Whether you’re a prospective landlord or already have an established portfolio, it is important that you understand any changes in the UK rental market that could affect you and your tenants. After all, being a landlord comes with its own challenges and responsibilities, many of which have changed and evolved dramatically over the past few years, and even months.
In this piece, we’ll be covering the four most important changes that the rental market has seen in recent times – increasing rents, rising evictions, new legislation and greater demand for sustainability.
Rental Prices Are Increasing
At the time of writing, rental prices are the highest they have ever been, with Rightmove stating that asking rents for new tenants outside London have reached a record high of £1231pcm. London rents have also soared over the same period as demand for city centre living has increased throughout the UK.
Such huge hikes in rental prices make it more important than ever for landlords to carry out portfolio reviews with a local trusted agent. After all, you could be significantly under-charging your tenants if you have not increased your rents in line with inflation, which could see you fall behind on your buy to-let-mortgage or reduce your return on investment. Similarly, you could have overstepped the mark by issuing an unjustified rent increase that may be difficult for your tenants to pay, especially in the current cost of living crisis. It is highly recommended that landlords enlist the help of a local property professional to evaluate their portfolio of properties and ensure that the rents being charged are appropriate.
Renters Reform Bill And Decent Homes Standard
Perhaps the most significant changes in the lettings landscape are the upcoming changes to legislation, namely the Renters Reform Bill and Decent Homes Standard. These bills will overhaul the current lettings system by introducing a new set of recommendations, including:
- The abolition of Section 21 ‘No Fault Evictions’
- Strengthened grounds for repossession against rogue tenants
- A move to periodic tenancies as standard
- No discrimination against tenants with pets, children or claiming DSS
- A minimum requirement for all homes to be reasonably modern, warm and with basic services and facilities
These regulations will impact landlords drastically, and research conducted by Rightmove has indicated that approximately one third of UK landlords are concerned by changes to lettings legislation and altering compliance. The vast majority of landlords will have nothing to worry about when it comes to the Renters Reform Bill and Decent Homes Standard. However, it is worthwhile staying up to date with the latest news and updates when it comes to these important pieces of legislation – you can be rest assured that the Centrick team will update our guidance accordingly.
Evictions Are Rising
Rental evictions increased by 98% between 2022 and 2023 as a result of increased difficulties with tenants paying their rents. As affordability for rental properties is worsening, many tenants are missing rent payments or coming up short when it comes to paying their landlords. As a result, landlords are left with little choice but to issue Section 21 notices to their tenants to evict them, with a lack of rental income putting their buy-to-let mortgages and personal finances in jeopardy.
But how does this impact landlords, and how can you mitigate the impact of increasing evictions? Nowadays, it is more important than ever to utilise reliable tenant referencing to assess your tenant’s affordability. This is why many landlords are choosing to delegate this work to letting agents rather than taking on tenant referencing themselves.
Sustainability Becomes More Pressing
Across all sectors of the UK rental market, sustainability is becoming a more pressing issue – and property is no exception. Legislation is due to arrive in 2025 making an EPC rating of C or above mandatory for all new tenancies. In 2028, this will be applied to all tenancies, not just new ones. This forms part of the government’s work to reach its net-zero targets, but undoubtedly puts pressure on landlords to make the necessary amends to their properties to ensure they reach this minimum EPC requirement.
It seems as if this pressure on landlords is mounting quickly. Evidence suggests that 33% of landlords who own properties with poor EPC ratings intend to offload these units from their portfolio rather than work to improve their ratings. If you are hoping to make the recommended amendments to your property to improve its energy efficiency, it is vital that you start sooner than later – after all, these changes could be expensive. Your EPC will have a list of suggested changes you can make to improve your property’s EPC rating, and these may include:
- Improvements to insulation
- Window replacement
- Installing LED light bulbs
- Ordering a smart meter
- Upgrading your boiler
In short, it has never been more important to understand the changing face of the UK rental market. Having a trusted, experienced local agent on your side can make all the difference when it comes to making sense of this increasingly complex property landscape. That’s why the Centrick team are on hand to help all of our landlords navigate the UK rental market with ease, meeting its challenges head on to produce fantastic results for your portfolio. Centrick are now offering landlord compliance health checks to give you peace of mind that your rental properties comply with existing and upcoming regulations. To book a compliance health check with the Centrick team, simply fill out the form below.