10 Key Insights for Landlords in 2024

Posted on January 5th, 2024.

In 2024, both landlords and tenants face numerous challenges, including widespread tenancy reforms, elevated borrowing costs, and escalating rents. While the government’s Renters Reform Bill is expected to grab attention, uncertainties persist regarding the fate of no-fault evictions. The recent postponement of planned energy-efficiency modifications, coupled with the prospect of increased rent expenses and a growing trend of landlords selling properties, indicates a potentially tumultuous period for property investors and renters alike. Here, we explore 10 crucial aspects that landlords and tenants should be mindful of as we embark on the new year.

1.Tenant Protections: The Renters Reform Bill, anticipated to become law by the end of 2024, introduces protections for tenants. Key reforms include regulations on rent increases, the establishment of an ombudsman for swift dispute resolution, and the right for tenants to keep pets in rented properties.

2.Reforms to Section 21: Evictions face a significant delay in 2024, a notable absence from the changes introduced by the Renters Reform Bill. The initially proposed ban on Section 21 no-fault evictions, a key element of the 2019 Conservative Manifesto and the Bill, has been postponed. This delay is attributed to necessary modifications in the court system, with no specified timeframe provided. Nevertheless, the Bill is advancing with enhanced landlord powers to evict tenants in cases of anti-social behaviour or repeated rent defaults.

3. Landlords prohibited from implementing universal bans. In November, the government introduced revisions to the Renters Reform Bill, making it unlawful for landlords and letting agents to impose broad restrictions on tenants receiving benefits or with children.

This measure aims to prevent discrimination against families and vulnerable individuals, with the proposed modifications initially applicable to England and Wales and later extending to Scotland during the parliamentary process. While these changes won’t be enforceable in Northern Ireland, landlords implementing blanket bans may still run afoul of anti-discrimination laws.

4.Landlord Standards: The government plans to apply a Decent Homes Standard to the rented sector, with councils granted enforcement powers. Non-compliant landlords could face fines up to £30,000 and potential banning orders, while affected tenants may claim compensation of up to 24 months’ rent.

5.Rising Rents: Due to a shortage of affordable housing, rents have surged, with a 10.2% year-on-year increase in November 2023. Projections indicate that high rents are likely to persist in 2024, with forecasts suggesting a further 5% rise.

 6.Buy-to-Let Mortgage Rates: Although buy-to-let mortgage rates are gradually decreasing, landlords still face higher monthly repayments compared to previous years. With a current average fixed rate of 6.02%, potential reductions may not be significant despite possible changes in the Bank of England base rate.

 7.Energy Reforms Scrapped: The government postponed energy-efficiency rule changes for rented properties, including achieving ‘C’ ratings by 2025 for new rentals and 2028 for existing ones. Concerns about increased costs for landlords and potential pass-on to renters led to the shelving of these reforms.

8.Landlords Selling Properties: Buy-to-let profits hit a low, prompting increased sell-offs of properties. Changes in mortgage interest tax relief contributed to this trend, with data showing more rented homessold than purchased since 2016. A survey revealed that 52% of landlords are concerned about upcoming reforms, with 10% planning to sell their properties.

9.Capital Gains Tax Reduction: From April 2024, Capital Gains Tax allowances for landlords selling properties will be halved to £3,000. This reduction may result in higher CGT bills for investors, despite the existing rates of 18% for basic-rate taxpayers and 28% for higher-rate taxpayers remaining unchanged.

10.Making Tax Digital Delay: The government’s tax modernization program, Making Tax Digital (MTD), has been postponed by two years. Self-employed landlords will be required to use the MTD system for digital record-keeping and quarterly updates to HMRC from April 2026 (for incomes over £50,000) and April 2027 (for incomes over £30,000).

 If you have any questions regarding this article, do not hesitate to email us or call our landline, both of which are noted below.If you’re a first time landlord or a property investor with a large portfolio who is investing in buy to let, we can help. Contact us on 020 8366 9777 or email us at info@ashmoreresidential.com for a no obligation chat about how we can help you to maximise the income potential of your property investment.