In Focus (2024 Qtr 4): Disputes, diversification and the planning process

For this edition of In Focus, over 1,200 landlords participated in an on-line survey. Questions ranged across several topics and included the necessary fieldwork for the Landlord Confidence Index, which can be found here.

The fieldwork was conducted from December 5th 2024 – January 6th 2025.  There were responses from over 1,200 active landlords with a property portfolio focused in either England or Wales. In addition to views on confidence, the survey explored:

• Tenant disputes and resolution 
• Diversification and property development 
• Thoughts on the recent Budget and how future fiscal events may shape landlord thinking.
   

Landlord confidence edged upwards following the RRB-plunge in Quarter 3. Right across England confidence rose (although use of the phrase 'rebound' would be an exaggeration of the increase). Confidence in Wales continued to slide in the opposite direction, but remians above that of landlords in England.

This was still the second lowest (compared to the lowest) confidence score recorded since the Landlord Confidence Index (LCI) began in 2019. 

At the same time as this small move upwards, landlords were continuing to reduce, and reluctant to increase, their portfolios. A recent mini trend in landlords freezing, and not increasing, rents has continued.

More detail on the LCI can be found both in the report and here.

With the prospect of a new Ombudsman service on the horizon, landlords were asked how any tenant disputes and reports of faults and repairs were presently acted upon.

Over 70% of landlords stated their tenants had not raised any maintenance or property management issues with them over the last twelve months.

Where issues have been reported, just 3% of landlords reported an escalation by the tenant. The evidence presented underlines the reality that most defects and property issues are dealt with satisfactorily without the need for a referral elsewhere.

The NRLA took this opportunity to ask landlords to share their thoughts on the first Budget Statement of the new government. This was also a chance to revisit landlords’ views on how future tax changes may influence key decisions on their business. 

Capital Gains Tax (CGT) is having an increasing influence on the thought process of landlords, though less so on more recent landlords. CGT increases will make it more likely landlords will sell and reduce their portfolio. 

This may be something of a shift – in the past there has been some evidence that increasing CGT will lead to landlords holding onto property longer - follow this link for an example. Now, in this RRB-world however, just 8% of landlords stated they would be less likely to reduce their portfolios were CGT increased. 

Though not Budget 2025 related, the report also revisits landlord views on Inheritance Tax (IHT). The research finds a high proportion of landlords yet to consider inheritance and estate planning issues, whilst other landlords have taken a decision to not take any action at all. This has been a consistent feature of NRLA research on estate planning.

Two aspects of diversification are considered: Firstly the NRLA collected the views of landlords who have some experience of property development. The focus for the conversation being on the planning process and barriers to development.

Secondly, landlords were asked whether landlords were pursuing or considering pursuing commercial letting as an alternative to residential letting.  Some key barriers are discussed alongside identification of various groups of landlords who may be more, or less, likely to let commercial property.