The UK rental market is no stranger to change, and with the Renters’ Rights Bill (RRB) on the horizon, landlords, tenants, and letting agents need to stay informed as those who do not keep up to date now, will be left in the metaphorical dust after the bill is passed.
Nothing is set in stone until the bill receives Royal Assent, so take the following as purely what we know for now, rather than gospel. Got it? Good! So, without further ado, here’s what we know so far—and what it could mean for the rental market landscape in the months to come.
Current Rental Demand & Market Trends
Before we step into the Renters Rights Bill, it is important to understand the current market landscape. Here is what we know –
Across the UK, there has been a ~30% drop in rental demand from tenants since January 2024.
Despite this decline, rents continue to rise due to a lack of available rental stock.
With rents up and mortgage rates down, now could be a favourable time for property investment despite the turmoil caused by the RRB.
New Sanction Checks – Effective 14th May 2025
Letting agencies will be required to conduct sanctions checks on all landlords and tenants under the Sanctions and Anti-Money Laundering Act 2018. If a guarantor is paying rent directly or interacting with the agent/landlord during the tenancy, they must also undergo checks, a big change from days past.
These checks will be mandatory for all letting agencies in the UK, agencies that do not comply will face fines.
Third-party companies such as Goodlord can manage these checks for tenants and guarantors as part of the referencing process. Check with your local agency how they intend to undertake these checks, as this might differ.
One major change is that AML checks will be conducted on allnew landlords upon instruction.
After what feels like an age, we now have some potential dates to put in place. Firstly, the Bill is expected to become law between July & October, with an implementation date shortly thereafter, likely in January 2026. We are expecting the changes to take effect immediately, there will be no grace period, meaning all fixed-term Tenancies will become periodic overnight.
Key Changes Include:
Impact on Letting Fees – With fixed terms disappearing, renewal fees will all but disappear. A sliding scale fee structure may be necessary if tenants leave shortly after starting a new Tenancy. This is something we are monitoring closely and will update all of our current landlords as and when we have more information. For landlords outside of our network, do check with your letting agent too and make sure to keep in contact with them about the RRB over the coming months.
Applies to Assured Shorthold Tenancies (ASTs) Only – Corporate lets remain unaffected.
A New Single Ombudsman – Landlords must register with a centralised Ombudsman or face fines. Agents are expected to be allowed to register on behalf of Managed Landlords.
New Digital Portal – A government-run landlord portal will be introduced for compliance monitoring.
Bidding Wars Banned – It will become illegal for tenants to offer over the asking rent, regardless of their situation. We are currently anticipating this could lead to landlords pricing higher initially before adjusting down. However, advice about this approach will be given as and when the time comes. It is not something we are expecting to recommend as you may end up pricing out a lot of your target demographic.
Anti-Discrimination Measures – Landlords cannot refuse tenants based on family status, children, pets, or benefits. For most landlords, this won’t change anything, but it is something to be made aware of.
Advance Rent Restrictions – The first rent period cannot be an advance payment, but loopholes are being debated. Our advice? Avoid creative workarounds – they are unlikely to hold up in practice and could well result in fines.
Rent Reviews & Inflation – Rent increases will likely have to align with inflation. Tenants will have easy access to tribunals to challenge hikes beyond this threshold at no cost to themselves going forward.
What Happens Next?
We’ll be keeping a close eye on updates, with more details expected in the coming months. Our MARLA-qualified colleagues are attending many Propertymark conferences over the coming months where more information will be available to us and will pass relevant details on to landlords and tenants as and when is suitable.
As we have stated, until the final bill is produced, everything remains hypothetical. But one thing is certain: change is coming, and preparation is key. If you have any questions do get in touch with us. We will help you as well as we can for now. We are planning on creating plenty of videos and blogs over the coming months about the RRB so be assured we will not be leaving anyone in the dark.
For expert guidance on Renting, Letting, Buying or Selling property in Bath, contact us today.
Recent figures from the Office for National Statistics (ONS) revealed that across the UK, nearly half a million households are occupied by individuals aged 65+ living in the private rental sector. This represents 6.7% of all OAPs now renting privately.
Ten years ago, only 267,000 households were occupied by individuals aged 65+ who lived in privately rented housing. At the time, this represented just 4.39% of OAPs. So, it is clear from the outset that the dynamics in the market have changed significantly, with over a 50% increase. So, what does this data mean?
WHY ARE RETIREES RENTING?
A survey by The Prudential a few years ago shed light on this upcoming trend. Nearly 60% of older renters have always been renting. Around 20% have sold their homes to address debt challenges, and another 10% have sold their properties intentionally with the desire to rent in older age, often using the proceeds to fund their retirement or allow more freedom and less maintenance.
