2023 Landlord Challenges & 2024 Predictions

This year has been challenging for landlords in many ways.

The government is pushing a raft of reforms through Parliament in time, hoping to influence renters in the next general election while stealing ground from Labour.

Meanwhile, rents have soared, but so have interest rates and the cost of living to bite into landlord profits.

Below, we look back at some of the main events for landlords and look forward to what may come in 2024.

Mortgage rates reach a peak

Buy-to-let mortgage rates have stabilised after almost a year of increases.

The Bank of England has held the base rate at 5.25 per cent since August. Lenders have responded by cutting a sliver off fixed rates, but variable rates are still moving up slowly.

Bank and building society trade body UK Finance forecasts lending to purchase buy-to-let homes will drop 13 per cent to £7 billion in 2024 after slumping 53 per cent this year to £8 billion.

Rents go through the roof

Rents are still rising and show no signs of slowing down.

The average buy-to-let rent in November was £1,279 a month, according to rent referencing firm Homelet. This compared with £1,174 a month at the close of last year - a difference of £105 a month.

In London, tenants are paying £2,174 a month, compared with £2,007 a year ago, which is £167 a month more.

Forecasts for 2024 are for rents to keep rising as fewer properties come to the market while the number of prospective tenants grows.

Tenants paid a record £85.6 billion rent in 2023, says London estate agent Hamptons.

The rent bill was £8 billion more than the previous year’s total rent paid of £77.6 billion. Rent payments have doubled since 2010, the research claims.

The data shows millennials - adults aged 27 to 42 - are the largest age group of renters, comprising 58 per cent of the market.

Leasehold reform

The Leasehold and Freehold Bill passed a second reading in Parliament. The Bill proposes changes to resolve ownership problems for leasehold property owners.

The measures include:

• Making extending a lease or buying a freehold cheaper and easier
• Increasing standard leases to 990 years with ground rent reduced to a peppercorn payment
• Giving more rights to leaseholders who want to take over management of their building
• Stopping freeholders and managing agents from charging unfair fees

Leaseholds account for around five million homes in England and Wales.

EPC and boiler targets scrapped

Prime Minister Rishi Sunak scrapped more challenging energy performance certificate (EPC) targets for rented homes in a U-turn on green policies.

The government had announced all privately rented homes should have a C-rating for new tenants by April 2025 and that the regulations should extend to all tenancies by April 2028.

Sunak cancelled the measure, explaining he felt the target would cost too much for landlords and was an unfair financial burden on the sector.

He also pushed back the target to convert from gas boilers to heat pumps from 2026 until 2035.

Three Housing Ministers

Sitting in as housing minister at Michael Gove’s Department of Levelling Up, Housing and Communities this year were Lucy Frazer (38 days), Racheal Maclean (279 days) and Lee Rowley (48 days), who was back for a second stint after previously taking the role for 48 days in 2022.