The government's Renters Reform Bill is likely to steal the headlines, but uncertainty remains as to the future of no-fault evictions.
Add in the recent shelving of long-planned energy-efficiency changes, higher rent costs and the likelihood of more landlords selling properties, and it's sure to be a tumultuous time for both property investors and renters.
Here, we delve into 10 things landlords and tenants need to be aware of as we enter the new year.
1. Tenants will be given new protections
The long-awaited Renters Reform Bill is progressing through parliament, with hopes that it could pass into law before the end of 2024.
In its current form, the Bill includes several key reforms for tenants.
New regulations will be introduced to determine how often rents can be increased, and tenants will be able to dispute excessive increases at a tribunal.
A new ombudsman will be brought in to resolve disputes between landlords and tenants more quickly, without the need for court action.
Finally, tenants will be able to request to keep a pet in rented properties, with landlords no longer allowed to issue bans on animals.
Find out more: .2. Section 21 eviction reforms have been delayed
There is one glaring omission from the changes being brought forward under the Renters Reform Bill in 2024 – a ban on Section 21 no-fault evictions.
The ban was originally proposed in the 2019 Conservative Manifesto and formed a central pillar of the Bill.
However, it's now been delayed due to the need to make changes to the court system and no timeframe has been provided.
Find out more: .3. Landlords won't be able to set blanket bans
In November, the government added amendments to the Renters Reform Bill to make it illegal for landlords and letting agents to place blanket bans on tenants who receive benefits or have children.
The government says that this will ensure families and vulnerable people aren't discriminated against.
The proposed changes concern England and Wales, but will be extended to Scotland later in the parliamentary process.
4. Landlords will need to adhere to new standards
In November, the government announced plans to apply a Decent Homes Standard to the rented sector for the first time.
Councils will be given enforcement powers to ensure landlords adhere to the new standards, which will be set after a consultation and debated as the Renters Reform Bill passes through parliament.
Landlords who fail to adhere will face fines of up to £30,000 and the prospect of banning orders. Affected tenants will be able to claim compensation of up to 24 months rent via rent repayment orders.
Find out more: .5. Rents are continuing to rise
A shortage of affordable rented housing and increasing costs for landlords resulted in the cost of renting rising significantly in 2023.
Data from the estate agency Hamptons International shows that rents increased by 10.2% year-on-year in November.
The biggest rises were recorded in Greater London (11.8%), the East of England (11.7%) and the Midlands (10.9%).
High rents look likely to remain in 2024. The estate agent Chestertons and property consultancy JLL both forecast that rents will rise by a further 5% in 2024.
6. Buy-to-let mortgage rates are dropping, but slowly
The average buy-to-let fixed-rate mortgage is currently priced at 6.02%, according to Moneyfacts. This is considerably cheaper than the 6.40% recorded a year ago, but almost double the average of 3.07% in December 2021.
7. Energy reforms have been scrapped
In September, the government shelved upcoming changes to energy-efficiency rules for rented properties.
The plans included requiring all new rentals to achieve Energy Performance Certificate ratings of 'C' by 2025 and existing rentals to achieve the rating by 2028.
The changes were likely to cost some landlords thousands of pounds, and there were concerns that these additional costs could be passed on to renters.
8. Landlords are still selling up
Earlier this year, buy-to-let profits dropped to their lowest levels since 2007, with net profits for landlords with mortgages dropping below 4%, according to Savills.
Data from Hamptons shows that almost 300,000 more rented homes have been sold off than purchased since 2016.
A recent survey by Confused.com found that 52% of landlords were concerned about upcoming reforms in 2024 and 10% were planning to sell up entirely.
9. Capital Gains Tax allowances will be slashed in April
Landlords selling buy-to-let properties in 2024 may face higher capital gains tax (CGT) bills.
In April 2023, the tax-free allowance for capital gains was cut from £12,300 to £6,000. From 6 April 2024, it will be halved to just £3,000.
Investors who sell properties will need to pay tax on profits above this threshold, after taxing allowable deductions into account (for example, selling fees).
The current CGT rates for property of 18% (basic-rate taxpayers) and 28% (higher-rate taxpayers) will remain the same in 2024.
Find out more:.10. Making Tax Digital has been delayed by two years
It will become mandatory for self-employed landlords with income of more than £50,000 from April 2026 and those with income of more than £30,000 from April 2027.
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