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Last week we saw a headline that would have seemed pretty unthinkable just a few weeks ago: the UK government recorded its largest ever monthly budget surplus in January 2026, at £30.4 billion.
That’s the highest since records began in 1993.
Chancellor Rachel Reeves has been quick to present these figures as evidence of fiscal discipline taking hold. A success!
But much as we welcome genuine good news, before we get too carried away, we think it's worth looking more carefully at what is actually driving these numbers. Why? Because, when you examine the detail, a picture emerges: a significant portion of today’s record surplus has been built on the backs of property owners, home buyers, and the families of people who have spent decades building wealth through bricks and mortar.
Three particular property-relevant taxes tell much of the story – and all three therefore have a direct impact on the people we help buy and sell properties in and around Oxford – day in, day out.
Capital Gains Tax: A Headline in Need of Context
One number that has dominated the headlines is the Capital Gains Tax (CGT) taken in January 2026: around £17 billion. It sounds a lot – and it is – but when we see huge numbers like this we can easily shrug them off, for lack of context.
So, here’s some context: £17 billion is an increase of 69% on the same month last year. It is, as one analyst described it, “eye-popping”.
That said, if your first instinct is to picture this as evidence of a surge in second-home and buy-to-let sales – indicative of the landlord exodus, perhaps – there is yet more context to consider.
First of all, though, you would not be alone if that was what crossed your mind. CGT is a tax closely associated with property sales in the public imagination, and the rate rises announced in the October 2024 Budget (2024, not 2025), from 10% and 20% to 18% and 24%, certainly prompted many landlords and second property owners to consider their positions.
Nevertheless, the January figure is not primarily a property-related statistic.
CGT on residential property is generally (but not entirely) collected on a rolling basis throughout the year, because most sellers should report and pay within 60 days of completion. The January surge, by contrast, reflects receipts taken due to the self-assessment payment deadline of January 31 each year – the point at which CGT owed on shares, investment portfolios, and business assets from the entire tax year lands.
Much of this is likely to relate to asset sales as investors rushed to crystallise gains before a tax rise kicked in.
The genuine CGT story for property sales is nevertheless significant, however – it is just that, as yet, we don’t know what the full story will be.
We have indications, though.
HMRC data shows that in the 2024/25 tax year, 163,000 taxpayers filed a CGT on UK Property return, reporting 183,000 disposals with a total CGT liability of £2.2 billion.
Those were record figures, a year ago: the number of disposals was up 28% on the previous year, and the CGT liability itself rose 33%. But despite that record, it is likely we are watching it being broken again in real time.
The cumulative CGT already collected through the 60-day reporting mechanism between April 2025 and January 2026 stands at around £1.8 billion, with two months of the tax year still to run and be recorded. However, on top of what has been reported in rolling 60-day-from-completion payments, there will be additional property CGT still to arrive via self-assessment returns – there always is.
For these reasons, the 2025/26 figure will almost certainly exceed £2.2 billion when the final numbers are reported.
For the property market, the consequences are real and ongoing, and these CGT receipts are evidence of that. Landlords and second-home owners who might otherwise have continued to hold are being prompted to sell. That has direct implications for rental supply.
Higher tax receipts, yes, that does sound like good news; but at what cost?
Stamp Duty Land Tax: A Threshold Frozen in Time
The second property-related contributor to January's record surplus is SDLT. Homebuyers paid £899 million in stamp duty in January alone – a 6% increase on January 2025 – whilst across the full year, SDLT receipts reached £15.4 billion, up 18% on the £13 billion received the year before.
Now, we have to note that SDLT typically gets paid within 14 days of a sale completing, and hence – from those numbers above – we can see that it is very much a tax which sees receipts spread through the year.
That said, £899 million paid in one single month, and that being 6% up on the same time last year, is clearly still significant, and worth our time to take a deeper look at.
Partly, this increase in SDLT receipts is down to increased numbers of property sales. But that isn’t the full story.
Rather than signalling a large increase in transaction numbers alone, much of the increase actually stems from the reduction in the nil-rate band from £250,000 back to £125,000, which brought a wider range of transactions back into scope.
On top of this, first-time buyer nil-rate thresholds dropped from £425,000 to £300,000.
Let’s also remember that there is a deeper, more structural issue around Stamp Duty. Arbitrary as it might be, let’s pick a moment in time – say, the moment that the £125,000 threshold was introduced, back in December 2014.
The average UK property price then was £176,561. By December 2025, average sold prices had reached £270,259 – an increase of more than £93,000 on average. Here in Oxford, of course, things scale up significantly, based on our local averages: today, the Oxford average property sale prices, according to Dataloft, are £354,433 for flats and £597,594 for houses – and a combined average of £526,457. All of these averages are well above the lower stamp duty threshold and even the first-time buyer threshold.
