This year could prove to be a key one for the UK’s rental market and the sector is expected to grow, driven by low supply of housing stock coupled with high demand.
Two national estate agency chains, for example, have separately predicted a 4% rise in the UK’s rental market. However, one well-known property portal says that, although rents will still grow this year, they may do so a little more slowly than in recent years, as affordability pressures come into play.
(Last year, rents increased by 9.1% UK-wide in the year to November, according to the Office of National Statistics, while in England the figure was 9.3%, a record high.)
Equally, with mortgage rates expected to come down this year, things could become easier for landlords who are keen to expand their portfolios or wish to remortgage. The proposed changes could encourage some landlords to sell – which has been happening more than landlords have been buying in recent years. This could increase competition for rental homes among tenants, keeping the sector buoyant.
There are a number of other reasons why the months ahead could be significant, from new reforms to the sector aimed at boosting standards for renters kicking in, changes to stamp duty and fresh energy efficiency rules.
Here are some of the things you need to know:
1.) New protections for tenants
The Renters’ Rights Bill is set to become law this year. Measures include only being able to rise rent once a year, stopping ‘rent bidding’ and the creation of a new ombudsman service. (Blanket bans on tenants keeping pets will also be stopped.)
2.) New standards for rental homes
A new Decent Homes Standard for the private rental sector (PRS) will aim to guarantee the safety of properties in which tenants live. At the same time, Awaab’s Law is to be extended to cover privately rented homes – this requires landlords to identify and fix health risks such as mould quickly in rented properties.
3.) A new database for the sector
This will bring together important information for tenants and landlords as well as local councils. So tenants should feel better informed, while the database will also provide guidance to landlords about their duties.
4.) No-fault evictions
The Renters’ Rights Bill incorporates a commitment to ending ‘no-fault’ Section 21 evictions – in other words, landlords will have to give a reason if they end a tenancy. However, in reasonable situations, such as wishing to move into a place themselves, or wanting to sell up, landlords will still be able to reclaim their properties.
5.) Blanket bans on renters to end
Under the Bill, landlords and lettings agents will not be allowed to impose blanket bans on those who have children or who are in receipt of benefits from renting their flats or houses.
6.) Stamp duty changes
In her Budget last autumn, Chancellor Rachel Reeves brought in a 2% rise in stamp duty on buy-to-let places and second homes across England and Northern Ireland, which could deter some landlords from expanding their portfolios. (Further changes to thresholds kick in April, meaning most people purchasing a property will pay an extra £2,500 in tax.)
7.) Energy reforms
Rented homes will have to have at least a C rating on Energy Performance Certificates by 2030 under the proposals. It’s believed that some 340,000 rental properties will require improvements to achieve this, and landlords will be responsible for fitting the bill for these enhancements.
Talk to Carter & May
At Carter & May, we’re the leading independent estate agents for Salisbury and the surrounding areas, including Ringwood, the New Forest, Amesbury and Fordingbridge. So if you have somewhere to let out, we have the local expertise to help. What’s more, we provide a highly personalised service from start to finish, while our friendly, professional team has more than a century and a half of combined industry experience.
Get in touch today to learn more about what we could to maximise rental income on your property.