Rental market: 5 things landlords need to look out for in 2024
After several years of waiting, one of the biggest buy-to-let events of 2023 was the launch of the Renters’ Reform Bill in May 2023.
The bill, which covers the rental market in England, set out its plans to ban Section 21 evictions, make it easier for tenants to request to keep pets, and end fixed-term tenancies.
Since then, the bill has passed a first and second reading, as well as a committee stage. Ahead of the committee stage, the government announced a significant U-turn: Section 21 evictions won’t be abolished until the justice system is reformed.
During 2024, the proposed reforms could edge closer to becoming law. Before this happens, they’ll need to complete a report stage and third reading in the House of Commons and then pass through the House of Lords.
Considering this, it’s unlikely any laws will be implemented until late 2024 or early 2025. Another consideration is the upcoming general election, which could cause further delays and uncertainty.
Over the coming months, more details around how the government plans to reform the court system to end Section 21 evictions could be published. You can see the latest version of the bill here, which includes the amendments that were passed at the committee stage.
Landlords will continue to sell due to challenging conditions
Rising costs, limited tax relief, and changing legislation – there are many reasons why landlords may consider selling a property in the coming months.
As part of our 2023 Landlord Report, a quarter (25 per cent) of landlords told us they were planning to sell a property before August 2024.
Another study by the Open Property Group found that a third of landlords are considering retiring or leaving the market due to issues with legislation and rising costs.
With the 2024 market landscape likely to remain similar to the previous year, it wouldn’t be surprising to see landlords continuing to consider their options.
One factor that may convince some landlords to stick it out is a further reduction of the capital gains tax allowance in April 2024, when it drops from £6,000 to £3,000.
As recently as March 2023, the CGT allowance was as high as £12,000. These changes have significantly increased tax bills for many landlords who have decided to sell in recent times.
Are there still reasons to buy rental property?
Just three per cent of landlords are planning to buy a property in 2024, according to our research.
However, high demand for rental property means buying could still be a good option for some investors.
A study by the National Residential Landlords Association found that rental demand in the third quarter of 2023 was three times as high as it was in Q3 2019 before the Covid-19 pandemic.
On top of this, despite some falls this year, average house prices are expected to rise again in the medium and long term.
Sourced by: Simply Business