform could:

• Boost Mobility: Encourage transactions by reducing financial penalties for moving.

• Support First-Time Buyers: Lower entry costs, potentially increasing homeownership rates.

«Local property tax: reimagining council tax»

A suggested annual 0.44% levy on property value—equating to £2,200 on a £500,000 home—would replace council tax, not supplement it

While this aims to align taxes with current property values, it could hit homeowners in high-value areas like London harder, where prices far exceed the national average.

London’s unique challenge

London’s housing market, with an average price of £550,000 and a house price-to-earnings ratio of 8.22 - meaning London homes cost 8.22 times more than the average income (compared to 6.55 nationally), is under strain.

Peter Graham from RSM UK warns that:

The downsizing dilemma

«A hidden issue in the housing market is the underuse of space».

Over 40% of homeowners aged 65+ live in homes larger than needed, locking up millions of bedrooms while families struggle.

However, as Heather Powell from Blick Rothenberg points out:

This paradox—needing more housing mobility but taxing transactions—could trap family homes in the hands of empty nesters.

Market dynamics

Speculation about tax changes is already influencing behaviour. TV property expert Kirstie Allsopp, speaking on Times Radio, cautioned that “flying kites” like this destabilizes the market.

Yet, this uncertainty might be strategic:

• Short-term surge: Sellers may rush to list properties before new taxes take effect, temporarily boosting supply and moderating prices

• Long-term risk: Persistent uncertainty could freeze transactions, as buyers and sellers wait for clarity.

Emily Williams from Savills highlights the broader issue:

«Taxation reform that removes barriers to moving” is overdue»

The current system penalizes relocations, hindering job mobility, school access, and the release of larger homes for growing families.

What to expect from the autumn budget

The chancellor faces a delicate balancing act.

Industry sentiment suggests targeted reforms (below) are more likely than a full overhaul:

• Mansion tax: A narrow, high-value tax is politically feasible, targeting a small, affluent group.

• Stamp duty reform: Broadly supported for unlocking market mobility.

• Council tax replacement: Likely too contentious for immediate implementation due to its wide impact.

The bigger picture

The UK’s property tax system isn’t just outdated—it’s a drag on economic dynamism.

By discouraging mobility, it limits opportunities for families and stifles housing supply.

The autumn Budget will test whether the government prioritizes modernization or opts for cautious tweaks. .

The Renters' Rights Bill has removed Section 21, which means landlords everywhere need to understand the expanded Section 8 framework.

The new system is more structured but entirely workable once you grasp the fundamentals.

Section 8: What's actually changed?

Gone are the days of simply serving two months' notice without explanation.

Now landlords must use specific Section 8 grounds with proper justification and evidence.

«The new system divides eviction grounds into 2 practical categories»

"It's Not You, It's Me" grounds (no-fault) These cover situations where landlords need their property back for legitimate reasons:

• Selling up: New Ground 1A gives 4 months' notice but requires one year tenancy minimum

• Moving in: Ground 1 now covers extended family (parents, grandparents, siblings)

"Actually, It Is You" grounds (tenant fault) For when tenants break the rules:

• Rent arrears: Now requires three months of serious arrears (up from two) for mandatory eviction

• Anti-social behaviour: Immediate possession for serious cases

The new numbers game

«Here's where the fundamentals have shifted for landlords»

• Extended notice periods: Most grounds now require 4 months' notice instead of 2. That's potentially doubling your void periods – time to factor this into your cash flow calculations.

• The 12-month protection rule: Want to sell or move in? You'll need to wait until the tenant's been there at least 12 months. This creates a mandatory minimum tenancy period for most no-fault grounds.

• Higher rent arrears threshold: Three months of unpaid rent before you can use mandatory Ground 8. Plus, if it's due to Universal Credit delays, you'll still have to wait.

Landlord compliance requirements

1. Professional record-keeping Section 8 requires solid evidence, not just basic paperwork. Every late payment, repair request, and communication needs proper documentation.

2. The database registration requirement Here's the crucial point – courts can't grant possession orders if you're not registered on the new Landlord Database. Registration is now mandatory for most possession proceedings.

3. Student housing opportunities New Ground 4A creates a specialist route for HMO student properties with June to September eviction windows. Perfect alignment with academic calendars.

Enforcement reality check

The bill isn't just changing procedures – it's strengthening penalties:

• Up to £40,000 fines for wrongful eviction attempts

• Two years' rent repayment orders (double the current maximum)

• Criminal penalties for landlords who abuse the system

«Regulatory oversight now has significant financial consequences»

What this means for your portfolio

• The Opportunities: Professional landlords who adapt quickly could benefit from amateur landlords exiting the market. Higher barriers to entry often mean better margins for compliant operators.

• The Challenges: Longer void periods, increased legal costs, and more complex procedures. Your monthly profit margins need more careful management.

• The Reality: Good landlords with compliant properties and proper procedures have little to worry about. It's the non-compliant operators who'll face the biggest adjustments.

Your action plan

• Register for the Landlord Database

• Review all tenancy agreements for compliance

• Upgrade your record-keeping systems

• Consider specialist landlord insurance

«Going Forward»

• Build longer void periods into financial planning

• Invest in comprehensive tenant referencing

• Develop stronger relationships with legal advisors

• Focus on tenant retention over turnover

The bottom line

The Renters' Rights Bill represents a significant shift toward professional landlord standards. More regulated, yes, but potentially more profitable for those who operate correctly.

Property auctions offer chances to buy low and sell high by fixing simple issues. Here’s a clear tactic, shown through Ranjan’s deal that earned £62,000 profit in nine weeks without renovations.

Use a checklist to stay focused

At a busy open house with 20 buyers, Ranjan used a nine-page checklist to assess a property in 30 minutes

• Tactic: Bring a detailed checklist covering structure, legal details, and finances to capture key information quickly.

• Why It Works: A checklist ensures you don’t miss details, helping you evaluate the property’s potential without needing extra visits.

Find Fixable Legal Issues

Ranjan checked the legal pack and found the property, a duplex with two flats, had expired planning permission.

This kept mortgage buyers away, lowering the auction price.

• Tactic: Review the legal pack for issues like lapsed permissions that you can fix. In this case, the flats were used for over four years, so retrospective permission was possible. Check with a solicitor.

• Why It Works: Legal flaws scare off buyers, reducing competition and letting you buy at a discount.

Buy with Fast Financing

Ranjan used bridging finance to buy the duplex cheaply, as mortgage lenders wouldn’t touch it.

• Tactic: Use cash or bridging loans to purchase properties with legal issues that block standard mortgages.

• Why It Works: Quick financing lets you grab bargains others can’t afford to bid on.

Fix the Issue and Profit In nine weeks

Ranjan got retrospective planning permission, making the duplex compliant.

«They sold it to owner-occupiers at a higher market price, earning £62,000 profit without renovations».

• Tactic: Resolve the legal issue, like getting retrospective permission, to increase the property’s value. Sell to buyers who can use standard mortgages.

• Why It Works: Fixing legal issues makes the property appealing to more buyers, boosting its price without construction.

This tactic—using a checklist, finding fixable legal issues, buying with fast financing, and resolving problems—helped Ranjan profit £62,000 in nine weeks and can work for anyone at auctions.

That's it for this week folks. Each week we'll cover strategies, updates and insights to help you succeed in real estate. We love this stuff!

If you Have questions or just want to chat, We want to hear it.

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