Financial stability is increasingly important. Men in Bath, upon reaching 65, have an average life expectancy of 19.6 years, while women can expect to live an additional 22.1 years. Interesting when compared to the national averages of 18.1 years for men and 20.6 years for women.
However, longer life expectancies come with the challenge of sustaining finances over an extended period, particularly as inflation, rising living costs, and low interest rates erode retirement savings.
THE RENTAL LANDSCAPE IN BATH.
30% of people who live in Bath and North East Somerset (BANES) are over 65 years old. A significant majority of over 65’s, 76%, own their homes outright. 6% own their homes with a mortgage and then social housing accounts for 12%. This leaves 5% of over-65s in the area being privately rented.
This figure, whilst small, is on the rise. Anecdotal evidence suggests that property professionals are seeing more retirees in Bath choosing to sell larger homes they own and downsize into rented accommodation. This reflects a desire for more simplicity and financial flexibility upon retirement. Selling a home with or without a mortgage offers up substantial equity which can then be passed down to future generations via better investments, funds and allow a more comfortable retirement.
Renting also offers predictability. With a fixed monthly expenditure that typically includes property maintenance and potentially even services like gardening, retirees can budget with confidence. This arrangement removes the financial and logistical burdens of homeownership, such as unexpected repair costs, allowing for a more carefree retirement. Renting also offers flexibility, enabling older tenants to relocate with ease if their circumstances change, such as moving into assisted living or care facilities.
OPPORTUNITIES FOR BATH’S LANDLORDS:
This shift presents a unique opportunity for Bath’s buy-to-let investors. Older tenants often seek properties that are low-maintenance and designed to suit their needs. Semi-detached bungalows, particularly those located near essential amenities such as bus routes, GP surgeries, and shops, are in high demand. These homes are often preferred for their accessibility and practicality.
For landlords, catering to this demographic can yield excellent returns. Retirees typically value stability, making them reliable, long-term tenants. Furthermore, if a property meets their needs and provides additional conveniences like included maintenance services, they are often willing to pay a premium rent for the right home.
The Bigger Picture for Bath Landlords
As the population ages, the demand for rental properties suitable for older tenants is likely to grow as the Centre for Economics and Business Research (CEBR) stated in the report this summer that they expected the number of OAPs privately renting to double in the next decade. This trend presents both challenges and opportunities for landlords in Bath. By understanding the needs of this demographic and tailoring their portfolios accordingly, landlords can not only secure steady returns but also play a role in supporting the housing needs of an ageing community.
For the private rental sector, this demographic shift highlights the importance of creating housing solutions that balance profitability with social responsibility. As leaders in the Bath property market, we must champion approaches that meet these emerging needs while promoting long-term sustainability in the rental sector.
Are you a Bath homeowner or Landlord looking to sell in 2025?
If the answer is yes, then let us have a look at, on average, how long it takes for you to find a buyer for your Bath property and how long the solicitors will take to help get you moved in.
Independent research from Denton House shows that in the last 12 months, looking at the 1.06m properties sale agreed and the 816k properties exchanged, on average it has taken 73 days from the property coming on the market to the property becoming sold subject to contract (SSTC). This is up 6 days from the 12 months ending in June of this year.
From this point, it has then taken 113 days from the sale being agreed to completion. This is an improvement on the 117 days for the 12 months ending June 2024. The journey is a long one and not guaranteed as nationally, only 53.6% of UK homeowners who placed their homes on the market in 2023/24, have sold and moved. The remaining 46.7% have come off the market unsold.
STEP 1 – FINDING A BUYER
The first stage is to engage an estate agent (naturally, we’re here to assist) who will work with you to develop a pricing and marketing strategy tailored to attract the right buyer for your situation.
Recent data shows that over the last 3 months, a property here in Bath has taken an average of 55 days to reach an agreed sale STC. However, the bath market is far from uniform and each area in Bath has its own micro-market where it can be longer or shorter, remember this is an average.
On top of this, every ‘type’ of house also reflects different data. Let’s break it down.
(Bath centre plus a 3-mile radius).
Under £100k – 10 days
£100k to £200k – 62 days
£200k to £300k – 41 days
£300k to £400k – 65 days
£400k to £500k – 60 days
£500,000 to £1m – 53 days
over £1m – 76 days
STEP 2: INSTRUCTING SOLICITORS AND MORTGAGE BROKERS
Here at Reside Bath, we have our own list of recommended solicitors and mortgage brokers that we can get you in contact with. As the seller, your solicitor will begin preparing the legal documents for your property with your input and then forward this all to the buyers solicitor.
STEP 3: LEGAL WORK AND SURVEYS
After receiving the paperwork, your buyer’s solicitor will request local searches from the local authority and/or land registry to ensure there are no planned developments that could impact on your property. These searches can take a few weeks to complete as during this time the buyer’s solicitor may raise some questions with your solicitor. Simultaneously, a surveyor will inspect your property to confirm to the buyer that it is structurally sound and valued at the correct purchase price.
