UK Lettings and Rental Home Predictions for 2024

UK Lettings and Rental Home Predictions for 2024.

The UK rental market is – and always has been – shaped by economic, social and legislative factors. In this blog post, we delve into the current state of the UK lettings and rental home market, and explore what recent data, expert analysis and emerging trends indicate for the year ahead.

Economic factors

The UK economy has been through significant upheaval in the last few years. Brexit, the COVID-19 pandemic and global events have all played their part. In 2024, we predict the lettings market will be influenced by three factors.

Interest rates and mortgage availability

Interest rate decisions made by the Bank of England can significantly affect the property market. Higher interest rates push up the cost of borrowing. With mortgages costing more, potential buyers may delay their purchase, increasing the demand for rental properties. Conversely, if interest rates fall, we could see a buyers’ market developing, potentially stabilising rental demand.

Employment rates and wages

The health of the job market is crucial for the rental sector. Higher employment rates and rising wages can lead to a sense of financial security. More people can afford to live independently, pushing up demand for rental properties. However, if the job market falters or wage growth does not keep pace with living costs, individuals seek more affordable living arrangements such as sharing.

Inflation and cost of living

The cost of living crisis is continuing. Tenants spending more on the basics have less to spend on rent, putting downward pressure on rental prices or increasing the demand for smaller, less expensive properties.

Legislative factors

Several legislative changes that could significantly impact the rental market in 2024 have been proposed or are already going through Parliament.

Renter’s (Reform) Bill

This much-debated legislation should, according to the Government, create a fairer housing market and give tenants more security and flexibility. However, changes that benefit tenants could negatively impact landlords. Perceiving an increase in risk, they may increase rents and be far more selective when agreeing to a tenancy.

Energy efficiency regulations

The UK’s commitment to reducing carbon emissions could see tighter regulations on the energy efficiency of rental properties. Landlords needing to boost their properties’ energy performance, could increase rents to cover the cost of the improvement works.

Actions for success in 2024 and beyond

We expect that 2024 will bring both changes and challenges for the property rental sector. Economic factors will always influence the market, but we are in an era of evolving tenant preferences and technological advancements. Landlords and property managers who embrace digital solutions, prioritise sustainability and have a flexible approach to rental agreements will have an advantage.

‌The demand for high-quality rental properties is expected to remain strong, particularly in urban centres and areas with robust job markets. Owners who enhance their properties will be in a strong position to attract and retain tenants in this competitive market.

‌There are always uncertainties, but the key takeaway is that by staying informed, proactive, and responsive to market dynamics, landlords can position themselves for success. Think agile and adaptable, and whatever 2024 has in store, you should be well-equipped to thrive.