In other words, buyers are not paying greater stamp duty not because they are purchasing larger or more valuable homes in any meaningful sense, but simply because prices have risen around them whilst SDLT thresholds have remained broadly the same – bar any temporary breaks or holidays, of which there have been a couple.
Calls for reform are growing. Coventry Building Society's analysis of the HMRC data prompted its head of intermediary relationships to describe the current threshold as one that "might have made sense in 2014, but house prices have moved on dramatically since then." (Did I say picking a 2014 date was arbitrary, earlier? Don’t you believe it.)
It is hard to disagree. Whether reform comes from the current government or forms part of the opposition's emerging platform, the case for updating thresholds to reflect today's market is becoming difficult to argue against.
Inheritance Tax: A Stealthy Expansion
The third strand of this story is perhaps the least visible, but it might be the most consequential for ordinary families. Inheritance Tax (IHT) receipts between April 2025 and January 2026 totalled £7.1 billion. That is up by £100 million on the same period last year. The Office for Budget Responsibility forecasts a full-year take of £9.1 billion, and this is a target the government is on course to meet.
Frozen nil-rate bands are doing much of the work here. As property values in parts of the country outside London and the South East have seen double-digit annual increases in recent years, families in the South West, the Midlands, and the North are finding themselves drawn into an IHT net that many would have thought well beyond anything they would have to concern themselves with, a few years ago.
In many cases, families find themselves drifting into an IHT liability without realising it.
The family home, often the single largest asset most people will ever own, is increasingly the mechanism through which IHT liability is generated – and we are seeing this play out in these record surplus tax receipts.
It is worth noting, too, that, under current proposals, from April 2027 pension assets will be brought within the scope of IHT – albeit this is still subject to legislation before it passes.
If it does transpire, it will mark a change that will further increase exposure for families who have done what successive governments told them to do and saved prudently.
Nevertheless, on this particular issue, it really is the property dimension which remains central.
A Surplus Built by Standing Still
Taken together, these three revenue streams paint a picture of a tax surplus that is, to a meaningful degree, a surplus shaped by property taxes – even if not entirely so, which of course it is not. Not in the month of January, which is the single month most bolstered by self-assessment tax settlements, bringing in revenues from self-employed income and the sales of non-property assets.
As always, when we bring ourselves to scratch beneath the surface of property taxes, it raises legitimate questions about sustainability.
The CGT surge, as we have noted, is likely a matter of timing and recording mechanism, rather than representative of a structural increase, and as it goes – whilst it has grabbed the headlines in the last week – it is probably the tax with less of a property-related contribution than the other two mentioned. That said, we can clearly see the property-relevant CGT element is significant, and that it is growing year on year.
More markedly, SDLT revenues are rising because thresholds have not kept pace with price rises, not because the market is fundamentally more active. In a similar way, IHT is creeping outward as frozen allowance thresholds get pipped by rising asset values.
At Cherry Picked Residential, we are not here to make political arguments. But we do believe that our clients – our sellers and landlords, homeowners planning for the future, and of course any buyers and future buyers we come to deal with – deserve to understand what is driving these numbers and what they mean in practice.
The record surplus is real, and there are ways in which this will spell good news for us all.
But there are questions worth asking too, particularly as the Spring Statement approaches on 3 March: is the tax architecture that produced this surplus fair? Is it sustainable? And is it fit for the property market as it actually exists today?
We'd be glad to hear your thoughts.
Q&A on the Record Tax Surplus and what it means for Homeowners in Oxford
Why did the UK run a record budget surplus in January 2026?
The UK’s £30.4 billion January 2026 surplus was mainly driven by self-assessment tax return payments, which featured higher tax receipts from capital gains tax (CGT) on financial assets. Nevertheless, CGT on property sales, as well as stamp duty land tax (SDLT) and inheritance tax (IHT) have contributed in January, from sales made in November, December and January, and IHT on deaths during the past six months.
How did Capital Gains Tax contribute to the surplus?
Capital Gains Tax receipts hit around £17 billion in January 2026, almost 70% higher than in the same month a year earlier. A large part of that came from investors crystallising gains on shares, portfolios and business assets before higher CGT rates took effect, but there is also a growing property element as more landlords and second‑home owners choose to sell rather than hold on.
Is the January CGT spike mainly about property sales?
No – the January spike is primarily about self‑assessment payments on gains made across the whole tax year, especially on financial assets. Property‑related CGT is usually paid on a rolling basis within 60 days of completion, so its receipts are more spread out, but as more landlords and second‑home owners exit, property is still playing a bigger supporting role than in the past.
Why are Stamp Duty receipts rising?
Stamp Duty receipts have risen because thresholds have moved against buyers, rather than because people are buying larger or more expensive homes. With the main nil‑rate band cut back to £125,000 and the first‑time buyer threshold reduced, more of each transaction is now caught by SDLT at today’s prices, especially in areas where values have marched on while bands have stood still.
