Lettings outlook 2024: what can landlords expect from the rental market this year?
Our February Property Blog is provided by Lou Fletcher from Piccolo Property Sales and Lettings. She looks at what the outlook is for the lettings market and what landlords can expect from their property investments this year.
There’s no denying that landlords faced a pretty challenging 2023. In particular, many of those who were highly leveraged decided to simply sell up, but did they act too soon?
Their departure has left a large hole of opportunity for existing investors and newcomers to fill, with the chronic shortage of homes and massive demand in the Wilton & Salisbury area pushing rents to ever-new heights.
While 2024 has started positively and looks set to be far less turbulent, there are also some upcoming changes for landlords to consider, and in this week’s blog, we’re looking at:
- The return of accidental landlords
- Improvements in the mortgage market
- Clarity over net zero requirements
- Additional opportunities to expand
So wherever you’re at right now in your landlord journey – thinking of selling up, planning to expand, or raring to buy your first rental investment – read on for how to make the most of this year and beyond.
More accidental landlords
It’s no secret that finding a buyer in 2023 took longer than in 2022, but that doesn’t mean that people’s lives slowed down as well.
When you need to move, you need to move, and some sellers gave up the search for a buyer and rented out their homes instead to keep their plans on track.
Depending on how many more sellers become ‘accidental landlords’ this year, their presence could filter through to the rental market in various ways.
Having a wider choice of available homes could give tenants the luxury of being fussy rather than entering a bidding war over the first thing that comes along.
At the same time, we could see more upmarket rental homes entering the market because homeowners usually spend more money than landlords on fixtures, fittings and design.
This could create a new tier of higher-value, stylish homes appealing to high-earning tenants who are willing and able to pay more for extra comfort.
As with any change, opportunity is never far away, so get in touch if you’d like to chat about the rental market in the Wilton & Salisbury area and how you and your business could benefit.
More clarity over Net Zero
With a general election on the cards in the next twelve months, we’re likely to see clearer messaging from the political parties around the hot topics of rental property and energy efficiency.
In essence, the net zero targets aim to ensure all rental homes are warm, low carbon and affordable to heat, so expect measures for insulation and emissions.
Most homes will need to use low or zero-carbon heating, which means phasing out gas boilers (although the timelines have been pushed back to beyond 2030).
Nonetheless, it makes sense to be mindful of potential costs when adding to your portfolio and whether to discount certain homes entirely or bargain hard to pay for energy-efficient upgrades.
Regardless of whatever course the next Government takes, clarity is good for landlords to help you plan ahead, budget with confidence, and set your properties up for a long-term future.
More opportunities to expand
Highly leveraged landlords had a tough time in 2023, and it’s estimated that around 139,000 rental properties were sold.
As well as making the shortage of homes even more acute, that exodus provides several opportunities.
UK rents rose by 6.1% in 2023 while house prices decreased by 1.2%, and Hamptons estimates that rents will increase four times faster than house prices between now and 2026.
The slower sales market has seen properties taking longer to sell, and with more homes coming up for sale, new and expanding landlords can strike a better bargain.
Buying a tenanted property from an exiting landlord means you can start earning income from the day you complete your purchase.
Finally, bear in mind that many rental homes are let out below their current market rate, so there could very well be hidden extra value in the properties being sold.
Are you reviewing your buy-to-lets for 2024?
If there is anything in our February Property Blog that you would like to discuss further, then Piccolo Sales and Lettings would love to hear from you. Whether it’s increasing your income, planning for future energy legislation. Or you might want to find out which homes in the Wilton and Salisbury area could be the most profitable to add to your portfolio, they are here to help. Whatever you’d like to know, call them on 01722 580059 or message them at info@piccoloproperty.co.uk.
Please note. While we take care in choosing local property partners to recommend to our clients, we cannot be held responsible for the service they provide.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.