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How portfolio landlords can get the best out of 2024

by Uma
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How portfolio landlords can get the best out of 2024

 

Author: Jonathan Daines, Founder and CEO, lettingaproperty.com 

Landlords who own multiple properties in the UK have revealed an overwhelming positive feeling about the year ahead. Having reached out to more than 300 multi-property landlords, the lettingaproperty.com portfolio landlord survey found that 78% of respondents plan to maintain or grow their property portfolios during the next 12-24 months. 

The figure highlights landlords’ resilience, particularly given the property and mortgage market turbulence of 2023, as well as the broader economic picture. Landlords are, it seems, looking ahead to a more stable market, which is why many of those who own multiple properties will be implementing the following recommendations in 2024.

1. Leverage market trends and geographical opportunities 

Regional property market variations can present some excellent opportunities for landlords. Regeneration areas are likely to be of particular interest to those seeking to grow their portfolios in 2024. By tapping into the right market at the right time, landlords can benefit from localised demand to increase their return on investment (ROI). 

2. Diversify property portfolios

As well as regional opportunities, landlords looking to get the best out of 2024 need to think carefully about the types of properties they own. Houses in multiple occupation (HMOs), for example, have the potential to deliver higher yields than traditional rental properties. This year looks to be an excellent time to think about diversification and take a strategic approach to balancing risk in order to protect against market shifts. 

3. Review property management strategies

Portfolio landlords also have an opportunity when it comes to the way they manage their properties. There are significant cost variations in the market between traditional high street property management agencies and online services. For those with multiple properties, there can therefore be much to gain by moving services online, even while ensuring compliance with current regulations and alignment with tenant expectations. 

4. Take out appropriate legal and financial protection

No landlord should put themselves at risk by not taking out the appropriate insurances. Rent protection, legal cost cover and landlord insurance combine to provide peace of mind and protection from unexpected bills. This is something that becomes increasingly important the more properties a landlord has in their portfolio. 

5. Stay one step ahead of incoming legislation

The Renters (Reform) Bill is set to reshape many elements of the lettings sector in the UK, meaning landlords need to get ahead of it before it becomes law. The bill proposes, amongst other things, abolishing ‘no fault’ evictions and transitioning to periodic tenancies. While the timescale for the bill’s passing isn’t clear yet, there is little sense in waiting around and leaving preparation for it to the last minute. 

6. Prepare for taxation changes

It’s not just the Renters (Reform) Bill that landlords need to prepare for. From April 2024, Capital Gains Tax (CGT) thresholds will change. This means that landlords who sell off parts of their portfolio may end up paying a higher rate of CGT. As such, multi-property landlords need to think strategically about the cost of selling versus the cost of maintaining their portfolio. 

7. Focus on sustainability 

When we surveyed renters back in late 2021, a whopping 98% of respondents advised that they would prefer a greener home. Sustainability is clearly a selling point, both from an eco-conscious perspective and because a more energy efficient property can mean lower utility bills. Portfolio landlords who tap into this trend in 2024 could potentially increase rents and yields as a result. 

Managing a property portfolio in 2024

In addition to the above, landlords need to consider wider market factors. January 2024 saw UK house prices rise at their strongest rate in a year, with Nationwide reporting a price increase of 0.7% in the month. While nobody is expecting prices to soar in 2024, there is certainly now room for cautious optimism. 

Another factor impacting portfolio landlords is the fall in fixed mortgage rates. Recent market insights from Anderson Harris point to lenders cutting fixed mortgage rates based on “where the markets think the future base rate will be.” 

If prices have bottomed out after the turbulence of 2023, and lenders are offering rates that anticipate base rate falls in 2024, this could be the ideal time for portfolio landlords to snap up a property bargain.