Is being a landlord still worth it

With slim profits and rising legislation surrounding rental market, there are claims that owning a buy to let is no longer rewarding.

Inflation and high interest rates have been eating into rental yields, which, combined with stringent legislation, have allegedly caused a number of private landlords to exit the market.

So, where does this leave those who are thinking about expanding their portfolios in 2024?

The first quarter of 2024 did see a sudden increase in buy to let purchasing activity, potentially brought about by an overall slump in house prices and indications that interest rates will soon drop.

In February, data from Paragon Bank revealed that 37% of portfolio landlords plan to expand their property portfolios this year. Mortgage interest rates are still high, but property prices have dropped slightly across the country. Those who are willing to take the financial hit to get a bargain are tentatively re-entering the market.

Andrew Bailey, Governor of the Bank of England, further confirmed that a base rate drop could be on its way: “Before our next meeting in June, we will have two full sets of data – for inflation, activity and the labour market – that will help us in making that judgment afresh…But, let me be clear, a change in bank rate in June is neither ruled out nor a fait accompli.”

Last year’s economic climate led to slow purchasing activity throughout the year, as both first-time homebuyers and property investors waited out high interest rates. However, some regions are proving more resilient in the current market, with property prices continuing to grow and rental markets flourishing with landlords still queueing to purchase property in 2024.