If 2024 felt like a pressure cooker for landlords, 2025 is shaping up to be a year of recalibration.

From a spiralling possession crisis to an evolving legal framework and high mortgage rates, landlords have faced unprecedented challenges. Yet, amidst the turbulence, there’s a silver lining: opportunities for those who adapt, evolve, and stay the course. It makes more sense than ever to take out rent guarantee insurance to cover for loss of rent and legal fees. More landlords will naturally ask tenants for a guarantor when signing up tenants – ask for a homeowner or use companies such as Rent Guarantor. Minimising risk is a no brainer.

Let me explain why staying in the game can still be the best decision landlords make next year.

1. The future of eviction

Let’s address the elephant in the room: the possession crisis. With County Court bailiff shortages and delays stretching into mid-2025, frustration is rife. Yet, solutions exist for landlords willing to explore alternatives. High Court (HC) enforcement may involve additional costs, but for many landlords, it has proven to be a faster, more efficient route to regaining possession. 

While the abolition of Section 21 evictions, a long-anticipated change that has loomed over the sector for more than five years, may feel like a significant blow, the upcoming Renters’ Rights Bill will introduce clear grounds for possession under Section 8. With careful documentation and expert legal guidance, landlords can protect their rights and successfully reclaim properties when necessary.  The key takeaway? Stay proactive. Don’t wait for arrears to spiral. Engage with legal experts early to explore all options, including HC enforcement, and maintain open communication with tenants to resolve disputes before they escalate.

2. Resilience in a tough mortgage market

The mortgage market has been another area of pain. High interest rates have squeezed profitability, particularly for those with variable or expiring fixed-rate mortgages. While it’s easy to see this as a deterrent, it’s worth remembering that the private rented sector (PRS) has weathered economic storms before and we have seen some relief through a couple of rate cuts. 

Higher yields, driven by a constrained housing supply, are offsetting some of these increased costs. According to Paragon Bank, average buy-to-let yields hit 6.72% in late 2024 – a level not seen for years. Landlords willing to adjust their portfolios, target high-demand areas, or explore remortgaging options may find their investments remain profitable.

If you’re navigating rising mortgage costs, consider working with a specialist broker to assess options for refinancing. The effort you invest now will pay dividends as the market stabilises.

3. Legal changes: A chance to professionalise

The shift toward periodic tenancies under the new legal framework may feel like a challenge at first, but it also offers an opportunity to foster longer-term stability in your rental income. It could be argued that tenants who feel secure in their homes are more likely to stay for extended periods and care for the property as if it were their own. This creates a win-win situation: reduced turnover for landlords and better-maintained properties in the long run.

Of course, landlords need to also make sure they protect themselves so to adapt to these changes, consider refining your approach to tenant assessments. Taking the time to thoroughly evaluate potential tenants – including their rental history, financial stability, and suitability for your property – will pay off in smoother, longer-term tenancies. Partnering with a professional letting agent can further assist this process, ensuring you find tenants aligned with your expectations and priorities.

These proactive steps, coupled with a willingness to embrace regulatory updates, can position landlords as professional, trusted housing providers. By modernising your practices and fostering tenant satisfaction, you’re not only complying with the law but also building a reputation that attracts high-quality tenants and long-term rental stability.

4. Fewer landlords, more opportunity

With tax burdens, rising costs, and regulatory changes driving some landlords out of the market, rental demand is growing faster than supply. For those who stay, this presents a unique opportunity to maximise returns.

Fewer competitors mean higher yields and greater tenant demand for well-managed properties. As affordability remains a challenge for buyers, the private rented sector continues to play a vital role in housing the nation. The landlords who adapt and focus on providing quality homes will be in the best position to succeed.

5. Shaping the future of the private rented sector

Landlords have often been cast as villains in the housing debate, but the reality is far more nuanced. Landlords provide an essential service in a housing market that desperately needs supply. Now is the time to push back against outdated narratives and advocate for fair treatment.

Join landlord associations, attend forums, and engage in discussions about upcoming legislation. By working together and educating themselves on changes, landlords can still help influence policies that balance tenant protections with landlord rights, ensuring a sustainable future for the private rented sector.

The case for staying the course

There’s no doubt that 2025 will bring its share of challenges (we’re used to it), but with those challenges come opportunities. Rising yields, ongoing tenant demand, and a chance to modernise your approach all point to a brighter future for professional landlords who embrace change.

Staying in the game requires resilience, adaptability, and a willingness to engage with the evolving landscape. Whether it’s navigating legal reforms, managing rising costs, or advocating for landlord rights, those who rise to the occasion will be well-positioned to reap the rewards.

At Landlord Action, we’re here to help. Whether you need support navigating possession delays, understanding new regulations, or making the most of your portfolio, we’re committed to empowering landlords to ‘thrive in ’25… and beyond.

Paul Shamplina is founder of Landlord Action