It's been a decade of continuous change for landlords, and there's no sign of a let up just yet.
Lettingaproperty.com is calling for landlords to take a strategic approach to their property management in 2024, to help them navigate legislative changes, market trends and fiscal considerations over the year ahead.
After a challenging year for the property market, the online rental platform believes the private rented sector still “offers huge potential for growth”.
Rents are up 9.3 per cent year on year, the average time to let via Rightmove is just 17 days, and there are currently an average 25 tenants to each property, according to the business.
It has published seven top tips to support landlords to achieve their property investment goals next year, through a winning combination of ‘diversification, portfolio optimisation and adaption’.
Founder and CEO of lettingaproperty.com, Jonathan Daines, said: “We urge landlords to review their costs, services and focus to maximise return on investment, while ensuring they protect their investment.”
“2024 presents a mix of challenges and opportunities for landlords. By staying informed and proactive, especially regarding new regulations, energy efficiency, market trends and tax considerations, landlords can navigate these changes effectively, ensuring a positive ROI and sustaining a robust business model.”
Key recommendations for landlords
1. Leverage market trends and geographical opportunities
It will be important for landlords to keep abreast of property market trends over the coming year. Those who focus on areas undergoing significant redevelopment or economic growth, such as Birmingham, may find they can achieve a higher return on investment (ROI) due to increasing demand.
2. Diversify property portfolios and embrace opportunity
It’s time for landlords to think outside the box in 2024. That means considering alternative options, such as houses in multiple occupation (HMOs), which typically produce higher yields, or small Build to Rent projects that support long-term growth. This diversification strategy balances risk and protects against market shifts.
3. Optimise property management and return on investment
Landlords should review and potentially enhance their property management strategies to ensure they are cost-effective, provide the level of service they need, and align with current regulations and tenant expectations.
4. Ensure financial and legal protection
The need for landlords to protect themselves and their investments is more important than ever. Landlords should review how much coverage their agency provides – including rent protection, legal cover and landlord insurance – then take steps to fill the gaps and gain financial peace of mind.
5. Adapt to the Renters Reform Bill
This significant legislation is set to reshape the lettings sector. While measures and timescales remain unclear, landlords must stay informed and prepare to adapt.
6. Focus on improving energy efficiency
Despite proposed EPC changes being shelved, landlords should continue to improve energy efficiency where possible to add property value, reduce energy bills and appeal to environmentally conscious tenants, potentially increasing rents and yield.
7. Plan for Capital Gains Tax changes
Capital Gains Tax thresholds are changing from April 2024. The changes will likely increase tax liability for landlords who sell properties. Landlords must be aware of the implications of selling up versus maintaining or extending their portfolios.