How does frozen Stamp Duty policy affect buyers in Oxford?
In higher‑value parts of the country like Oxford, average prices are now far above the main SDLT thresholds, so many “ordinary” moves attract large up‑front tax bills. That makes it harder for growing families and upsizers to move, and slows the flow of properties through the market, even when people’s housing needs have changed.
Why are more families being pulled into Inheritance Tax?
More families are finding themselves within the scope of Inheritance Tax because the main allowances have been frozen while property values have risen year after year. As house prices outside London and the South East catch up, and as more of a family’s overall wealth is tied up in their home, it becomes easier for an estate to tip over the threshold without anyone feeling especially “wealthy”.
What role does property play in Inheritance Tax exposure?
For most people, their home is the single largest asset they own, so it often makes the difference between an estate being below or above the IHT threshold. As values have increased but the tax‑free bands have not, more of the typical family home’s value is now exposed to tax.
Are pensions going to be caught by Inheritance Tax as well?
Current policy plans point towards more pension wealth being brought within the scope of Inheritance Tax from April 2027, but we should note this is a proposal at this stage and as yet subject to final legislation.
Is this surplus sustainable for the housing market?
A large surplus built on frozen thresholds and lumpy, timing‑driven receipts is unlikely to be sustainable without side‑effects. If higher CGT, SDLT and IHT continue to come from people selling, buying and passing on homes, we can expect more pressure on rental supply, reduced mobility for buyers and trickier inheritance planning for families.
What does all this mean for homeowners, buyers and landlords locally?
For homeowners and landlords in areas like Oxford and across Oxforsdshire, these trends mean that tax is a more central part of every decision to buy, sell, let, or pass on property. Understanding how CGT, Stamp Duty and IHT interact with local prices can help you plan ahead, whether that is timing a sale, budgeting for a move, or thinking about how best to structure your affairs for the next generation.
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Rightmove’s February House Price Index landed this week with a striking headline: property prices have effectively stood still this month. Nevertheless, thanks to the unusually strong uplift seen in January, we are still witnessing the strongest start to a year for asking prices since 2020.
This is a national picture, but it mirrors what we’re seeing on the ground here in Oxford.
In property market terms, Oxford remains in robust health. The market here – both residential sales and lettings – is demonstrating resilience amid a gradual national recovery, with early indicators pointing to stabilisation after some challenging months.
Rightmove’s data suggests buyers are optimistic but still a little cautious, with prices shooting up in January but flatlining this month. That said, sellers are holding their nerve – not dropping prices.
Locally, that same theme is playing out. Fewer dramatic swings, more measured decision-making, and a market that feels steadier than it did through much of 2025.
Local Market Performance
Recent data from the Office for National Statistics (ONS), compiled directly from Land Registry results, shows Oxford's average house price standing at £481,000 as of December 2025 (ONS data always lags by two or three months).
This is around the same value that properties had in December 2024 – which means no discernible price growth in 12 months in Oxford. This is something which, at face value, might give some local homeowners cause for worry.
Nevertheless, this performance mirrors the broader affordability pressures that have characterised the market since mortgage rates climbed sharply in 2023.
First-time buyers in Oxford – the type of buyer that we need to kickstart chain movements – are now paying an average of £412,000, again in line with first time purchasers in December 2024. Meanwhile, mortgage-backed purchases in general average £475,000.
That said, the market continues to show significant variation by property type. Detached homes are commanding an average of £972,000, whilst semi-detached properties are fetching £591,000, terraced houses £479,000, and flats £295,000.
Flats experienced the steepest correction during 2025, falling approximately 5%, whilst terraced houses proved more resilient with only minor price reductions.
One interesting trend we picked up on this month is that up to 31% of first-time buyers are delaying their purchases until they have a 25% deposit saved, per an article in The Intermediary, citing Moneyfacts data. A 25% deposit for first-time buyers; that equates to around £103,000 locally - not a small amount of money to save, and something that will usually take some time.
As such, it means there is a smaller number of first-time buyers available compared to years past, putting pressure on sellers to reduce prices to appeal to that limited pool, with that trend then repeating up the chain as a domino effect.
A flat-lining in value might concern some Oxford homeowners, but taken in context of wider South East performance, there’s reason to feel optimistic.
Pockets of London have seen falls of 15% and more over the past 12 months, although general drops are not so extreme, with much of the southern regions sitting around 5% drops.
Compared to the picture across the south, Oxford has held up well, and as national prices begin to improve, our local market is expected to recover steadily through 2026.
Local Success Stories
Despite the broader statistics, individual properties continue to outperform.
We recently exchanged on a property in Binswood Avenue, which we put up for sale in November, and on which we achieved £50,000 over the asking price.
This was after just two days of viewings, which saw twenty buyers through the door and six competing bids pushing the sale price from the £750,000 headline price, to an £800,000 sale – completing just two months later.
