"It’s clear the status quo isn’t working. The government has some work to do to regain the trust of landlords."
- Bea Montoya - Simply Business UK
A new report from landlord insurance provider, Simply Business, reveals an uncertain future for the UK rental market, as landlords struggle to navigate an onslaught of confusing legislation and soaring costs. The report, which surveyed nearly 2,000 landlords across the nation, lifts the lid on how landlords are feeling about the year ahead.
Crisis of confidence and complexity of regulation
71% say they think the new Government will have a negative impact on the buy-to-let market, with 51% of this group emphasising that they think it will be ‘very negative’.
A staggering 69% of landlords identified constantly changing and confusing government legislation as their biggest challenge. This marks a notable increase from previous years, reflecting growing frustration within the sector, and lays down the gauntlet for the new Government.
Despite a bleak backdrop, rental demand remains high, and this important sector shows its resilience once again. Although just 41% say they think letting a property is a worthwhile investment, 62% say they don’t plan to sell up in the next 12 months.
Landlords reveal Renters’ Rights Bill fears
When it comes to the Renters’ Rights Bill, most welcome the increased standards across the market, though again – there’s a worrying lack of clarity. 69% fear necessary evictions will be more expensive and time-consuming, with 62% saying they expect the removal of Section 21 will encourage landlords to sell up.
32% of tenants have lived in their rented accommodation for more than five years, demonstrating that landlords continue to provide much-needed, long-term housing for nearly five million households nationwide.
Landlord, East Midlands: “I understand the need for regulations to protect tenants against unscrupulous landlords who are only concerned with profit, but I worry that the same regulations are impacting those of us who are desperately trying to provide good homes for nice people.”
Landlord, South West: “The government needs to realise that many landlords are good landlords and need support to stay in the market. We don’t need more costly controls levelled at the minority who are bad and don’t care about tenants.”
Rising costs considered a major threat
Rising costs are another major issue for landlords, with 38% reporting they consider them to be the biggest threat to the rental market. Over a third (35%) say they have seen monthly mortgage repayments increase, up from 31% in 2023. Of those, 10% have seen monthly repayments increase by between £500 and £1,000.
This concern is further compounded by the new minimum Energy Performance Certificate (EPC) regulations. Half of landlords need to make improvements to reach an EPC rating of C and over a third (34%) report they will need to spend up to £10,000 to comply with the rules. There’s more complexity here too – these EPC plans were scrapped by the Conservative government in September 2023, before the target was brought back by Labour with a new deadline of 2030.
Landlord, South East: “One problem with the energy efficiency regime is that the surveyors are wholly inconsistent and generally provide a poor-quality service. I have adjacent identical properties where one is rated D and the other is rated C.”
Bea Montoya, Chief Operating Officer at Simply Business UK said: “For landlords, 2024 has been defined by rising costs, ever-changing legislation, and the election of the new Labour government. The resilience of landlords - and the market - should not be underestimated, but we know thousands are struggling to navigate these challenges. While many are willing to batten down the hatches and try to weather the storm, others will be really questioning whether it’s affordable to stay in the market.
“It’s clear the status quo isn’t working. The government has some work to do to regain the trust of landlords. Winning this back will mean a concerted commitment to clarity around impending legislation, and as much support as possible to make these changes, in the forms of schemes and grants. Landlords are a vital part of the health and stability of the UK housing market, and must be treated as such to ensure we can create an environment that serves both landlords and tenants.”
