If you have dreams of investing in a rental property and becoming a landlord you may be wondering if 2024 is the year you should make your move. Is the time and market right and do the benefits outweigh the risks?
Bargains To Be Had
The current market situation suggests it could be a good time to become a landlord, especially if you already have a property that you can let or enough spare cash to invest. Although interest in house sales is increasing, prices are not expected to start rising again significantly until 2025. That makes it a buyers’ market out there which also means there are bargains to be had - especially if you are a cash buyer looking to start or build a rental portfolio.
Consider Mortgage Rates
If you are investing in a rental property considering mortgage rates and how they are likely to change will be vital to your decision-making. These have been impacted by rising interest rates designed to curb inflation but the BofE’s decision to hold the base rate at 5.25% in February is driving optimism that the worst may be over and that interest rates, and subsequently mortgage rates, will be cut. However, you should also consider whether you would still be able to make your mortgage repayments if mortgage rates were to go up again.
Rising Rents
Rent price levels are also continuing to increase, up by between 5-6% in 2024 and seeing cumulative growth of around 20% or more over the next five years. As inflation settles this will allow for good levels of rental profit to be made. This is the result of a number of factors such as potential buyers holding off and instead renting until buying conditions improve or landlords leaving the market because of challenging conditions. Such factors have led to a shortage of rental properties as demand has consistently outstripped supply in the market.
But Beware Of Political Impacts
One thing to bear in mind, however, is the possible impact of politics on your plans to become a landlord in 2024. As well the Renters (Reform) Bill making its way through Parliament there is also the prospect of a general election at some point.
Housing and reform of the private rented sector are likely to be high on the political agenda and any changes could have a significant impact on market confidence.
As we’ve seen there are encouraging signs as to the health of the rental market despite the uncertainty that suggest that 2024 could be a good time to become a landlord, you just need to be cautious and make sure you understand all the possible implications.
Considering a leap into the world of property investment and becoming a landlord? With the current market dynamics in mind, now might be the opportune moment to take that step. If you're seeking guidance on navigating the nuances of letting in 2024, reach out to one of our Kings Group branches in Essex, London, or Hertfordshire today.
We also offer a free and instant online valuation to give you an idea of how much your home could be worth on the current market.