We know that presentation and marketing matter, and we certainly do put the effort in when it comes to these things.
Nevertheless, it’s also noticeable how buyer attitudes have shifted in this early New Year period compared with the hesitation that defined much of last year.
In these first three weeks of February alone, we’ve already had eleven properties go under offer.
If you’re considering selling, this feels like a genuinely promising moment.
Supply and Demand Dynamics
Oxford’s fundamental challenge remains its chronic housing shortage.
Green Belt restrictions and tight planning controls limit development here, in turn limiting supply, and that prevents significant price drops even when demand softens. This structural undersupply, combined with strong employment from the university sector and the city’s science and tech clusters, underpins long-term stability.
The rental market tells a similar story. Average monthly rents rose 6.5% last year, driven by sustained demand from students and professionals competing for limited stock.
The average monthly rent in Oxford now stands at £1,805 per month according to the ONS.
Looking Forward
Rightmove’s February data points to a market finding its footing – steep asking price rises in January, and a bit of calmness this month to settle things down.
Locally, we’re seeing something similar in terms of sentiment, even if the asking price pattern hasn’t quite matched here month by month.
Relatively stable mortgage rates, pent-up demand from postponed movers, inflation just reported to have come down to its lowest level in months, dropping from 3.4% in December to now sit at 3% - and combined with all this, Oxford’s enduring supply constraints.
These things all combine to support a forecast of gradual improvement – albeit probably not dramatic swings.
For sellers, realistic pricing remains essential. For buyers, affordability is improving, but thoughtful decision-making still matters.
The outlook for Oxford’s property market in 2026 is one of measured optimism: steady growth, improving confidence, and fundamentals that remain amongst the strongest in the country.
If you’re considering a move and would like honest advice on where your property sits within today’s market, please get in touch for a no-obligation chat.
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Half Terms and House Prices: An Oxford Market Update
It’s the February half-term holiday, 2026 – and that means ‘busy’.
You just know that Little Sprouts at Millets Farm will be will be enjoying packed crowds of (very) excited children, the Ignite Sport holiday camps at Oxford City FC and the North Oxford Tennis Club will be in full swing, and if you head down to Hinksey or Cutteslowe Parks, you’ll find that, despite the endless drizzle, the children’s play areas, football pitches and cafés will all be absolutely full of life (and indeed, are those blue skies we see today, at last? Or trying hard to be seen, at least!).
Nevertheless, if you’re currently selling your home in Oxford, can you expect things to feel as busy? Or is February half-term one of those quieter periods, like the Easter break can be, and like the Summer and Christmas holidays almost always are?
Here are our thoughts as independent local estate agents in Oxford.
What’s happening in the property market?
There is good news as we hit the February half-term break. In bigger picture terms, the property market is broadly positive.
House prices continued their upward trend in January, with Halifax reporting rising UK property values – and, notably, that they have risen above £300,000 for the first time, reaching £300,077 in January on a 12-month average, per the Halifax Price Index.
Here’s what else the Halifax Index in January 2026 has shown:
- Monthly Change +0.7%
- Quarterly +0.1%
- Annual Change +1.0%
What is interesting about their figures is that average UK property prices rose from £239,253 in January 2020 to reach £300,077 in January 2026 – an increase of just over 25% in six years.
Also noteworthy is that the price increase from 2020 to 2023 was 18.7%, compared with the 5.7% increase from 2023 to 2026.
Growth in the past three years, yes; but much more muted than those previous three – and certainly behind inflation. This is perhaps a sign that prices that had risen too quickly in the immediate post-Covid years are correcting course.
At the same time, last week’s vote by the Bank of England’s Monetary Policy Committee was closer than many expected, reflecting ongoing concerns about subdued economic performance.
This may not be great news for the wider economy, but it does, in our view, reopen the possibility of a base rate cut in March, which markets had begun to discount.
Fixed mortgage rates have been edging up again recently, just slightly, following the pattern of swap rates, which had suggested the market was pricing in no further near-term cuts.
Perhaps that tension is playing on rate setters’ minds.
For local buyers and sellers, this matters. In higher property-price areas like ours, affordability does tend to tighten more quickly when mortgage rates rise, so you can be sure we’ll be keeping a very close eye on it and how it affects you locally.
Which brings us tidily to what probably matters more to you: never mind the national picture, what about the property market and property prices in Oxford?
The Oxford property market is strong despite a flat line in property prices
Here in Oxford, at the time of writing, the average property price over 12 months stands at £491,000, roughly the same as it was a year ago, according to the Office for National Statistics (ONS). And that is positive, because it was not long ago that we were seeing rolling 12-month price drops of 3%, 4%, or even more, at various points over the past year.
Prices may have flatlined on paper – but the reality is, they have improved, from an annual reduction to, now, a levelling off; and that is not the same story throughout the South East of England, where property values in some places still sit at double-digit drops over the course of the last 12 months – especially in parts of London.
