Rental Market Forecast 2024

Rental Market Forecast 2024

Rental Market Forecast 2024

What’s going to happen to the rental market in 2024?

More landlords left the Private Rented Sector (PRS) in 2023 – many due to the prospect of further regulation at the hands of the Government.  Let’s ask ourselves, “What’s going to happen to the rental market in 2024?”

The long-awaited Renters (Reform) Bill – widely seen as anti-landlord legislation – was finally introduced in May.  It had its Second Reading in October. However, perhaps its most controversial measure – the abolition of Section 21 (so-called ‘no-fault’) evictions – was paused until plans to improve the court process have been successfully implemented.

The Bill – which also proposes the abolition of Assured Shorthold Tenancies as well as additional regulatory obligations for landlords – is currently awaiting its Third Reading in the Commons before going through a similar process in The Lords. It is not expected to become law until the Spring with the earliest possible implementation of measures by Autumn, 2024.

Forced rents up

On the financial front last year, high-interest rates for buy-to-let mortgages put pressure on existing landlords.  High-interest rates discouraged new landlords from coming on-stream. And the chronic shortage of available accommodation and the high demand from prospective tenants forced rents up all over the UK by an average of 8.9%, according to the Homelet Rental Index for November.

It is difficult to see an end to rent rises this year although Government action to tempt more first-time buyers out of rented properties and into the property-owning market might go some way towards alleviating the situation. Some industry forecasters have argued that Chancellor Hunt’s Autumn Statement could have done more in this regard limiting his measures to a minimum wage rise, the national insurance cut for employees and further adjustments for the self-employed.

Rates follow suit

It is widely predicted that supply shortages are likely to continue next year and rental growth will outpace wage growth – Zoopla forecast a rental increase of 5-6% throughout the UK in 2024. But the Bank of England has said that if inflation continues to fall, base rates will decrease alongside. If mortgage rates follow suit, more tenants will be tempted into the buyers’ market, easing pressure on supply.

Additionally, BTL mortgage rates have been steadily trickling down.

But earlier this month, LendInvest significantly reduced its BTL rates to start from 3.79%. Halifax, Leeds Building Society and Bluestone Mortgages are among other lenders who have also cut rates.


Despite a tough last year, some 74% of buy-to-let landlords are optimistic about the property market in the next 12 months, according to The Mortgage Lender.

Their study reveals that of the optimistic landlords, some 27% are actually expressing very high confidence.

For landlords who are hoping to expand next year and are well-capitalised, there will be opportunities with well-motivated sellers for whom ‘cash will be king.’

For those thinking of selling, remember the Capital Gains Tax-free Allowance drops again in April from £6,000 to £3,000.

To sum up

Demand for rental properties will remain high. Rents will continue to rise although perhaps more slowly if landlords feel the benefit of falling buy-to-let mortgage rates and more would-be homeowners find themselves in a position to buy. The predicted continued fall in inflation would support further cuts in BTL mortgage rates and further reduce rises in maintenance costs.