STEP 4: EXCHANGE OF THE CONTRACTS
Once the mortgage, the survey and the legal paperwork are all cleared and have come back without any issues, both the buyer and the seller can sign the contracts, leading to the ‘Exchange of Contracts’ between solicitors. At this stage, the buyer pays a non-refundable deposit, legally committing both parties to the sale. There is now one last step.
STEP 5: COMPLETION
Completion is when the money and keys are transferred. Typically, this takes place one or two weeks after the exchange of contracts, although, since the pandemic, there has been a shift to completion being on the same day as the exchange of contracts. At this point, the buyer’s solicitor sends the purchase funds to the seller’s solicitor. Once received, the keys are handed over and the sale is completed.
So to reiterate, here in Bath, it currently takes 55 days to get to the end of step 1 (finding a buyer) and a further 126 days from instruction of solicitors to completion (steps 2 to 5).
So, anticipate waiting 5 to 6 months from the point the property goes live on the market to the day that you move out. If you’re considering selling your home here in Bath, or a landlord looking for your next buy-to-let property, feel free to reach out to us.
Upcoming future legislation and the recent announcements in the autumn budget have stirred up some anxiety for the future of Buy-To-Let (BTL). The chancellor’s decision to increase the Stamp Duty Land Tax (SDLT) from 3% to 5% for landlords purchasing additional properties initially suggested a grim outlook for the buy-to-let sector. This move, coupled with the introduction of the Renter’s Rights Act, which proposes to abolish section 21 and effect a landlord database, poses new challenges for Bath Landlords but also opens doors to new opportunities. Despite these new hurdles approaching, looking in detail at market insights reveals reason for some optimism among property investors.
Taxation Changes: Assessing the Impact
The Tory and now Labour government policy changes towards the BTL sector aim to cool an overheating property market. Raising SDLT aims to redirect investment opportunities toward first-time homebuyers priced out of the market. Although this policy aims to level the playing field, it has raised concerns among investors about shrinking profit margins and thus the overall attractiveness of investment in the property market.
Despite these concerns, maintaining the current (lower) capital gains tax rates has provided a buffer, easing investor anxiety and stabilising the investment climate. However, many landlords remain cautious, aware that the stability of these rates can change as part of broader fiscal adjustments.
The Renters’ Rights Act: A New Standard
The proposed Renters’ Rights Act will abolish section 21 evictions, which allows landlords to terminate tenancies without fault. This change aims to offer greater security to tenants and ensure that there is fair treatment across the whole rental sector. Whilst this move is a positive one for renters’ rights, it does require landlords to adapt to more rigorous property management and dispute resolution strategies. This potentially increases the cost and complexity of property management.
In addition to this, the act will likely introduce stricter property standards and tenant engagement protocol. These regulations will compel landlords to improve the quality of their offering and engage more transparently and effectively with their tenants.
Market Resilience – Looking into the local market in Bath
Despite the challenges posed by increased taxation and regulatory changes, the Bath BTL market remains resilient. Demand for rentals continues to grow in the city. The average rent in Bath in 2024 was £1,759 PCM a 29% increase from 2019. Meanwhile, the number of rental properties on the market has dropped by 41.7% between 2024 and 2019.
One might say that’s all well and good, but what will this extra 2% stamp duty cost the average Bath landlord? The average price of a Bath buy-to-let property in 2024 is £345,400, meaning:
The average Bath landlord will only need to pay an additional £6,908, which is only 3.9 months’ rent.
Adapting for Success in Bath
To navigate this evolving landscape, landlords need to adopt new strategies to conquer a changing market.
Diversification: Landlords can spread risk and tap into different markets by creating portfolios that include a mix of residential types and target different demographics.
Reduction of Rent Arrears: A study by Denton House Research a couple of years ago showed that landlords who don’t use a letting agent to find them a tenant have a 272.5% greater chance of that tenant being two or more months in arrears.
Rent Protection: The removal of Section 21 will mean Bath landlords will only have Section 8 to remove tenants if they aren’t paying their rent or being antisocial. This could mean that if the tenant decides they don’t want to move, there could be a good 6 to 9 months of no rent (if not more). Therefore, you must take on rental insurance.
Final Thoughts for Bath Landlords:
While the initial outlook for buy-to-let investments in Bath might seem daunting due to recent legislative and fiscal changes, the underlying market dynamics suggest a different narrative. The demand for quality rental properties will likely continue to remain strong and provide opportunities for those willing to adapt to new changes.