This is the context we need to consider when discussing your move locally, whether you’re selling, buying, or simply keeping tabs on your home’s value.
It shows that what is reported in national news headlines or revealed by national indices can differ from the pictures seen in any local or regional marketplace. The national price indices we get from Halifax, Nationwide, or even Rightmove can paint a broad-brush picture, but there can be quite extreme regional variance. In particular, during 2025, the London, South East and East of England markets have been much more subdued, price-wise, than markets in the North of England and the Midlands.
The fact that prices in Oxford are roughly level with where they were a year ago, therefore, compared to drops of 5% to 7% quite commonly across the South and East of the country, and as much as 15% in some parts of London, speaks volumes about the strength of our local market and the desirability of Oxford as a destination for movers. In addition to property values, we have seen rents in Oxford increase by 6.6% over the year, according to ONS data.
Nevertheless, house prices alone don’t necessarily indicate whether a market is moving in a positive direction.
When you look at that general 25% increase over six years, you can understand that properties in general have plenty of equity in them.
In fact, whether we have seen a flatline in values over 12 months, or we were still looking at the 3-4% drops that have felt normal for much of the last 8 months or so, the overall growth we have seen here over not just the past six years, but even many decades, has been so significant that local sellers can afford to take a reduction this year and still make a comfortable move – especially if they are moving locally or to many locations overseas, where sale proceeds may convert favourably on current currency exchange rates.
Most people understand that values are relative. As long as there isn’t a negative equity situation, most movers can think of it as transferring equity from one property to another.
In other words, even if a seller had lost some value in their home this year, if the property they are purchasing had also lost a similar value, there would usually be no financial reason the move couldn’t proceed.
It may depend on mortgage rates, which is why what the MPC votes to do next month is of interest, but generally speaking, it is much more a matter of market confidence.
And that is where the local market is showing real strength, despite anything that prices may or may not have done over the past year – and why this February half-term holiday is still likely to feel busy out there in terms of property market activity.
Plenty of choice for buyers
If you are moving home locally, there are definitely encouraging signs that the Oxford market is coming to life as we hit the half-term break.
At the time of writing, Rightmove shows 204 new listings in Oxford over the past two weeks alone, with 960 properties currently for sale overall. This is a healthy level of choice for buyers in general, but that two-week number, in particular, is another sign of steady and positive market activity.
But will the February half-term holiday week dampen that rising activity? As mentioned, other holiday periods are known to have that stifling effect on property market activity – Christmas and Summer in particular. But historically, this half-term week in February does not tend to have that same effect.
There will be a bit of holiday-making going on, for sure – particularly amongst the skiers out there – but most people do stay at home, perhaps with children off school, but nevertheless not so distracted from life as they often are during those other major holidays.
On top of this, the property market itself is still in that active phase following the post-Christmas/early New Year bounce that we have written about previously (see article here); those who put their Oxford property for sale as part of a ‘New Year’s Resolutions’ drive in early January are starting to go under offer in numbers by around this point, five or six weeks later – and many of them are purchasing another property to move to. This only adds to the swelling number of active buyers who begin their search at around this time, with the idea of a Springtime or early summer move in mind.
So, with listing numbers growing, but competition from other buyers also increasing, if you are buying a property in Oxford right now, it pays to have a plan.
If you’re moving home, clarity is your friend
If you are heading out to view properties this half-term, our strongest piece of advice is to get crystal clear on what you need, what you want (as these can be different), and the reasons you might truly want to be in one particular location rather than another – schools, transport, recreation grounds, bus-gates, hospitals, or whatever else it may be.
That matters far more than the pretty pictures you’ll scroll through online. Those can draw you in – but knowing ‘what, where and why’ helps us as professional estate agents truly get to grips with what will work for you, and what could be made to work.
You want four bedrooms because you want one of those for a dedicated study? You might be missing out on an ideal home with only three bedrooms, that nevertheless has a perfectly sized shed at the end of the garden that could be easily converted.
This is why talking through your requirements with a professional is a good first step. It doesn’t mean any obligation, but from our point of view as agents, it means we can be on the lookout for the right property when we are invited to meet potential sellers.
As we can see, the market is picking up, and we are optimistic, with a good level of choice available to Oxford buyers. But finding the right property isn’t a tick-box exercise. It’s about finding somewhere that genuinely fits your next chapter – and that is what we want to help people achieve.
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The government has set out plans for the most significant changes to private rental sector energy standards in over a decade.
If you’re a landlord in Oxford, we know that much of the private rented sector property stock can struggle to make cost effective improvements, due to the age and style of many properties located here in the city.
There are certain allowances in the proposed legislative changes that might help. It is worth knowing what the changes are and what allowances might ease the transition, so we have put together this guide to lay things out.
The proposed new requirements are expected to affect you by 2030. As local Oxford letting agents, here are the key steps we think you should take now.
