Property World Updates - January 2026
Happy New Year!
Welcome back to my blog on the wonderful world of property.
It’s been a while since I last did one of these market update so read on to catch up on what’s been happening - there’s a fair amount of news…
Given my legal background, it’s probably no surprise where I’m starting this update - with what is now officially the Renters’ Rights Act 2025. King Charles has given it his royal approval and it will finally come into force from this May.
Some key changes from 1 May 2026 include:
The abolition of ‘no-fault’ (s.21) evictions, meaning only specific legal grounds can be relied upon by landlords to regain possession, such as significant rental arrears.
All tenancies to be open-ended (assured periodic tenancies) rather than have a fixed-term period (assured shorthold tenancies).
Rent increases to be limited to once a year and with two months’ notice.
A ban on rental bidding wars, meaning landlords will no longer be able to accept rent higher than as advertised or chunks of rent in advance.
It will be illegal for landlords to discriminate against prospective tenants who receive benefits or have children. Tenants who have pets must also be considered, rather than ruled out completely.
Beyond 2026, a Private Rented Sector database and a Landlord Ombudsman will be arriving with the aim of improving transparency and dispute resolution in the sector.
Further down the line (likely from 2030), higher property standards will be introduced, including a ‘Decent Homes' Standard’.
Personally, I think the changes are generally a good thing and should help to drive less professional landlords out of the market, leading to better standards in the sector.
However, the abolition of no-fault convictions is a concern. Whilst I agree with the sentiment, landlords have often used these evictions as a more effective eviction route when a tenant was in arrears or had consistently paid their rent late.
Historically, evicting under s.8 due to rental arrears has been a real challenge as a tenant can clear just enough of their arrears (not even all of them) on the day of the hearing and the grounds for eviction disappear, leading to wasted time and costs. Improvements are promised to the court system to help with this but I’m not convinced this will help…if it ever materialises. Perhaps that’s just the cynical lawyer in me but I spend enough time dealing with the courts to know that radical change is very unlikely to be arriving in a hurry!
Elsewhere, the Government has once again delayed changes to minimum EPC requirements for privately rented homes.
Previously, landlords had until 2028 to get a ‘C’ or above on their properties but that’s now been extended to 2030. The current minimum requirement of an ‘E’ or above remains for the time being.
Again, I have mixed feelings about this. I feel passionately that we should all be doing what we can to maximise energy efficiency so a minimum standard is definitely a good thing.
However, it’s widely known that the current EPC scoring system is flawed and does not accurately measure how properties impact the environment. For example, a property with a super-efficient infrared heating system supplied by renewable energy will currently score a lot lower than a less efficient traditional gas powered central heating system. I’ve found this really frustrating when creating new units recently as I was forced to compensate in other areas, which comes at a significant premium, just to improve arbitrary scoring on the EPC record.
With that said, a ‘fully overhauled’ EPC scoring system is promised by late 2026. Hopefully this will help the scheme to serve its intended purpose and improve efficiency standards.
If it does, I would expect grants to be available for landlords. Currently, 340,000 properties will need to improve to meet the minimum ‘C’ rating by 2030, with 38% estimated to need up to £10,000 worth of works. Without assistance from the Government I suspect this would trigger many landlords to sell up and leave the market, resulting in a decrease of available rental properties and an increase in rents.
Turning to the property market, and it was a solid 2025 according to Hometrack data:
Housing sales hit 1.2m in 2025 – the highest level for three years.
The average UK house price increased by 1.2% over 2025, down from the 1.9% increase recorded over 2024.
Our very own Liverpool was the highest performing city in England for house price growth in December 2025, up 4.2% compared to December 2024. The North-West was the best performing region generally with an increase of 3.5%.
As we begin 2026, available housing stock is up by 6% compared to January 2025 and buyer demand is reportedly down by 9%. However, it’s worth remembering, that 12 months ago, buyers were racing the beat the stamp duty increase deadline so that was not the typical start to the year. Nonetheless, it seems reasonable to expect an unspectacular performance on house prices in January 2026 when the data is available, given supply will seemingly exceed demand.
Private rents continue to rise steadily, with ONS reporting an increase of 4% across the UK in the 12 months to December 2025. The average monthly rent is now £1,368. The average rent in Liverpool is now £881 - a 7.5% rise from 12 months ago. As the graph above shows, this growth has decreased since the post-pandemic peak but is still well ahead of the national average.
The mortgage market is looking gradually more promising as we start 2026 with major lenders cutting headline mortgage deals. Two-year and five-year fixed rates have moved back below 5% on most products — the lowest levels since before 2022. Additionally, I’ve been seeing product fees cut across the board, lowering the total loan costs. This has followed the Bank of England cutting the base interest rate to 3.75% in late 2025, although it’s worth bearing in mind that lenders usually predict this and factor changes in gradually, rather than reacting immediately.
That’s all for now. I’ll be back next month with some updates on my own property work. Have a great month in the meantime and thanks for reading.
John