Landlords – should you stay, or should you grow? | Bradleys Estate Agents | Property for sale in Devon, Cornwall & Somerset

Landlords – should you stay, or should you grow?

- Wed 21 Feb 2024

The rental market in England has been booming in recent years, with high demand, low supply, and rising rents. However, 2024 may bring some challenges and opportunities for landlords who want to grow their portfolio and maximise their returns.

Below we have highlighted some of the reasons why landlords should consider expanding their portfolio in 2024.

1. Rental demand is still strong.

Despite the slowdown in the rental market in the second half of 2023, rental demand is still over 32% above the five-year average. This is mainly driven by the lack of affordable housing for first-time buyers, the uncertainty of the economy and the labour market, and the changing preferences of renters who value flexibility and convenience. Moreover, the rental market is expected to bounce back in 2024, with rents forecasted to continue to increase.

2. Legislation changes may create opportunities.

Landlords should also be aware of the upcoming legislation changes that may affect the rental market in 2024. The most significant one is the Renters Reform Bill, which aims to improve the rights and protections of tenants and landlords. The bill has been delayed due to the pandemic, but it may still pass through Parliament in 2024. Some of the key proposals of the bill include:

- The abolition of Section 21 no-fault evictions, which will make it harder for landlords to end tenancies without a valid reason.

- The introduction of a new Private Rented Sector Ombudsman, which will provide a single point of contact for complaints and disputes between tenants and landlords.

- The creation of a rented property portal, which will allow tenants to search for and compare properties across different platforms.

- The rights for tenants to own pets, unless there is a good reason for the landlord to refuse.

These changes may pose some challenges for landlords, but they may also create opportunities for those who can adapt and offer high-quality and compliant properties. Landlords who can provide secure and long-term tenancies, pet-friendly accommodation, and good customer service may attract and retain more tenants in 2024. We at Bradleys are at the forefront of any legislative changes to ensure our Landlords remain compliant.

3. Capital growth forecast.

One of the main benefits of becoming a landlord, particularly over a longer term, will be the increase in the property value. With the market in 2024 showing signs of recovery after a challenging 2023, mortgage rates coming down to attract more buyers back into the market, 2025 and beyond is set fair and therefore likely to start seeing growth in house prices once again. Some forecasts are suggesting a 3% increase, with other more optimistic forecasts around 5-6% growth. Regardless, it will vary between regions and even between neighbouring towns in some instances.

With all property purchases, there is a degree of risk over house prices, although over 5 years, and certainly a 10 year period, house prices are almost always likely to have grown and therefore a Landlord will be gaining even greater value from their investment in addition to the monthly income.

Conclusion

2024 may be a challenging but rewarding year for landlords in England who want to grow their portfolio. The rental market is still strong and portfolio landlords have a competitive edge. However, landlords should also be prepared for the legislation changes that may affect the rental market. Landlords who can adapt and offer high-quality and compliant properties may have an advantage in 2024 and over the longer term will almost certainly enjoy the capital appreciation of their investments.

The award-winning team at Bradleys Estate Agents, offering both sales and lettings services are on hand to help advise on demand from tenants, areas to focus on, rental yields and of course to explain which of the three services; gold, silver or bronze is most suitable for you. The team will be willing to show you around any suitable properties we have currently for sale and also advise on any other properties you may have seen regardless of whether Bradleys are marketing them.

Landlords – should you stay, or should you grow?

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