The last decade has been a relentless barrage of new regulations and tax changes. From the 3% stamp duty surcharge introduced in 2016 to section 24’s limitation on mortgage interest relief, then the new renters rights act slowly passing through the government and its removal of section 21 eviction notices and finally recent reductions in capital gains tax allowances – it is fair to say that Buy-To-Let (BTL) investors have been under relentless pressure.
Now to add to this long list, the looming EPC regulation change, requiring properties to meet tougher energy performance standards, and the latest increase in stamp duty – raising its surcharge from 3% to 5%, there feels like another layer of financial burden on top of another, and it is no wonder that many landlords are feeling stretched to the limit and want to draw a line and sell up.
However, although these changes all seem daunting – let’s take a step back and evaluate the bigger picture.
For landlords with a long-term view, this extra cost is unlikely to fundamentally alter the financial viability of their investment. This one-off expense becomes ‘lost in time’ when spread out of the lifetime of an investment. Yes, it is a higher upfront cost, and as with any additional cost, it is not welcome. However, for most BTL investors, this increase won’t dramatically change the fundamentals. In fact, it’s like when the initial 3% surcharge was implemented in 2016; back then, very few landlords were deterred, and the market quickly adapted.
Another reason to stay positive is the remarkable growth in the rental sector seen over the last few years. In the last few years, rents have risen by 8-10% (Largely fueled by wage growth and continued supply/demand imbalance in the market) and are set to continue growing thanks to minimum wage rises, further bolstering the case for long-term BTL investment.
Furthermore, capital gains tax, though perceived as a deterrent, was reduced last year for higher-rate taxpayers, from 28% to 24% on residential property, which helps retain more of the gains made on property sales. Labour has made no change to that.
In real terms, UK house prices are now 15% cheaper than three years ago, another boost to the incentive to invest in BTL. So, ultimately, for savvy investors, now is potentially a more favourable time to secure a good deal for long-term gain. There will be a higher upfront cost that will have to be absorbed, but with a long-term vision, your investment can definitely be profitable.
While landlords are certainly facing pressures from the new EPC regulations in the coming years, history shows that when the government mandated the EPC rating to an “E” in 2018, it tempered the impact to avoid a market disruption with a maximum of £3,500 maximum spend to reach that level. We’ll likely see a similar approach this time if it risks an excessive withdrawal of rental properties from the market.
Ultimately, the buy-to-let market remains one of the few investment avenues where one can achieve both income and capital growth.
Bath landlords may need to consider this stamp duty increase when negotiating purchase prices, but for those with a long-term perspective, this is simply another bump in the road.
While change is inevitable, BTL still represents a sound investment – especially for those who are in it for the long haul.
Are you a homeowner in Bath? Perhaps you’re an individual or an investor planning on moving, buying or selling a property in the next six to twelve months, or maybe you’re on the lookout for your next home, perfect for the family, but not up against any time scale. Either way, having a clear understanding of the current state of the market here in the city of Bath is vital to making an informed decision and the right one for you or your family.
By reading our blog you can stay up to date on the latest market trends and activities which will help you plan effectively.
WHAT KIND OF PROPERTY MARKET DOES BATH HAVE RIGHT NOW?
One of the best ways to determine the current state of the market is to determine whether the market currently sits in a ‘buyers’, ‘sellers’, or balanced market. We can achieve this by looking at the ratio of properties marked as ‘sold STC’ or ‘under offer’ compared to the total number of properties available for sale.
For example, if 41 properties are marked as “Sold STC” out of 100 available, then the market is operating at 41%. This ratio isn’t just a random figure – it’s a reflection of the overall sentiment in the market.
Here is how the percentages breakdown to determine the market –
Extreme Buyer’s Market (0%-20%): Buyers hold all the cards.
Buyer’s Market (21%-29%): Buyers have the upper hand but not as strongly.
Balanced Market (30%-40%): A stable equilibrium between buyers and sellers.
Seller’s Market (41%-49%): Sellers begin to gain the upper hand.
Hot Seller’s Market (50%-59%): Strong competition among buyers.
Extreme Seller’s Market (60%+): Sellers dominate, with properties moving fast.
These benchmarks play a critical role, influencing everything from listing prices to negotiating leverage.
THE CURRENT SNAPSHOT OF THE BATH PROPERTY MARKET:
Oct-16 – 51%
Oct-17 – 44%
Oct-18 – 37%
Oct-19 – 38%
Oct-20 – 46%
Oct-21 – 65%
Oct-22 – 64%
Oct-23 – 50%
Oct-24 – 51%
As is expected, it was a stronger market for Bath sellers in the post-Covid years, yet things have settled down now to levels seen before the pandemic, this current percentage of 51% puts us just into a hot sellers’ market.
