2024 for Landlords

Landlords, as ever, are a pretty resilient group, and that’s why the Private Rented Sector remains a sizeable marketplace encompassing almost 20% of the UK housing stock (circa 5.5m properties).
(Source: English Housing Survey, 2022-23, released December 2023 – showing 4.6m PRS properties in England, and then a pro-rata calculation for all of the UK)

It’s understandable though, that landlords enthusiasm for this sector might have waned in light of all that’s been thrown at them over recent years – tax changes, increased regulations, and now higher fixed deal rates for those remortgaging this year. Yet whilst some may be leaving this sector, there are still positives to consider.

Demand remains

Almost two-thirds of landlords surveyed (63%) reported that demand continues to rise from tenants.
(Source: National Residential Landlords Association, Q4 2023, February 2024 release)

Average rental take is still healthy

Across the UK the average monthly rent was £1,260 (up 7.5% on Jan 2023), with sizeable regional variations. The highest return was Greater London at £2,081, with the rest of the UK averaging £1,059, and the North East delivering the lowest return at £655.
(Source: Homelet Rental Index report, January 2024)

Thoughts for 2024

Expansion continues to be on the agenda for more than half of the buy-to-let landlords. With 26% of landlords planning to add another single property to their roster, and another 26% plan to add multiple homes.

This is reflected by the positivity that exists in the market, with 74% confirming they have confidence in the residential property market for this year.
(Source: The Mortgage Lender, January 2024 research)

Limited Company status

According to Paragon Bank, three-quarters of landlords (74%) who intend to purchase a new rental property in the next year will do so under a Limited Company structure, as opposed to paying income tax as a private landlord.

Buying as a Limited Company offers a number of tax benefits. It allows landlords to deduct mortgage interest from company income and pay tax at Corporation Tax rates, rather than an individual landlord’s personal income tax rate.

The structure can also offer more favourable mortgage financing options. Paragon said that most lenders set interest coverage ratios at 145% for higher-rate taxpayers, whereas Limited Company applications require a ratio of 125%. They can often get higher loan amounts too.
(Source: Paragon Bank, September 2023)

However, it won’t be the most suitable route for all, so do speak to your accountant and solicitor regarding the tax issues, and property structures. And we’re there to give an overview, and to assist with sourcing suitable deals.

And, if your deal rate is ending this year

With around 240,000 fixed rate deals for landlords coming to an end this year, we’re here to help you through this process.
(Source: UK Finance, February 2024)

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income will be sufficient to meet the costs of the mortgage.
The value of your Buy-to-Let property and income from it can go down as well as up. You may also require advice on the legal and tax issues.
The Financial Conduct Authority does not regulate legal and taxation advice, and most Buy-to-Let mortgages.
HM Revenue & Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Your property may be repossessed if you do not keep up repayments on your mortgage.