What should landlords do with their buy to let in 2024?
We provide guidance on recommended actions for landlords with buy to let properties in 2024
This really depends on what your objectives are for your property or portfolio in 2023.
If you’re looking to sell, you have two choices.
You could cash in now, accepting that the ‘froth’ has come off the market and you may have to sell for slightly less than the property would have been worth last year.
However, with Section 21 still in place, you can legally ask the tenant to leave.
On the other hand, if the investment returns still stack up well and you can keep letting the property at a good level of rental income, you could wait until the market picks up again in order to maximise the value when you sell – which is likely to be from 2025.
But it might be better to sell sooner rather than later. Property prices aren’t expected to recover for a few years – and things may get worse than forecast if there are further shocks to the economy.
If you’re planning to hold your investment and own it outright, then you may just see good increases in your rental income. However, it’s important to be aware that your tenants may be feeling the financial squeeze.
That might mean they simply won’t be able to afford any rent rises or, worse, they may get into financial difficulties and not be able to pay your rent at all.
Read our article for advice on how to increase the rent to align with market levels.
For landlords looking to expand their portfolio, 2024 may be a good year to secure a few bargains from motivated sellers.
The gap between stock and tenant demand is highly unlikely to close any time soon, and if government plans to allow houses to be turned into flats via permitted development (rather than having to apply for full planning permission) move ahead, there may be additional investment opportunities.
If you are renovating or upgrading a property, do continue to make sure you drive as good an EPC rating as possible.
Although the pressure of a minimum ‘C’ rating deadline is off for now, this is likely to change again in the future.
Making improvements both while you renovate and over time, can spread the cost of works and help avoid any supply issues that might crop up nearer the time of any new rules coming into force.
And don’t forget, it’s a great way to attract and keep the best tenants as they will have lower utility bills and be more likely to be able to afford your rent.
For ideas and advice, see our ultimate guide to having an eco-friendly property.
Despite everything that’s happened in the economy over the last few years, property has proved to be more resilient than expected and forecasters are positive about the future of the market.
However, the economy is not out of the woods yet, and with a general election coming up in the next 12 months and the contents of the Renters (Reform) Bill still being hashed out, there could be more upheaval ahead for the private rented sector.
The most important thing for you as a property owner and landlord, is to focus on what’s happening in your local market and try to ignore any ‘shock’ headlines that we’re bound to see over the coming year.
National averages and broad statements about what’s happening in the country as a whole might bear no relation to what’s happening on your doorstep.
As always, the best way to make sure your own investments continue to meet your financial objectives is to work with qualified agents in your area that are dealing with buyers, sellers, landlords and tenants every day.
Keep track of your returns, making savings and rent increases when and where you can, and stay in touch with your local experts, who can help make sure you’re in line with – and ideally beating - local averages for yield and prices.
For more advice read our ‘Ultimate guide to buy to let property investment’.
