As 2022 wraps up, landlords will be bracing themselves for new changes on the way and how they will impact the letting sector in the year to come.
Keeping up with industry changes, rules and regulations will help make sure you are ready for the year ahead.
With the current economic climate, planning and preparing for what’s in store has never been more crucial. Knowing what you need to look out for in the new year will help to reach goals and keep your business running at a steady pace.
These are our predictions for 2023.
Rental reform proposals to be implemented
The Rental Reform Bill has been in the works for quite some time now. However, 2023 could be the year it finally gets implemented. Housing Secretary Michael Gove has revealed the proposals will be brought before parliament in 2023.
Proposals to ban Section 21 ‘no-fault evictions’ will mean a tenancy can end only if the tenant ends it, or if the landlord has a valid ground for possession.
Plans to extend the Decent Homes Standard to private rented homes have also been included. Although landlords are obligated to review their properties regularly to remain compliant, this could add more pressure to improve homes.
Other changes include making it easier for tenants to keep pets in lets, ending arbitrary rent review clauses, and making blanket bans on renting to families with children or who have benefits unlawful.
With the government keen to ramp up legislation in the private rented sector, landlords will need to step up their game. We predict the legislative changes could drive more landlords out of the sector, but it could also help clamp down on rogue landlords.
Growth within the rental sector begins to slow
The Savills Rental Forecast predicts that ‘growth will slow to 6.5% next year, before slowing further beyond 2024 as renters return to spending a similar proportion of their earnings on housing costs as they did in 2014/15’.
Despite slowing down, demand for homes in the rental market is expected to remain high, driven by people’s decisions to rent as opposed to buy because of the status of the current economy. Therefore, the number of people wanting to rent will still outweigh the number of homes available, putting landlords in a strong position when it comes to setting rents.
Landlords are also likely to experience tenants remaining in existing tenancies for longer, as they avoid entering new agreements with higher rent.
Energy efficiency will be prioritised
With the Energy Price Guarantee set to change after April 2023 and the Energy Bills Support Scheme (EBSS) scheduled to close in March 2023 – currently both in place to protect customers from rising energy costs – tenants are likely to seek alternative ways to cut their costs.
Many tenants are now aware of the financial benefits associated with having an energy efficient property. Therefore, as the popularity of these types of homes increase, landlords who fit this mould by providing energy efficient homes will open themselves up to a larger pool of tenants.
Furthermore, Energy Performance Certificate (EPC) targets are set to rise to a C grade for new tenancies in all rented homes by April 2025. By 2028, this will then be applied to existing homes.
With EPC thresholds changing and tenants seeking energy efficient properties, more landlords will shift their focus on investing in low carbon homes with sustainable features.
At Howland Jones, we will do all we can to help you get the most from your rental properties. Our offices are based in the village of Measham in the East Midlands, and we operate within a 20-mile radius of our base, giving us extensive knowledge of the local area.
You can find out all about us by getting in contact here.