What do landlords need to know for this year? Here we share 8 things landlords need to be aware of …
1. Renters’ Reform Bill
The landmark legislative change is likely to be progress on the long-awaited Renters’ Reform Bill which is designed to help tenants in several key regards:
- a limit on the frequency with which landlords can increase rents;
- tribunals to hear tenants’ complaints about excessive rent increases;
- the creation of a private rented sector ombudsman service; and
- the freedom for tenants to share their accommodation with a pet – and landlords denied the authority to ban animals.
Perhaps most notably, though, the previously vaunted abolition of Section 21 “no-fault evictions” has been put on the back burner for later implementation.
2. Banning tenants
While the Renters’ Reform Bill remains open to ongoing amendments, the government has recently added provisions that stop landlords from issuing blanket bans on any given grouping of tenants.
In the past, for example, some landlords have specifically blocked prospective tenants from groups such as those in receipt of benefit payments, those with children, or even the disabled. With the passage of the Renters’ Reform Bill, this type of blanket ban will be prohibited.
3. Making Tax Digital
Another government initiative subject to delay is the rolling out of the Making Tax Digital (MTD) scheme for landlords.
Under the revised timetable, landlords earning more than £50,000 a year must complete MTD returns from April 2026 and those earning more than £30,000 from April 2027.
4. Capital Gains Tax (CGT)
It remains to be seen whether a heavier Capital Gains Tax liability will discourage landlords from selling up and leaving the market – but CGT allowances are to be halved again (to just £3,000) from this April.
5. Landlord exodus
Whatever the effects of slashing the allowances for CGT, it is clear that the size of the private rented sector continues to shrink.
A net loss of 300,000 rental properties has been suffered since 2016. 52% of the surviving landlords remain worried about the state of the market, with 10% committed to selling up, according to Which? magazine on the 29th of December 2023.
6. Mortgage rates
Whereas landlords could once enjoy buy to let mortgage rates fixed at 2%, once these expired, their new mortgages are likely to have been nearer to 6%, according to a story in the Mail Online on the 1st of January 2024.
As margins become squeezed, some have found that mortgage repayments currently account for almost two-thirds of a landlord’s monthly rental income.
7. Property prices
Along with mortgage interest rates, the initial cost of investing in rental property is also a key consideration for landlords.
In 2024 – as in 2023 – however, it is still unclear whether prices will change at all dramatically. Market analysts remain uncertain about the eventual trend although the Mail Online forecasts an annual fall in prices of around 5%.
8. A Decent Homes Standard
Finally, landlords need to be aware of the minimum standards for private rented housing that were proposed by the government last November.
The goals are set out in a Decent Homes Standard. These establish a number of broad parameters including the overall state of repair of the property, the maintenance of modern services and facilities in areas such as the kitchen and bathroom, and a “reasonable degree” of heating, insulation, and “thermal comfort”.
In conclusion
The year ahead promises a range of significant changes to the private rented sector – landlords and tenants alike will want to keep abreast of them.
Please note this information is designed for informational purposes based on the author’s current understanding of the law and should not be deemed as legal advice.