WHAT THIS MEANS FOR BATH SELLERS:
If you’re looking at selling your property in Bath, the current market conditions require more patience and flexibility than in 2021. The days of the stamp duty holiday and properties flying off the market within days are behind us and this means that sellers need to focus on their property marketing and prepare for longer periods on the market.
A crucial step in getting your property sold in this market is to make sure that the property is priced correctly. Now that supply is outstripping demand, it is crucial that you price your property correctly to attract demand and not deter potential buyers.
This month, 57% of properties that came to the market sold STC and to completion. The rest left the market unsold. Nationally there has also been a downward trend in the number of properties selling. This is likely due to the impending budget and potential buyers wanting to secure a lower mortgage rate if inflation continues to fall.
In light of these changes, your marketing approach should be one that is well thought out and gives your property the best chance of selling. Utilising digital tools such as virtual tours, video marketing and social media posts can give your property a competitive advantage, and help gain more serious buyers in a market where securing interest is becoming increasingly challenging.
In less competitive areas, buyers have more room to negotiate. You’ll likely find more flexibility on price and even some extras, such as fixtures, fittings, or other incentives thrown in by sellers eager to close a deal. The pressure to make quick decisions is reduced, allowing you more time to thoroughly consider your options.
It’s also worth remembering that most sellers are also buyers, so any loss you may experience on the sale side should be offset by a better deal on your next purchase.
External factors such as global economic trends, events, inflation, and interest rates will continue to influence the Bath property market in the coming months. Keeping an eye on these trends is essential for buyers and sellers alike.
Final Thoughts
As we enter November 2024, the Bath property market presents both opportunities and challenges for buyers and sellers. Understanding the subtle shifts in market dynamics is crucial for anyone planning a move, whether you’re a seasoned investor, a first-time buyer, or looking to relocate within the area.
Staying flexible, informed, and prepared will make all the difference in navigating this market. The experience of moving is as much about the journey as it is about reaching your destination.
It is an open secret that Bath’s younger generations are struggling to get themselves onto the property ladder. With the ever-increasing cost of living and stagnating wages, alongside stricter mortgage criteria, it is no wonder that fewer under 34s’ are becoming homeowners.
How bad is the situation? Is there any hope up on the horizon for young people to find a place to call home?
BATHS HOUSING CRISIS: THE STRUGGLES OF THE UNDER 34s.
According to statistics from the Bath and North East Somerset Council (BANES), there are 79,250 households in total. Of these, 1.8% are headed by individuals aged between 16-24, whilst 10.6% are between 25-34.
Compared with the 2.6% of all UK households that are made up of people aged between 16-24 and the 13.5% made up of people aged between 25-34.
Looking specifically at the 16-24 age bracket within Bath, the households can be broken down as follows:
Owned outright: 3.3%
Owned with a Mortgage: 14.6
Social Housing: 22.5%
Private Rented: 59.5%
Nationally, this compares owned outright 3.6%, 10.2% owned with a mortgage, 22.8% social housing, and private renting 63.5%.
Next, moving onto the 25-34 year old age bracket breakdown:
Owned outright: 3.8%
Owned with a Mortgage: 43.8%
Social Housing: 11.2%
Private Rented: 41.2%
Nationally, this compares owned outright at 4.1%, owned with a mortgage at 35.5%, social housing at 17.7% and private renting at 42.7%.
For a city like Bath, these numbers paint a bleak picture of property ownership in the younger generation. But why is this happening?
Well, the answer is multifaceted. It is not just an issue around the rising price of housing. Wages have not risen in line with inflation and with lenders becoming more conservative, the amount of deposit required to secure a mortgage is higher than ever before. For young people who are already grappling with student debt and rising rental costs, saving for a deposit is becoming an insurmountable task.
THE SHIFTING SANDS OF HOMEOWNERSHIP:
Yet, while the prospect of homeownership for the under-34s in Bath is slipping further out of reach, it is worth putting these figures into a wider context. Homeownership is not something that young people have done en masse, at least not in recent decades of the 2000’ and 2010’s.
While the Baby Boomer generation often bought homes in their early to mid-twenties back in the 70s and 80’s, the dynamics of homeownership have changed dramatically since then.
The average first-time buyer in 1980 was 26, now the average age has gone up to 31, and 34 in London.
In the 1980s, when the housing market was more accessible, people were more likely to buy a home at a younger age. However, as times have changed, so have social and economic conditions. The cost of housing has skyrocketed, whilst wages have not kept up at the same pace. Furthermore, younger people today are often burdened with additional expenses that weren’t as prevalent a few decades ago such as student debt loans and a cost-of-living crisis. This combination is making it much harder for younger people to save for a deposit and thus secure a mortgage offer.
