An property agent shared his prime rental market predictions for 2024.
Ruhul Shamsuddin, founding father of Lordsons Estate Agents in Southend-on-Sea, has over a decade of expertise promoting and letting properties. Now he revealed the way forward for the market.
According to Ruhul, who can also be a portfolio landlord with business, residential and HMO properties, there are extra tumultuous adjustments to come back.
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“The dawn of 2024 heralds a challenging yet dynamic landscape for landlords and renters alike,” mentioned Ruhul, who can also be identified by his moniker, the ‘Big Silver One’ in the actual property sector.
(Image: Jam Press/@lordsonsestateagents)
More landlords will sell-up
A whopping 25% of landlords have expressed intentions to promote a property by August 2024, in keeping with a report by Lordsons.
Soaring mortgage charges proceed to squeeze them out of the market, minimising returns on investments, amongst different components corresponding to capital beneficial properties tax allowance.
Ruhul mentioned: “Given that the 2024 market landscape is expected to mirror the preceding year, it is unsurprising that landlords continue to weigh their options.
“While some landlords might endure, a possible deterrent is the additional discount of the capital beneficial properties tax allowance in April 2024, reducing from £6,000 to £3,000.
“In March 2023, the CGT allowance stood at £12,000 and these alterations have substantially heightened tax obligations for many landlords who have opted to sell recently.
“Despite these challenges, solely three per cent of landlords are planning property purchases in 2024, in keeping with our analysis.”
Renting will become even more expensive
Ruhul also predicts the cost of renting has hit a peak but will continue to rise in some areas but at a slower pace.
He said: “While additional escalations are anticipated in 2024, it’s evident that many tenants will face challenges in dealing with greater month-to-month rental prices.
“Data provided by estate agents indicates that average rental prices reached their peak in August 2023, gradually moderating throughout the remainder of the year.”
(Image: Jam Press/@lordsonsestateagents)
It’s all about politics in 2024
With the General Election anticipated to happen this yr, Ruhul says that is prone to have a huge effect on the way forward for the rental market.
Ruhul added: “Given the substantial number of landlords and tenants across the nation, politicians are likely to address various issues affecting the rental market, aiming to secure votes.
“The Conservative Party is anticipated to emphasize its dedication to advancing the ‘higher deal for renters,’ incorporating proposed rental reforms, as a part of their bid for an additional time period in authorities.
“Meanwhile, the Labour Party has outlined the prioritisation of ending Section 21 evictions, with hints of potential additional measures such as compulsory licensing and rent controls if they were to secure victory in the election.”
Anyone trying to purchase or hire a house ought to pay shut consideration to new insurance policies and laws put ahead.
Such because the Renter’s Reform invoice, launched in May 2023, which outlined intentions to ban Section 21 evictions, simplify the method for tenants to request permission for pet possession, and get rid of fixed-term tenancies.
Since its introduction, the invoice has progressed by way of a primary and second studying, together with a committee stage.
Ruhul mentioned: “Prior to the committee stage, there was a notable reversal by the government: Section 21 evictions will not be eliminated until reforms are made to the justice system.
“In 2024, there may be the potential for these proposed reforms to maneuver nearer to turning into legislation.
“The upcoming general election may introduce further delays and uncertainties.”
(Image: Jam Press/@lordsonsestateagents)
Energy payments = rental issues
Ruhul says that power effectivity and the price of payments are additionally prone to be an element.
In September, the Prime Minister unexpectedly introduced the abandonment of proposals to lift the minimal power effectivity commonplace for rental properties in England and Wales.
This introduced aid to landlords involved in regards to the potential prices of updating properties. But Ruhul says these upgrades are nonetheless on the agenda.
He mentioned: “The persistent challenge of rising energy bills for both landlords and tenants, coupled with the escalating concerns about climate change, makes the issue pertinent.”
Tax will go up, however rates of interest will stabilise
The property agent additionally predicts tax prices will hold rising.
He claimed: “Despite the National Insurance tax break for full-time landlords announced in the Autumn Statement, the combination of frozen income tax thresholds and the repercussions of Section 24 changes will result in an ongoing increase in HMRC bills for many landlords in 2024.”
But, Ruhul believes that rates of interest will stabilise this yr.
He mentioned: “While interest rates have shown some stability, the observed increase in mortgage repayments highlights the nuanced challenges that landlords continue to face in managing their financial obligations within the property market.”
In 2023, further selective licensing schemes have been launched.
The development is about to proceed in 2024, with ongoing consultations for brand new schemes at present underway, in keeping with Ruhul.
He mentioned: “This indicates an increased focus on refining and expanding licensing frameworks for landlords, suggesting a proactive approach to addressing housing and community-related concerns.
The estate agent revealed that regulation for the short-term lets market is currently in the pipeline.
He says this is to address concerns related to property usage, community impact and the overall functioning of the short-term rental market.
Finally, Ruhul anticipates buy-to-let mortgage rates will continue to gradually decrease.
He concluded: “Landlords who remortgaged in 2023 encountered notably greater month-to-month repayments, and this development is anticipated to persist for these renegotiating offers or increasing their property portfolios in 2024.”
* This article was crafted with the help of an AI tool, which speeds up Daily Star’s editorial research. An editor reviewed this content before it was published. You can report any errors to starletters@dailystar.co.uk