With the Renters (Reform) Bill set to empower private rental tenants making its way through the legislative process and the Budget on the horizon, residential landlords, reportedly exiting the sector despite spiralling demand for homes, no doubt have their eyes currently set on the government. Here, we take a look at what’s potentially on the horizon for landlords.

There was certainly some good news for renters as one index recorded a rental drop for the third consecutive month although this needs to be considered in context against two years of rising prices which in reality translates to an average rent increase of £200pcm compared to February 2022.

The HomeLet Rental Index revealed rents dropped by -0.6% in January after a fall of -0.9% in December with London seeing the biggest decline at -2.2%. However, rental prices remain +7.51% compared to February 2023, and a whopping +18.4% since February 2022.

However, the marginal declines are exactly that and need to be viewed against the wider economic landscape although tenants will be happy with some easing on financial resources and landlords will welcome the likely corresponding fall in defaults.

Meanwhile, the rental index from Goodlord shows an increase in rents in Greater London up 1.8% in January equating to an average monthly rental of £1,968. In other regions, increases include the North-West up 1.5% month-on-month.

For landlords, though, the most attractive property investment for this year is in student housing, according to a report ‘Opportunities and Outlook; the future of commercial property’ from mortgage lender Together.

The study found that almost a quarter (23%) of landlords thought student housing would make the most appealing property investment over the next 12 months with housing developments (21%) second on their list and luxury residential properties voted for by 19% and in third place.

Property developers, landlords and investors, though, highlight inflation (30%) and high interest/mortgage rates (27%) as the biggest challenges to plans this year.

Meanwhile, landlords await the Renters (Reform) Bill, now in its report stage, which aims to rebalance the relationship between landlord and tenants providing the latter with more protection. Conservative MP, Anthony Mangnall, has tabled a series of amendments with the backing of colleagues calling for additional measures to help support landlords to engender confidence in the sector especially as the housing shortage will be further exacerbated should landlords exit as a result of new regulation.

In the run up to the budget on 6 March, the National Residential Landlords Association (NRLA) has calculated that increasing the supply of privately rented homes would provide the government with a windfall of around £10 billion, equivalent to almost the entire Affordable Homes budget.

With research suggesting that each property available to rent attracts an average of 11 prospective tenants, the independent analysis by Capital Economics reveals that increased income and corporation tax receipts amounts to around £10 billion over the same period, equivalent of almost the entire £11.5 Affordable Homes Programme budget for 2021-26.

The modelling also shows how rescinding the three per cent stamp duty levy on the purchase of additional homes could well result in 900,000 new privately rented homes made available across the UK. The NRLA is calling for the Stamp Duty Levy to be scrapped in the Budget.