Now, whilst this may sound doom and gloom for Bath’s younger generation, there is a silver lining if we look beyond the short term and consider the longer term market conditions. I countries like Germany, homeownership doesn’t typically happen until later in life. Germans tend to rent for longer (often well into their 30s or 40s) and then purchase a home later in life. When they do finally buy, they have more financial stability, and higher incomes and often make larger down payments. The result of this? Less debt and more security later in life.
This delayed homeownership is becoming more common in the UK, and Bath is no exception. What we may be seeing is not a permanent decline in young homeowners, but a shift in the timing that people buy. Instead of purchasing homes in their 20s, more people are waiting till their mid-30s or even early 40s to buy, when they have some more financial stability.
THE HIDDEN £28bn BATH AND NORTH EAST SOMERSET EQUITY:
One key factor we cannot ignore is the £28bn worth of equity tied up in the homes of the 50+ years old generations in the BANES area.
Many older residents, who bought homes decades ago when property prices were affordable, are now sitting on this substantial equity. As these homeowners begin to downsize or pass down their properties to their children and relatives, we may yet see a significant transfer of wealth to the younger generations. This could provide a lifeline for many would-be homeowners who are currently priced out of the market.
In Bath, where family connections are strong, and homeownership is passed down through generations, this transfer of wealth is likely to have a profound impact on the housing market in the coming years. Many younger people will likely find themselves with the capital to afford a downpayment on a home or be able to inherit the estate their parents currently reside in.
WHAT DOES THIS ALL MEAN FOR THE FUTURE OF BATH HOMEOWNERSHIP:
The future is not all doom and gloom. Yes, the current statistics suggest that homeownership is out of reach for the majority of under 34s, but this is not a permanent trend. There are several reasons to be optimistic about the future. Firstly, as more young people prioritise their savings and look for ways to access the property ladder, we could see a shift in homeownership rates among the under 34s. Previous schemes such as Help to Buy and shared ownership can also provide much-needed assistance for young people to get onto the property ladder.
Secondly, the aforementioned generational wealth transfer will hopefully provide younger people more opportunities to purchase homes, either through direct inheritance or financial gifts. Regardless, the generational shift will most likely play a significant role in shifting the current market trends.
There is absolutely no denying that the current market conditions are making it incredibly tough for young people to get onto the property ladder, but for those willing to plan and save strategically with the right help and support, many young people across the UK and Bath will find that they can, in fact, become homeowners.
It is clear the property market in Bath is changing and will continue to do so. Young people may not be buying homes at the rate they used to, but by staying informed, seeking the right opportunities and staying patient, you will be able to afford your first home.
The situation is far from hopeless, Baths future homeowners are out there, they’re just waiting a little longer to step onto the ladder.
On Wednesday, Parliament had the first hearing of the Renters’ Rights Bill, the revision by Labour of the previous government’s Renters Reform Act. There was a lot of information given during the hearing so let’s take a moment to take a look at what this could mean for your investments in the future.
Let’s begin by reassuring you that nothing groundbreaking was heard in these proposals that will catch you off guard. Most of what was heard was already in the previous bill by the Conservative government. Regardless, let’s break down what was involved and what might affect you as a Bath Landlord going into the future.
THE END OF SECTION 21 (‘NO FAULT’) EVICTIONS:
The big headline in the news outlets was the abolition of Section 21 evictions. For years now, landlords have been able to issue a section 21 notice, which gives tenants two months to leave the property through no fault of their own. Many have viewed this as unfair, particularly when they have been used to displace tenants who challenge landlords’ provision of poor living conditions or challenge rental increases they deem unfair.
Landlords won’t be without power. You will still be able to evict tenants who break rules under Section 8 of the Housing Act. This will cover situations such as failure to pay rent, damage to the property, and antisocial behaviour. The main difference here between a section 21 and a section 8, is that the latter requires a court order. The concern here is that in recent years these court orders have faced significant delays. However, the government has assured us that they will work to clear the backlog and streamline the process.
RENT INCREASES AND BIDDING WARS:
Another important point heard on Wednesday’s hearing was the ban coming in on bidding wars. Over recent years, some cities have seen an influx in rental bidding wars. This has been caused by over-demand and under-supply, which has then led to two people trying to offer more than the other over the asking rate of rent and leading to ‘a bidding war’. This new piece of legislation will make it illegal to ask or accept any offers from potential tenants over the advertised rent. This may stabilise the market, but it is something to keep in mind when setting rent prices for your Bath rental property.
In addition, in-tenancy rental increases will be limited to once a year and will no longer be allowed during the period of the fixed term of a tenancy. Whilst this ban may seem restrictive, it does provide a sense of stability for tenants and in turn may encourage longer-term lets.
