As we step into 2024, landlords are facing a rental market that’s evolving in real-time. It’s a year teeming with potential, packed with trends that could reshape how you manage your properties.
In this guide, we’re spotlighting the five key shifts that are set to make the biggest impact. Understanding these trends is vital for making informed decisions and keeping your rental business ahead of the curve.
So, let’s get a clear view of what 2024 has in store for landlords and how you can adapt to these changes seamlessly.
1. Rental Reforms on the Horizon
For landlords, 2024 is a year to watch the Renters’ Reform Bill closely. This significant proposal, launched in 2023, is set to bring big changes. It aims to put an end to certain types of evictions, make it easier for tenants to have pets, and revamp rental agreements.
Although it’s made some progress, there’s a twist: the plan to stop these evictions is on hold until there are changes in the court system. The bill has a few more hurdles to clear in Parliament, and with an upcoming election, there could be more delays.
It’s crucial for landlords to keep tabs on these developments. Understanding these potential changes is key, as they will impact how you manage your properties and interact with tenants. Stay informed to navigate these changes confidently.
2. Landlords Weighing Their Options
In 2024, UK landlords are facing a mix of rising costs, limited tax breaks, and new laws, leading many to think about selling. The Open Property Group’s research shows that a third of landlords might retire or exit the market due to similar issues.
Despite these trends, some landlords might stay due to the capital gains tax allowance dropping in April 2024, which could influence their decisions.
While only 3% of landlords plan to buy this year, the high demand for rentals suggests buying could still be worthwhile. The National Residential Landlords Association noted that rental demand in late 2023 was three times higher than pre-pandemic levels.
And even with some dips, house prices might climb again over time.
3. The General Election’s Impact on Rental Market
The upcoming general election, due by January 2025, is set to be a major influence on the UK rental market. Political parties are gearing up to address the concerns of the vast number of landlords and tenants.
Landlords are particularly troubled by the ever-changing and complex legislation, while tenants grapple with increasing costs. A study showed 39% of renters are paying more than the listed rent.
The Conservative Party is pushing for a ‘better deal for renters’, which includes rental reforms. On the other hand, the Labour Party is prioritizing the end of Section 21 evictions and may introduce measures like compulsory licensing and rent controls.
As the election nears, these policies will shape the future of the rental market.
4. Rental Prices: Rising but Slowing Down
In 2023, rents went up quickly, and they’re expected to keep climbing in 2024, though at a slower pace. This rise in rents could stretch many tenants’ budgets.
Hamptons’ data showed that rent prices reached their highest in August 2023 but started to stabilize afterward. Propertymark observed a similar trend, with more letting agents reporting rent decreases later in the year.
Savills predicts a 6% increase in rents for 2024, a dip from the 9.5% hike seen previously. They anticipate rents reaching a point in 2025 where increases might be limited by what people can afford.
5. Focus on Energy Efficiency Continues
In a surprising move, Prime Minister Rishi Sunak called off the plan to raise energy efficiency standards for rentals in England and Wales. This announcement in September 2023 ended years of speculation about new regulations.
Many landlords, concerned about the cost of upgrades, were relieved. Others, who had already invested in improving their properties’ Energy Performance Certificate (EPC) ratings, were left disappointed.
Despite this reversal, energy efficiency in rental properties will likely stay a key topic in 2024. With rising energy costs and worsening climate change, it’s a critical issue for both landlords and tenants.
Additionally, with the upcoming election, political parties might propose new initiatives to enhance EPC ratings, putting pressure on the government to revisit their plans.
Other Areas For Landlords To Look Out For
In 2024, landlords need to keep an eye on several other important areas:
- Short-Term Lets Regulation: Changes in the regulation of short-term rentals are expected, with details likely to emerge throughout the year.
- Landlord Licensing: Following the introduction of more selective licensing schemes in 2023, consultations for new ones are ongoing in 2024.
- Rising Mortgage Costs: Although interest rates have stabilized, many landlords have seen increased mortgage repayments recently.
- Expanded Property Listing Details: Trading Standards will require landlords in England to provide more information in property listings, including aspects like utilities and flood risk.
- Increasing Tax Costs: Despite some tax breaks, landlords might face higher tax bills due to frozen income tax thresholds and the effects of recent tax legislation changes.
Adapting to 2024: A Landlord’s Perspective
2024 brings a landscape of change for landlords. From the possibility of new rental reforms and the impact of the general election to the evolving scenarios in rent rates and energy efficiency standards, the year is packed with developments that require attention and strategic adaptation.
At Countplus Accounting, we understand the complexities of these changes. Our commitment to going beyond expectations, attentiveness to your unique needs, and efficient handling of your tax and accounting affairs, make us an ideal partner in these times.
With Countplus, you have a team that includes tax specialists and auditors, all equipped to guide you through the financial intricacies of being a landlord in these changing times. Let us help you navigate 2024’s rental market with confidence and ease—contact us today. New clients get 3 months free!