Property Management London 2025

We look at what’s on the horizon in the Capital for the New Year

As we move into 2025 there is a cautiously positive outlook. Nothing too dramatic, but a period of stability is welcome after half a decade of unpredictability.

We have been buffeted by a continual stream of hits – political, economic and financial – that have ensured that rental property owners have had to be on their toes. There has been little room for luxuriating or banking on what once looked like very comfortable returns. Instead, success has become dependent on smart tactics and resilience.

On the plus side

Residential rental property continues to be solidly in demand in London, so the landscape is fundamentally robust. Mortgage rates have stabilised and are expected to remain so within a range of 3 – 4%. Experts forecast a moderate annual increase in London rental prices averaging 3.5%. All signs are reasonably good and provide some assurance for a better year than last year.

Residential landlords’ outlook

It feels like landlords have been attacked from all sides in the last few years compounded most recently by the latest Renter’s Rights Reform bill. It’s enough to frighten even the most stalwart of property owners yet there are still good opportunities in the marketplace after the inevitable shake down. As Knight Frank has stated in their 2025 forecast:

Possibly the greatest challenge for Landlords moving forward is navigating industry regulations. When projecting for the future, or purchasing further investments, it is really important now to factor in:

• Maintenance requirements and the need for healthy, safe and well-kept homes. Cutting corners is no longer an option so ample consideration needs to be given to the quality of property bought and what it will take to retain it in good condition for the term of ownership.
• Sustainability. As per the above, there are now stringent guidelines for a raft of requirements that Landlords must observe. EPC standards, insulation, renewable energy sources and smart metering are just some of the key points. One example:
  Landlords must ensure that their properties have a valid EPC rating of E or better, or have a valid exemption registered. The minimum required rating is expected to be grade “B” by 2030.
• Rules & Regs abound. There is no doubt that landlords must stay abreast of more legislation than ever before. There are changes pending in 2025 that will target rental terms: the abolishment of Section 21 ‘no-fault’ evictions and the end of fixed-term tenancies, to name two.

As a landlord, the best approach is to have a good strategy for managing your portfolio. A long-term vision, a workable maintenance plan, ‘fair’ rental and maintenance charges, a good dialogue with your tenants, and a commitment to following the changing legal requirements to stay on the right side of the law whilst keeping your properties in good shape. It can seem like an overwhelming amount to manage, but it is possible.

Commercial property view

Meanwhile on the business end of the rental market, this area is still morphing 5 years on from the start of the pandemic. Working from home is falling out of fashion in favour of a return to a physical office base and better integration of the workforce. A hybrid model is preferred by employees, but statistics show a decrease in productivity when working from home that most businesses can no longer afford to overlook. With this in mind, there is a continual flow of changes occurring in the commercial property rental sector.

On the one hand there is demand for,

“

the enduring appeal of central London offices, which benefit from liquidity and stability and continue to draw in businesses needing a well-connected hub for their workforce.”