What Is Set to Change?
The government has announced its intention that from 1st October 2030, all privately rented properties will need to meet the equivalent of EPC Band C, or have a valid exemption.
This would be a significant step up from the current minimum of Band E that has been in place since 2020.
However, there is something else worth noting in this regard.
The government is proposing to reform how EPCs work. Instead of just the single energy efficiency rating we’re used to, future EPCs (expected from late 2026) are likely to show multiple metrics:
- Fabric performance (insulation, windows, doors)
- Heating system (boiler, heat pump, etc.)
- Smart readiness (solar panels, batteries, smart meters)
Under the current proposals, your property would need to meet a Band C‑equivalent level on the fabric metric first, then Band C on either the heating system or smart readiness metric – with that second route being your choice.
Early Action Will Be Rewarded
If your property already achieves EPC Band C under the current system before 1st October 2029, current indications are that you will benefit under so‑called “grandfathering” provisions.
The government’s response suggests that these properties would be treated as compliant under the new system until that EPC expires (up to 10 years), even once the new metrics are introduced.
This could prove to be crucial: it means landlords who act now using today’s EPC recommendations are unlikely to be penalised when the new system arrives. In fact, you gain greater certainty and may not need to worry about the new metrics at all until your current EPC expires.
These are as yet proposals, remember – this could all yet change. Which means it may be a gamble on your part to do this ahead of 2029; nevertheless, it may prove one worth taking.
Investment ‘Cap’ Lower Than Expected
The government originally floated a £15,000 cost cap per property, but following consultation feedback – including from thousands of landlords and lobbying from the lettings industry – this has been reduced in the latest proposals to £10,000.
Better still, analysis in accompanying impact assessments suggests the average spend per property is expected to be significantly lower than this – between £5,000-£6,000, rather than the full £10,000.
If you invest in relevant improvements and, on hitting that cap, find the property still doesn’t meet the standard, you will be able to register a 10‑year exemption and continue letting.
Importantly, any qualifying improvements you make from 1st October 2025 onwards will count toward this cap, which is designed to encourage early action rather than last‑minute rushes.
Relief for Lower-Value Properties
The government has proposed an “affordability exemption” for properties valued below £100,000. For these properties, the cap is lower, effectively set at 10% of the property’s value rather than the full £10,000.
For example, a property worth £70,000 would only require investment up to £7,000 before an exemption could be claimed. This recognises that lower‑value properties often generate lower rental returns.
The benefit in Oxford – given average property values of just under £500,000 across the city, according to data from the Office for National Statistics – is, we imagine, fairly non‑existent.
Nevertheless, for balance and completeness, this is what has been proposed.
Making Use of Grant Funding
If you are worried about the costs involved in improving the energy efficiency of your property, it is worth noting that there is third‑party funding available – including government grants – and this funding is expected to count toward your £10,000 cap.
The Warm Homes: Local Grant scheme and other programmes may be available to eligible landlords – see link here for information.
There is an important exception: Boiler Upgrade Scheme (BUS) grants (£7,500 for heat pumps) do not count towards the cost cap.
But this does mean, for example, that if you have £3,500 left under your cap, you could install an £11,000 heat pump using the BUS grant – effectively getting a low‑carbon heating system installed within your investment limit.
Exemptions
The government has seemingly taken onboard some of the concerns that have been raised by the lettings sector and landlord groups, and has proposed an expanded exemptions regime, including:
- Solid wall insulation (SWI) exemption: If your property would need SWI to meet the new ‘fabric standard’ but you choose not to install it (perhaps due to concerns about damp or aesthetics), you would be able to register an exemption.
- Negative impacts exemption: If you can evidence that a measure would damage your property or devalue it by 5% or more, an exemption is available. This seems somewhat of a grey area at this stage; we expect that a Red Book or other formal valuation report by a chartered surveyor is likely to be required.
- Third‑party consent: Still applies where freeholders, planning authorities, or tenants refuse permission.
- New landlord exemption: Applies to anyone acquiring a tenanted property, giving six months to comply.
Most exemptions are expected to last 5 years, but the cost cap exemption is expected to last 10 years, which again should help reduce the administrative burden.
Tax and VAT Considerations
The zero‑rate VAT on energy efficiency installations (insulation, heat pumps, etc.) continues until March 2027 under current rules, which could represent a significant saving – but of course the clock is ticking.
Additionally, HMRC guidance and tax commentary indicate that replacing an existing heating system with a modern equivalent can, in some circumstances, be treated as a repair or maintenance cost and deducted from rental income for tax purposes, rather than being capital expenditure. This will depend on the specific facts and on how HMRC views the works, so specialist tax advice is strongly recommended before assuming a particular installation (such as a heat pump) will qualify as a revenue expense.
What Steps Should You Take Now?
