Home Property Scrapping Section 21 will be biggest challenge of 2024

Scrapping Section 21 will be biggest challenge of 2024

by LLP Staff Reporter
28th Dec 23 7:45 am

The latest research by Zero Deposit, the tenancy deposit alternative, has revealed that landlords across England and Wales believe the abolition of Section 21 evictions poses the greatest challenge in 2024 when it comes to the changes on the horizon as part of the Renters Reform Bill.

Zero Deposit commissioned a survey of 1,042 landlords across England and Wales to gauge their thoughts and feelings on the year ahead.

The research shows that, at present, the majority (89%) of landlords have between one and three properties within their buy-to-let portfolio.

When asked on their perceptions of the rental market for the year ahead, just 21% stated they were optimistic, 24% were pessimistic, however, 55% remained neutral.

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This sentiment was also echoed when asked on their plans to increase rents in the new year. While a quarter (24%) intend to increase rents, 68% will maintain them at current levels, while 8% intend to reduce them.

Zero Deposit then asked what they anticipate to be the biggest challenges in the year ahead.

With inflation yet to be fully tamed, the cost of maintaining, repairing and running their portfolio ranked top, followed by legislative changes.

Finding and retaining good quality tenants also ranked high along with higher interest rates for buy-to-let mortgages.

Finally, Zero Deposit asked which of the proposed changes to be introduced as a result of the Rental Reform Bill landlords believed would prove the most challenging.

The abolition of Section 21 evictions ranked top as the biggest potential challenge for landlords in 2024.

Limits to rental price increases and changes to notice periods ranked second, while greater rights for tenants when it comes to owning pets placed third.

Sam Reynolds, CEO of Zero Deposit said, “It’s clear that the Rental Reform Bill and the abolition of Section 21 evictions, in particular, remain a concern for many landlords. It’s seen as fundamental to protecting their property when significant issues arise and with so many factors now working against them, many landlords have reached their tipping point and have exited the market.

This comes at a time where more stimulus is needed to encourage landlords to invest in the sector, such as a more lenient tax regime. Without this, and in the absence of any meaningful progress in the building of new homes, the supply of rental stock will remain insufficient and rental prices will continue to rise in 2024. More bad news for the nation’s renters.

Landlords electing to not increase rents, despite a vast number of reasons to do so, speaks to an understanding of their tenant’s financial constraints. In many cases, and in my experience, this underlines the impact of a positive relationship between landlords and tenants with just a small proportion planning to increase rents in the new year.

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