What does 2024 hold for landlords and tenants?

25 January 2024

2023 was a frantic year for the rental market. Landlords continued to see high yields with average rents increasing by 9.7% in the last year*. So, what’s in store for 2024?

Buy To Let Market

Property prices have been decreasing yet rents remain on the rise, creating a favourable scenario for new buy-to-let landlords for the following reasons: there continues to be a shortage of property for let as tenants have reduced their frequency of moving, mortgage costs have increased and an aggressive tax regime on landlords has persuaded some to sell and reduced new landlords and demand is increasing.   

This is attracting a wave of recently retired first time landlords to the market as they look to supplement their income.  New landlords are welcome, as this increases the supply, thus meeting some of the demand for rental properties and thus will help to temper the rapid growth in rental prices.  What may also appeal to new landlords are reducing mortgage rates and mortgage products that can be offered up to aged 80 and mortgage terms of 35 years if applied for before age 70.

The Renters Reform Bill

First heard on 17^th of June 2023, the Renters Reform Bill is said to be a ‘once in a generation’ overhaul of housing legislation. The aim of the bill is for safer, fairer and higher quality homes across the UK improving life for both tenants and Landlords. The elimination of Section 21 notices, the movement of all tenancies to periodic and stricter regulations on discrimination against families, pet owners and those on DSS are a few of the mentioned changes. For Landlords, there will be many benefits too. Landlords will also be able to recover their properties more easily, particularly from anti-social tenants breaching their tenancy agreements. The bill is likely to be in place by the end of 2024.

Conclusion

2024 is set to be positive, with more rights for both tenants and landlords. Renting has many advantages over buying. You don’t have to worry about maintaining your home; the deposit is smaller, and you can make a move more quickly.

With more reforms on the horizon and a wave of new retiree landlords entering the market, this should create a more stable market.  We would expect some inflation in rents but this will be tempered by new supply, more movement of tenants as properties become more affordable to buy and a point at which recent cost of living inflation just makes a rapid increase unsustainable.  Tenants will also be able to enjoy a greater choice of better properties.

If you would like to understand more about the market, please talk to us on 01403 886288.  We have financial advisers within the business and a wealth of experience in many different markets spanning over 2 decades 

*Data provided by Zoopla.