As a landlord in 2024, there are several key factors to be aware of that will influence your rental property business. Here are five crucial aspects to consider, along with some advice for landlords:
1. Impact of the General Election
The forthcoming general election will have significant implications for the rental market. Key points to note:
- Political Agendas: Political parties will focus on landlord and tenant issues to garner votes. The Conservative Party will likely highlight its ‘better deal for renters’ initiative. In contrast, the Labour Party aims to abolish Section 21 evictions and may introduce measures like compulsory licensing and rent controls if they win.
- Landlord Sentiments: With 66% of landlords concerned about frequent legislative changes, the election outcomes could either exacerbate or alleviate these worries.
- Advice for Landlords: Stay informed about political developments and potential changes in legislation. Consider joining Ello Property for updates and support.
2. Rental Market Trends
In 2024, rents are expected to continue rising but at a slower rate than in 2023:
- Past Performance: Average rents increased by 9.5% in 2023, peaking in August.
- Future Predictions: Rents are anticipated to rise by around 5-6% in 2024. The peak renting season in the summer is likely to follow the usual trend, contributing to these increases.
- Advice for Landlords: Review and adjust your rental prices periodically to stay competitive. Offer quality amenities and maintain your property to attract and retain tenants.
3. Minimum Energy Efficiency Standards
Energy efficiency remains a critical focus despite recent changes:
- Policy Changes: In September 2023, the UK government decided against raising the minimum energy efficiency standards, ending years of speculation.
- Ongoing Importance: Enhancing energy efficiency is crucial for reducing energy bills and addressing climate change. Future political pressures may revive plans for stricter standards, making it wise to consider energy efficiency improvements as a medium-term investment.
- Advice for Landlords: Invest in energy efficiency upgrades like better insulation and energy-efficient appliances. This not only reduces bills but also increases the appeal of your property to environmentally conscious tenants. Some tips here.
4. Progress of the Renters’ Reform Bill
The Renters’ Reform Bill, introduced in 2023, is set to bring significant changes:
- Key Provisions: The bill aims to end Section 21 evictions, simplify tenant pet ownership permissions, and abolish fixed-term tenancies.
- Legislative Process: The bill has passed initial readings and committee stages but still requires further approvals. The general election could delay its final implementation, possibly pushing new laws into late 2024 or early 2025.
- Advice for Landlords: Prepare for changes by familiarising yourself with the proposed reforms. Consider flexible tenancy agreements and be ready to adapt to new legal requirements once they are enacted.
5. Decision to Sell or Hold
Many landlords are contemplating selling their properties in 2024, but it may be worth reconsidering:
- Market Dynamics: Despite legislative challenges and reduced tax relief, the demand for quality rental properties remains strong. House prices are also expected to rise in the medium term, making rental properties a solid investment.
- Tax Considerations: The capital gains tax allowance will be reduced in April 2024, decreasing from £6,000 to £3,000. This reduction might encourage landlords to retain their properties to benefit from potential future gains.
- Advice for Landlords: Evaluate the long-term benefits of holding onto your property versus selling. Consult with a financial advisor to understand the tax implications and potential investment returns.
Staying informed about these aspects will help you navigate the rental market more effectively in 2024. For further assistance on running your rental property efficiently, consider reaching out to professional services like Ello Property.