As a property expert, I’ve witnessed firsthand the challenges and rewards of renting out properties. With the evolving landscape in 2024 (and as we begin to approach 2025) you may be asking, “Is being a landlord still worth it?” The short answer is—it depends on your situation and personal circumstances. So, let’s explore both sides of the coin.
The Rewards of Being a Landlord
For many landlords, property investment continues to be a long-term wealth-building strategy. Property generally appreciates over time, providing substantial capital growth. Rental income, while not without its fluctuations, remains a stable source of income when managed effectively.
Demand is higher than ever
Additionally, with the demand for rental properties on the rise—especially as affordability challenges continue for first-time buyers—landlords are often in a strong position. This makes buy-to-let an appealing option, especially if you own properties in high-demand areas.
According to Rightmove, there are now an average of 13 households competing for each rental property, while Zoopla estimates this figure at 15. Meanwhile, Savills has forecasted that up to one million new homes for private rent will be needed across England and Wales by 2031 to meet growing demand.
Significantly more autonomy
Another benefit is control. As a landlord, you have significant autonomy over how you run your portfolio, including which tenants you accept, how you manage your properties, and how you deal with maintenance. For those who like being hands-on, this level of control can be empowering.
The Challenges
However, the challenges in 2024 are notable. The cost of being a landlord has risen due to higher interest rates, which impact buy-to-let mortgage repayments. Coupled with Section 24 tax changes—limiting the ability to deduct mortgage interest from your tax bill—profit margins have shrunk for many.
Increased regulation
There’s also the increased regulation in the rental market. The proposed Renters’ Rights Bill promises stronger protections for tenants, and while this is necessary for a fairer system, it can make management more complex. Compliance with new rules, from energy efficiency standards to safety regulations, requires more time and investment.
Having a buffer
Landlords now must be savvier with their finances, ensuring they have a buffer for unexpected costs like repairs, void periods, or legal issues. Additionally, some landlords are finding the administrative burden overwhelming, especially when managing multiple properties.
Incorporation vs. Personal Ownership
One key trend for 2024 is the shift towards incorporating buy-to-let businesses. Many landlords are opting to set up limited companies to hold their properties, a strategy that offers significant tax advantages, including the ability to deduct mortgage interest costs and benefit from lower corporation tax rates.
While incorporation isn’t a one-size-fits-all solution (it comes with upfront costs like Stamp Duty and Capital Gains Tax), it’s worth considering, especially if you’re planning to expand your portfolio.
So, Is It Worth It?
For seasoned landlords with strong cash flow, 2024 can still be profitable—especially if you leverage the right strategies, such as incorporation, focusing on high-demand areas, and ensuring compliance with new regulations. However, for new landlords or those heavily reliant on mortgage financing, the current climate could make profitability harder to achieve.
Ultimately, being a landlord in 2024 is about careful planning, risk management, and adaptability. If you enjoy the process and can navigate the regulatory and financial challenges, it’s still worth it. But it’s not as easy as it used to be, and it’s essential to reassess your goals and strategies regularly.
If you’re feeling uncertain, I recommend speaking to a property expert to understand your options fully and explore how you can still thrive in today’s market. As always myself and my team are on hand to discuss all aspects – and just as a reminder – we now have a dedicated (Whole market) Mortgage adviser in house that can advise on re-mortgaging and income strategies to ensure you are getting the most out of your current property investment strategy.
