Ruhul Shamsuddin, founder of Lordsons Estate Agents, warns of a turbulent year ahead for renters and landlords, with tax cuts, soaring costs and politics shaping the housing scene.
The UK rental market is heading into a stormy 2024, according to Southend-based estate agent Ruhul Shamsuddin – and both landlords and tenants could feel the squeeze.
Ruhul, who set up Lordsons Estate Agents and has spent over a decade in the property game, says this year’s market will be defined by tax changes, mortgage pressures and political manoeuvring.
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A Lordsons report shows a striking trend: a quarter of landlords plan to sell at least one property by August 2024. The culprit? Rising mortgage rates, which are eating away at returns and forcing many out of the market.
Add to that the capital gains tax allowance being slashed from £6,000 to £3,000 in April – down from £12,000 just a year earlier – and it’s clear why landlords are weighing their options.
“Given that the 2024 market landscape is expected to mirror the preceding year, it’s unsurprising that landlords continue to rethink,” Ruhul said. “The capital gains tax allowance reduction poses a real deterrent.”
Despite all this, only 3% of landlords are planning fresh property purchases in 2024.
For tenants, things aren’t looking much easier. Rents are expected to keep climbing, though the pace of growth might slow.
Average rental costs peaked in August 2023 and eased off slightly by year’s end, but Ruhul warns of “further escalations” in 2024, stretching already tight budgets.
Politics is also set to play a starring role. With a general election looming, housing is firmly on the agenda.
The Conservatives are pushing a “better deal for renters” through reforms, while Labour wants to scrap Section 21 evictions and could go further with rent controls and licensing if they win power.
The much-talked-about Renter’s Reform Bill – first introduced in May 2023 – aims to end Section 21 “no-fault” evictions, allow easier pet ownership and scrap fixed-term tenancies.
But after government backtracking and delays tied to justice system reforms, its future in 2024 is far from certain.
On energy, Ruhul notes one piece of relief: landlords won’t have to meet new minimum energy efficiency standards after plans were scrapped in September. Still, he believes efficiency upgrades are inevitable in the long run, especially with rising bills and climate concerns.
Tax burdens are another headache. While some landlords may benefit from a National Insurance cut, frozen income tax thresholds and Section 24 mortgage relief changes mean HMRC bills will continue to grow.
There is, however, some cautious optimism. Ruhul expects interest rates to steady this year and predicts buy-to-let mortgage rates will gradually fall – though landlords remortgaging now still face steep repayments compared to previous years.
Selective licensing schemes, expanded in 2023, will remain a focus in 2024, and new regulations for short-term lets are on the way. Both signal tougher oversight for landlords as councils respond to housing and community pressures.
Summing up, Ruhul – known locally as the “Big Silver One” – says 2024 is shaping up to be a “challenging, nuanced year” for the rental market.
For both renters and landlords, keeping an eye on political promises, tax rules and energy costs could prove just as important as finding the right property.
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