A Year in Review: UK Lettings Market 2024

As 2024 draws to a close, the UK lettings market stands at a pivotal moment, shaped by significant legislative shifts, economic dynamics, and the anticipation of the Renters’ Rights Bill in 2025. This year has presented both challenges and opportunities, leaving landlords, agents, and tenants with much to reflect upon and prepare for in the coming year.

Impact of the General Election

The 2024 general election proved to be a defining event for the lettings industry. Housing and rental reforms were high on the political agenda, with various parties proposing ambitious plans to address the ongoing housing crisis. The election’s outcome solidified the government’s commitment to delivering the long-awaited Renters’ Rights Bill.

While the legislation is still making its way through Parliament, its anticipated impact has already stirred many debates across the industry. The abolition of Section 21 “no-fault” evictions and the move towards assured periodic tenancies have created uncertainty for landlords, many of whom are re-evaluating their portfolios. However, tenants have welcomed the proposed reforms, which aim to provide greater security and protection in an increasingly competitive rental market.

Rent Levels and Affordability

Rent levels continued to rise in 2024, driven by a combination of high demand, limited supply, and economic pressures. According to recent reports from Zoopla, average rents increased by 3.9%, with pockets of fast-rising rents remain. Annual rental inflation stood at 10.5% in Northern Ireland compared with 1.3% in London.

The cost-of-living crisis has further strained tenant finances, leading to heightened discussions around affordability and the role of rent control measures with average annual rent on a newly let property being £3,240 more than at the end of the pandemic, says Zoopla.

In an analysis prepared for the BBC the portal claims rents began to soar in 2021 because of high demand from tenants after lockdowns were lifted and limited numbers of available properties. The annual cost of renting has gone up by 27% in those three years, compared with a 19% rise in average earnings.

For landlords, rising rents have been both a blessing and a challenge. While higher rental income can offset inflation and interest rate hikes, it also increases the risk of arrears as tenants grapple with affordability. Property owners are increasingly balancing financial goals with the need to maintain long-term tenancies, ensuring that rents remain sustainable for their tenants.

The Renters’ Rights Bill on the Horizon

With the Renters’ Rights Bill likely to become law by summer 2025, the industry has begun preparing for sweeping changes. The proposed measures, including the requirement for written tenancy agreements, the strengthening of renters’ rights, and the potential introduction of stricter energy efficiency standards under MEES, will significantly impact how properties are managed and let.

Here at Andrews, we are focusing on educating landlords about their evolving responsibilities and helping ensure compliance with upcoming regulations. We held two landlord events in 2024, one in Bristol and one in South London. Both had the aim of helping educate local landlords to ensure their property investments are protected. Within my role as President of ARLA Propertymark, I have travelled all over the UK speaking to over 1500 letting agents about the upcoming legislation and the importance of passing on knowledge to keep customers safe. The transition to a more regulated environment underscores the importance of fostering collaborative relationships between landlords, agents, and tenants.

Looking Ahead

As we head into 2025, the UK lettings market is at a crossroads. The legislative changes on the horizon signal a shift towards greater accountability and fairness, but they also require careful navigation to avoid unintended consequences such as reduced rental stock. By embracing innovation, fostering open communication, and prioritising adaptability, the industry can overcome these challenges and continue to thrive in an evolving landscape.

My advice for landlords in 2025 is to be aware of three things;

• Rent insurance - For landlords with concerns over whether their tenants have reached a ceiling with regards to their rent amount or for those who may be concerned about the removal of Section 21 and the possibility of large arrears building up before eviction can be secured, a robust Rent and legal product is essential to guarantee peace of mind. At Andrews for just over £1 a day, a landlord can protect their rent payments to ensure that if even if their tenant doesn’t pay, the policy will ensure their rent is received. It also covers all legal expenses should eviction be required.
• EICRs - For landlords, 2025 is a key year regarding Electrical Installation Condition Reports (EICRs). Under the current regulations in England, landlords must ensure that an EICR is conducted every five years or at the start of a new tenancy. Many properties that had initial EICRs conducted when the regulations began in 2020 will require renewal next year. Landlords should plan these inspections early to avoid non-compliance issues and the high demand for qualified electricians. Failure to comply with EICR regulations can result in fines of up to £30,000. Non-compliance could also invalidate property insurance, exposing landlords to significant financial and legal risks.
• EPCs - The government has announced an intention to increase the minimum EPC rating needed to let a property from an E to a C by 2030. Landlords should take next year to review their portfolios, undertake new EPCs if necessary and get advice from expert assessors on the best steps to take to improve their investment property ratings to ensure they can still be let after this time.

Conclusion

At Andrews in 2025, we continue to aim to help inform and protect landlords across the UK and will be announcing a series of webinars and seminars to help educate and inform. Our dedicated team of lettings experts will continue to uphold the highest standards in UK agency, along with giving back to our charitable owners.

To discuss any specific concerns please contact your local branch.