- Check your EPCs
Know where you stand. Properties already at Band C or close to it should consider upgrading before October 2029 to benefit from likely grandfathering. - Budget for improvements
The proposed compliance date might be 2030, but that is now only four years away. Planning now allows you to spread costs, make use of any void periods to carry out works, and avoid last‑minute, stressful projects as 2030 approaches. - Consider available grants
Check eligibility for schemes like the Boiler Upgrade Scheme or local authority grants linked to the Warm Homes Plan. - Use quality installers
Government strongly recommends TrustMark‑accredited installers following PAS 2035 standards to ensure quality work and consumer protection. - Keep records
From 1st October 2025, save all receipts for qualifying improvements, as they are expected to count toward your cost cap.
The Bottom Line
These changes represent a clear step‑up in requirements, and many landlords will understandably see them as a burden.
We recognise that, but the government has at least shown some willingness to listen to landlord and industry concerns.
The reduced cost cap, proposed grandfathering provisions, expanded exemptions, and recognition of early action should all help make compliance more manageable – even if they don’t remove the challenge entirely.
With a few years until the anticipated compliance deadline, landlords who plan ahead – particularly those who can achieve a Band C on current EPCs before October 2029 – are likely to find themselves in a strong position as the new regime takes effect.
As always, we’re here to help guide you through these changes and to ensure your property remains compliant and attractive to tenants as the rules evolve.
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New Tenancy Agreement Requirements Announced: What Oxford Landlords Need to Know
Specific legal requirements for what to include in new tenancy agreements have been announced.
Here at Cherry Picked Residental, we specialise in letting and managing properties for landlords across Oxford. Here is our guide to help you navigate the upcoming changes to tenancy agreements under the Renters’ Rights Act, before the date arrives!
With the 1st May 2026 deadline fast approaching for most new private assured tenancies, now is the time to understand what’s required and make sure your documentation is ship-shape and watertight.
The key change: written statements become mandatory
From 1st May 2026, most new private assured tenancies must include a written statement containing specific mandatory information, provided before the tenancy is agreed.
This represents a significant legal change to how rental arrangements are formalised, and getting it right is crucial to avoid enforcement action and potential fines.
What must be included in your written statement
The government’s draft secondary legislation sets out a comprehensive list of mandatory information set to be included. Here’s what every written statement for an assured periodic tenancy is expected to contain under the new rules.
Basic tenancy information
Your written statement must clearly identify the core details of the tenancy:
- The landlord’s full name – if the property has multiple owners, every joint landlord must be named.
- All tenants’ names – every individual who will be party to the agreement.
- A service address in England or Wales – this is where tenants can serve notices on the landlord.
- The property address being let – one hopes this one is a no brainer.
- The date from which the tenant is entitled to possession of the property.
The regulations also note contact details and certain identifiers will be included, so in practice your template will need to capture all prescribed items rather than just the headline points above.
Financial terms
Financial transparency is central to new requirements:
- The rent amount and payment schedule – how much is payable, how often and on what dates.
- A clear statement that rent can only be increased using the statutory rent increase process (the updated Section 13 route), rather than by informal or unilateral increases.
- Utility and service arrangements – whether utilities, TV licence, communication services or council tax are included in the rent or paid separately.
If they are paid separately, you must explain how and when payment is due, or how the tenant will be notified of charges.
- The security deposit amount (if applicable) – you must state the amount to be paid as a deposit.
You do not have to specify in the written statement which deposit protection scheme will be used, although you still have to comply with the existing tenancy deposit protection rules and provide the prescribed information separately.
Notice periods and possession rights
Tenants need to understand their rights and obligations around ending the tenancy and how possession works.
The minimum notice period the tenant must give to end the agreement has a defined statutory minimum, and will be set in regulations.
A statement explaining possession procedures, which is drawn from the Housing Act 1988, must cover three key points:
- The landlord can normally only end an assured tenancy through obtaining a possession order from the court.
- To obtain a court order, the landlord typically needs to serve a notice in the prescribed form setting out the statutory grounds for possession (commonly referred to as a Section 8 notice).
- The notice period will depend on which grounds for possession are being used and what those grounds relate to.
As the wording of these possession explanations is prescribed, your documentation will need to align with the final form set out in the regulations.
Property standards and safety
Your written statement must include several declarations about property standards:
- A statement confirming the landlord’s obligation to ensure the property is fit for human habitation, reflecting the modern “fitness” duties that apply to most private tenancies.
- A statement outlining the landlord’s obligations under Section 11 of the Landlord and Tenant Act 1985, covering repairs to the structure, exterior and key installations.
- A statement detailing the landlord’s obligations under the Electrical Safety Standards in the Private Rented Sector regulations.
- If the property has gas, a statement covering the landlord’s obligations under the Gas Safety (Installation and Use) Regulations.
These elements are designed to ensure tenants are explicitly told, in writing, what standards they can expect from their home.