ENERGY EFFICIENCY AND PROPERTY STANDARDS FOR BATH LANDLORDS:
This proposed act introduces a stricter regulation on the quality and energy efficiency of rental properties. By 2030, landlords will need to ensure that their properties are given an Energy Performance Certificate (EPC) rating of C or above. (For more information about EPC Certificates see this article: How will the new EPC rules affect Landlords? (residebath.co.uk)). This is a long-term requirement, so although it may require investment at first, there is plenty of time to plan these changes, check the regulations, and plan accordingly.
The introduction of the Decent Homes Standard into the private rental sector means that Bath Landlords will also need to ensure their properties and maintained to a certain standard. This will particularly look at hazards such as dampness and mould, a common issue among Bath properties in particular. It is a move that is aimed at improving the overall quality of rental accommodation and whilst it may mean more responsibility for more landlords across the city, most landlords will already be meeting these standards.
GOING FORWARD:
If any one of these proposed changes is causing any concern then do not hesitate to get in touch with our team, we would be happy to help you understand these changes further. Being a team in Bath affiliated closely with the governing body, Propertymark, we are continuing our professional development and are constantly keeping up to date with the latest changes. Do also keep an eye on this blog page which is continually updated with all the latest news in the property industry here in Bath and beyond.
The rental property market is on the verge of a significant shift, one that will undoubtedly cause concern among landlords across the United Kingdom. The new labour government has made clear its intention to raise the minimum energy performance standards for rental properties, a move that could have far-reaching implications for both landlords and tenants alike.
The proposed change would see the minimum Energy Performance Certificate (EPC) increase from E to C by 2023 and has sparked a mix of uncertainty and anxiety within the rental property sector.
The new regulations are a part of Labour’s wider commitment to combat climate change and enhance the energy efficiency of the UK’s rental homes. This is also a bid to reduce tenant bills given the current energy crisis and cost of living crisis.
The previous conservative government introduced EPC regulations for private rental properties in 2018. This was a part of the broader effort of the previous government to improve the Energy Performance of the UK’s housing stock. Under these regulations, landlords were required to make sure their properties met this minimum standard EPC rating of E, before they were allowed to be placed on the rental market. To support landlords in doing this, exemptions were allowed, and a cost cap was introduced to limit the amount landlords were required to spend on their properties to improve their EPC.
This cap was implemented to reduce the strain on landlords financially, particualry those with older properties. The £3,500 cap covered a range of potential improvements, including insulation, heating system upgrades, and draught-proofing, and was seen as a balanced approach that allowed landlords to comply with the new standards without facing prohibitive costs.
THE SCALE OF THE CHALLENGE FOR BATH LANDLORDS:
The implications of these changes are likely to be profound. Some Bath landlords may decide that the cost of upgrading is simply too high and choose to sell their Bath properties instead. This exodus from the rental sector could exacerbate the current shortage of housing for tenants and hence drive up rents, and make it even more difficult for tenants to find affordable rental homes.
There is also the risk that the increased financial burden on landlords would be passed onto the the tentants in the form of higher rent increases. While the goal of improving the EPC of these homes is to reduce the overall living costs of tenants by lowering their energy bills, this benefit could be offset by the landlords raising their rents to recoup the associated costs.
DOES AGE, TENURE AND TYPE OF HOME MAKE A DIFFERENCE TO THE EPC RATING?:
The EPC scores associated with each band are as follows:
Band A – 92 plus (most efficient)
Band B – 81 to 91
Band C – 69 to 80
Band D – 55 to 68
Band E – 39 to 54
Band F – 21 to 38
Band G – 1 to 20 (least efficient)
Looking at only the property type, it certainly affects energy efficiency. Overall, flats and maisonettes are the most ‘energy-efficient’ property type in the UK with a median efficiency score of 73, so a Band C EPC. Detached and terraced properties came in second with a median score of 66 equating to a Band D EPC, and finally in last place was semi-detached houses with a median score of 65, so also a Band D.
Detached homes tend to be more modern and as such, should be expected to have a higher energy rating. There are three external walls exposed in semi-detached houses, which would make you think they would have an overall better average EPC. However, the average age of UK semi-detached homes is older than detached homes and this is where efficiency is lost.
Finally, the terraced home normally only has two external walls, so should be better than semis and detached homes. Yet, terraced homes have solid walls, which make them perform not as well as cavity walls. Finally, flats and maisonettes, are more likely to be more modern and grouped in blocks, making them more efficient.
Breaking down each type into its three tenures of owner-occupiers, private renting and social renting…
Detached properties exhibit relatively similar energy efficiency ratings across all tenures, with owner-occupied homes scoring an average of 64, slightly higher than the private rented sector at 62, with social rented properties at 66. This suggests that while there is a marginal variation, socially rented detached homes tend to be more energy efficient on average.
