The end of 2024 gave a lot of landlords pause for thought when it came to their future in the housing market, and made several wonder if they should sell up or look for letting agents to manage their property instead.

The biggest catalyst of this was the Renters Rights Bill, which fundamentally changes several ways in which the private rental sector works.

This includes getting rid of no fault evictions, a limit to rent increases, a ban on rent bidding, a requirement to investigate health hazards such as damp, and a switch to indefinite rolling contracts instead of assured tenancies.

The sudden nature of the switch, which would apply to new and existing tenancies as soon as the law comes into force, has led some landlords to consider their positions, and whether they can afford to remain in the rental market.

This has been offset somewhat by an increase in rent, aided by increasing demand relative to supply.

Rent has increased on average by 40 per cent over the last five years, although there have been concerns that these huge increases are coming close to an affordability ceiling.

If rent increases too much relative to earnings, eventually nobody will be able to afford to live there and prices will need to reduce again.

At present, the increases are accepted, albeit somewhat begrudgingly in some sectors, but with the Renters Rights Bill limiting the number of increases per year to just one, it is unlikely that rent prices will increase at anywhere near the same rate.

With all of that in mind, should landlords sell up or should they stick with the market once the new legislation comes in?

The answer will vary dramatically. There has not been a major sell-off of properties as of yet, and whilst there is less of a bonanza in the market than has emerged in previous years, a lot of landlords might feel comfortable enough in the financial position they are in to remain in the market.

Similarly, landlords with good relationships to their tenants are unlikely to feel the effects of the Renters Rights Bill as acutely. After all, the intention of the law is to reduce bad actors in the sector, and landlords with loyal tenants will reduce the costs associated with turnover.

That typically comes with loyalty, which in turn is a result of meeting the needs of tenants, avoiding exploitative practices and being proactive when there are issues.

There are a lot of positives with avoiding no-fault evictions and the anxiety for both parties that it causes.

There are grounds for eviction, albeit with longer lead-off times, but this ensures that tenants and landlords can discuss potential ways to resolve issues and improve transparency.

It also improves the reputation of the entire sector, which in turn attracts tenants who enter the landlord/tenant relationship with a greater degree of respect knowing that an adversarial relationship hurts both parties.

At present, there has not been a landlord exodus, and whilst all landlords should explore the effects of the Renters Rights Bill, this is not necessarily a reason to throw out the baby with the bathwater.