Equality and accessibility
Two important provisions relate to equality and accessibility:
- Information about Section 190 of the Equality Act 2010 – this confirms that landlords may not unreasonably withhold consent to disability‑related improvements that would help a disabled occupant enjoy the premises.
- Information about the tenant’s rights around adaptations and how to request consent in a way that is consistent with the Equality Act framework.
In practice, this should encourage earlier conversations about reasonable adjustments and clarity over what will be permitted.
Pets and pet requests
The new regime also strengthens tenants’ rights around keeping pets:
- Tenants will be able to request permission to keep a pet under a new section inserted into the Housing Act 1988 by the Renters’ Rights Act, and landlords may not unreasonably withhold consent.
- The written statement must explain this right to request a pet and how landlords will deal with such requests, including any timescales for responding.
Any conditions attached to consent, such as requiring additional cleaning or damage clauses, will still need to comply with the Tenant Fees Act and the existing deposit cap, as there is no separate “pet deposit” permitted.
Special circumstances
If applicable:
- For supported accommodation, you must include a statement identifying it as such and explaining why it meets the criteria set out in the regulations.
This helps distinguish supported tenancies from standard private lets where slightly different rules and expectations can apply.
How this affects Oxford landlords
For our clients across Oxford and its surrounding towns and villages, there are clear practical implications we are keeping on top of on your behalf:
- For new tenancies starting on or after 1st May 2026: providing the written statement before the agreement is signed or otherwise agreed. This information can be incorporated directly into our tenancy agreement or provided as a clearly linked separate document.
- For existing written tenancies created before 1st May 2026: we do not need to issue entirely new agreements just because of the written statement rules, but we must provide all named tenants with a government‑issued information sheet by 31st May 2026. This information sheet is expected to be published in March 2026.
We don’t operate on verbal agreements as an agency, but if you are reading this and currently not a client of ours, and if you do have any existing verbal‑only agreements that started before 1st May 2026, you need to take action – and soon.
Landlords will be required to provide a full written statement with details of the key terms by a statutory deadline (currently expected to fall later in summer 2026), not just an information sheet.
Where a tenancy is partly written and partly verbal, the transitional rules are expected to focus on ensuring the tenant at least receives the government information sheet, with additional written terms provided where necessary to plug obvious gaps.
The risks of non‑compliance
Failure to provide a compliant written statement, or to meet the deadlines for existing tenancies, exposes both landlords and agents to enforcement action, including financial penalties.
Civil penalties for breaches of the new duties can reach several thousand pounds per offence, and repeat or serious non‑compliance may lead to more severe sanctions.
In a competitive rental market like we have here in Oxford, regulatory issues and disputes around unclear terms are the last thing most landlords want distracting from securing and keeping good tenants.
Our approach: getting ready now
Although the final version of the statutory instrument is expected in March 2026, we are already working with our own landlords to review and update tenancy documentation so it can be quickly aligned with the confirmed wording, based on the details in this latest government announcement.
The draft legislation does, after all, offer a clear roadmap, and starting early means we won’t be rushed, nor should our clients feel under pressure when the deadline arrives.
We are also monitoring sector feedback on these requirements.
Industry bodies such as Propertymark and the NRLA have successfully pushed for clarifications on timing and delivery methods, and there are ongoing discussions about how best to reflect agents’ details and to accommodate the upcoming landlord unique identifiers that will be linked to the new Private Rented Sector Database (a separate but related reform under the wider Renters Rights Act 2026).
What you should do next
If you are a client of ours already, don’t worry – we’ve got you covered.
If not, then to prepare and stay ahead of changes, Oxford landlords should:
- Review current tenancy agreements and any side letters – identify where they fall short of the new written statement requirements.
- Watch for the March publication of the final statutory instrument and the government information sheet – these will set the definitive requirements and wording.
- Plan your timeline – if you have tenancies starting in early May, build in time now for agreement updates and for issuing the information sheet to existing tenants.
By all means, if you are unsure about these changes and feel it is time to seek professional advice, please do contact us to discuss updates.
We can help you prepare compliant documentation that folds the prescribed wording into your existing templates without over‑complicating them.
Final thoughts
These changes add some administrative steps to the letting process, but they do serve an important purpose: ensuring tenants have clear, comprehensive information about their rights and obligations from day one. In our experience across Oxford’s diverse rental market, this kind of transparency helps prevent disputes, sets clear expectations and supports stronger landlord‑tenant relationships.
The key is preparation, however. By understanding what’s required and acting now, you’ll be ready when 1st May arrives and your lettings can continue smoothly without interruption – and without you feeling under any stress or pressure.
If you have questions about how these changes affect your specific properties or circumstances, please get in touch.
This article is for guidance purposes and reflects the draft secondary legislation available in January 2026; landlords should seek professional advice for their particular situation and keep an eye out for the final statutory instrument expected in March 2026.
