If there’s one thing we can be sure of in the UK property market, it’s that things rarely stand still – and 2024 has been no exception, introducing both legislative reforms set to reshape landlord-tenant dynamics and shifting economic conditions testing even seasoned investors.
Indeed, landlords have faced a year of significant change – and for some, these hurdles have proven insurmountable, with 30% of landlords giving up at least one of their properties within the last year, according to an October survey by Goodlord.
Whilst the media likes to paint a picture of decline, describing buy-to-let as a sinking ship, however, the reality is far more nuanced. The market is dynamic, rather than capricious and, for those willing to adapt, it’s still perfectly possible to generate steady, long-term returns and growth. It’s simply a matter of heeding these five key lessons from 2024, in order to successfully navigate complexities and thrive as a landlord over the next 12 months and beyond:
Lesson 1: Stay ahead of legislative changes
The Renters’ Rights Bill 2024 represents one of the most significant overhauls the UK rental market has seen in decades. When it enters into force in Spring 2025, fixed-term tenancies will become a thing of the past, in favour of periodic, rolling contracts. Rent increases will likewise be standardised and limited to once per year, subject to specific caps, in order to create a more equitable landscape for tenants, in which landlords will furthermore face stricter requirements to end a tenancy. As such, eviction grounds will be narrowed to specific, evidence-based situations, such as three months’ rent arrears or the need to take full repossession in order to make substantial upgrades to the property.
Moreover, all private landlords will need to register with a national database to boost transparency and accountability in the rental market. Whilst these changes may feel daunting or like a loss of control to many landlords, those who adapt by stating informed and seeking expert advice to ensure compliance will continue to perform well. It’s simply a case of approaching the reforms proactively, adapting business models to maintain high-quality, well-managed properties. Think of these updates as an opportunity to cultivate stronger tenant relationships, where landlords who prioritise transparency, responsive maintenance and respectful engagement will see fewer disputes and lower tenant turnover – reducing costs whilst stabilising income by building trust in the long term.
Lesson 2: Energy efficiency as a business priority
Tougher energy performance standards, aimed at reducing emissions, also came into play in 2024, with rental properties required to achieve an Energy Performance Certificate (EPC) rating of at least C by 2028. For landlords with older properties, this means significant upgrades, including double glazing, energy-efficient heating systems and better insulation.
Fortunately, grants such as the ECO+ scheme and Home Upgrade Grant are available to help landlords cover the cost of improvements. Of course, early application is critical. For those who can afford to go beyond these measures, the long-term payoff is substantial, where properties with superior energy efficiency generate higher rental incomes and suffer from reduced void periods in a market where tenants increasingly prioritise sustainability. These upgrades likewise enhance overall property value, futureproofing investments against stricter regulations that may be enforced in future.
Lesson 3: Plan for higher costs
Of course, it wouldn’t be a thorough 2024 review without mentioning the Autumn Budget, which introduced a 2% rise in stamp duty on second and additional properties, increasing rates to 5%. This additional cost calls for careful financial planning, particularly for those considering expanding their portfolios. Landlords must thus assess whether purchasing through a limited company might offer tax benefits, likewise exploring regions with lower purchase prices and higher yield potential to offset this new financial burden.
Lesson 4: Diversify your rental strategy
It’s not just landlords feeling the brunt of the economy, however. The growing preference for more affordable rental options, coupled with the rise of co-living arrangements, is fuelled by the cost-of-living crisis, with tenants seeking more affordable homes. This suggests that landlords may benefit from diversifying their property portfolios to include other types of housing as well as traditional homes. Both multiple occupation (HMOs) and student housing properties tend to offer higher returns, though this must be balanced with increased demands for management. Combining such properties with single-tenant and family lets – and even commercial units – can help landlords willing to be more hands on to spread the risk whilst taking advantage of emerging opportunity.
Lesson 5: Don’t let the media deter you
Despite headlines on landlords leaving the market, rental property remains an attractive long-term investment when managed strategically. Tangible assets like property offer unique advantages, including capital appreciation and the potential for consistent income. By staying informed, seeking professional advice and choosing investments wisely, landlords can still outperform other asset classes under the right conditions and guidance.
A dynamic – not capricious – market
The UK property market may appear volatile, but it is far more dynamic than unpredictable. The key to success lies in preparation: understanding legislation, managing costs and adapting strategies and portfolios as the market evolves. With the right approach, landlords can not only survive but also thrive in a system where flexibility and resilience are rewarded.
John Howard is a property consultant, developer, trader and investor, with over four decades of experience within the industry.