Semi-detached homes show uniformity in energy efficiency for owner-occupied and private rented properties, both with an average rating of 63. Social rented semi-detached homes, however, are somewhat more efficient, with an average rating of 68. This may reflect better insulation or energy-saving measures in the social housing sector.
Terraced properties reveal a small increase in energy efficiency as we move from owner-occupied (63) to private rented (64) and then to social rented (69). This trend indicates that terraced homes in the social rented sector might benefit from recent energy efficiency upgrades or more rigorous building standards.
Finally, flats and maisonettes demonstrate the highest energy efficiency ratings across all property types, with owner-occupied and socially rented homes both scoring 72, and privately rented properties closely following at 70. The higher ratings in this category could be due to the structural benefits of multi-unit buildings, such as shared walls that reduce heat loss.
In summary, while there are differences in energy efficiency across different property types and tenures, social rented properties generally exhibit higher energy efficiency ratings, particularly in the semi-detached and terraced categories. This may reflect concerted efforts within the social housing sector to improve energy efficiency, possibly driven by policy initiatives and funding targeted at reducing fuel poverty.
AGE:
Finally, let us look at the age of properties and if there is any correlation between age and energy performance rating.
The age of a home is a key determinant of its energy efficiency, largely due to advancements in construction techniques and building regulations over time. Properties built from 2012 onwards tend to have the highest EPC ratings, with a median score of 84 (Band B). Homes constructed between 1983 and 2011 also perform relatively well, with a median score of 72 (Band C).
Moving on to older properties – looking particularly at those built between 1930 and 1982, these have a lower median energy performance rating of 65, equating to an EPC rating of Band D. The least efficient homes are those built pre-1930 which have a median score of 59, ranking them with an average EPC of Band D also.
THE LOCAL BATH PICTURE:
38.36% of the UK privately rented homes are in the proposed minimum EPC standards of A to C. Locally in the South-West, there was an average of 40.63% of homes falling between those marks.
Nationally, 59.46% of private rented homes are in the D and E bands of the EPC rating system and locally again in the south-west, there are 56.46% of private rented homes in this category.
In other words, over 50% of privately rented properties in Bath are within the EPC bands D to E which would mean under these proposed changes they would need to be improved. To visualise this better, there is a heat map below of the homes that would fail the testing under the proposed new law.
BATH LANDLORDS NAVIGATING THE UPCOMING UNCERTAINTY:
In the face of this wave of new challenges, landlords in Bath must adopt a pragmatic approach. While the initial reaction may be one of concern, it is important to consider the long-term benefits of making these energy improvements to your investment properties. Properties with higher EPC ratings are more attractive to tenants, alongside this they also tend to yield higher market value. By investing in upgrades to your investment property, you can not only comply with the new regulations afoot but also enhance the value of your property on the market.
Moreover, there may be an opportunity to mitigate the costs. The government has yet to finalise the details of the new regulations and there is hope that they will introduce measures to support landlords through this transition to more energy-efficient homes. There may be grants, loans or tax incentives available to those who make the improvements and thus offset some of the cost.
Bath landlords should also consider the timing of their investments. While 2030 may seem distant, the scale of work required means starting early could be beneficial. Properties that are upgraded sooner rather than later will be in a better position to attract and retain tenants, particularly as energy efficiency becomes an increasingly important consideration for renters. Furthermore, by acting now, landlords can avoid the rush and potential price increases that are likely to occur as the deadline approaches.
It is also worth considering the broader societal benefits of these changes. Improving the energy efficiency of rental properties is not just about meeting government regulations; it is about contributing to the fight against climate change and helping to reduce the country’s overall carbon footprint. This is something that both Bath landlords and tenants can take pride in, and it aligns with the growing demand for more sustainable living options.
Again, the improvements made to properties will not only benefit current Bath tenants but also increase the long-term viability of the rental market. As properties become more energy-efficient, they will be better equipped to withstand future changes in energy prices and regulations. This future-proofs investments and ensures that landlords can continue to offer quality housing in a competitive market.
FINAL THOUGHTS: A STRATEGIC APPROACH FOR BATH LANDLORDS:
In conclusion, while the proposed changes to EPC requirements may initially seem daunting, they should be viewed as an opportunity rather than a threat. By taking a proactive and strategic approach, Bath landlords can not only meet the new standards but also enhance the value and appeal of their properties. This will not only benefit their portfolios but also contribute to a more sustainable and resilient local rental market.
The key is to start planning now, seek out advice from Letting and Estate Agents such as ourselves or many of the other agents located in Bath, and consider the long-term benefits of these changes. The road ahead may be challenging, but with careful planning and a commitment to improving the quality of rental housing, Bath landlords can navigate this transition successfully.
As leaders in the local property market, feel free to contact us to discuss what has been said in the article as it is everyone’s responsibility to not only meet these new standards but to embrace the positive changes they bring.
