Mario Carrozzo:The Future of Rental Properties

by | Sep 11, 2023 | News

Mario Carrozzo is the founder and CEO of Caridon Group, an award-winning property lettings and development company that is dedicated to serving the communities in which it operates. Mr Carrozzo also pioneered one of London’s first rental guarantee schemes, and this article will look at current and predicted trends in the rental market.

Forecasting property prices is a delicate art that requires an in-depth understanding of the complexities of mortgage debt markets. Rental values are equally difficult to anticipate, but the key driver, namely the balance between supply and demand, is a little simpler to understand.

Following a tumultuous 12 months, buy-to-let landlords will be impacted by a variety of considerations, chief among them increased regulation, capital gains tax charges and rising mortgage costs. Nevertheless, although these factors may dissuade some from the buy-to-let market, there are still some considerable attractions, including high rental demand, lower average property prices and rising average rental prices.

According to research from Simply Business, as of March 2022, 49% of landlord respondents said they had sold a property in the preceding 12 months or were planning to sell in the future. However, the same report also revealed that 23% of landlords polled had plans to purchase another property in 2022.

Despite rising inflation and interest rate hikes, demand for rental properties remains high, with few signs of abating. Data gathered by Aviva indicates that up to a million people may rule themselves out of the first-time buyer market due to fiduciary pressures in coming months. As a result, experts predict that rental demand will remain high throughout 2023 and beyond.

Against a backdrop of rising interest rates and inflation came a controversial mini-Budget in September 2022, which sent mortgage costs shooting up. Analysts had always anticipated that interest rates would rise in 2022, but the Bank of England increased the base rate a staggering eight times, taking the base rate to 3.5% – far beyond expert expectations.

The financial markets have calmed following a turbulent 2022, with more buy-to-let products returning to the market. However, according to Moneyfacts, the average interest rate for fixed mortgage deals remains above 6%.

In terms of buy-to-let trends for 2023 and beyond, experts previously predicted an increased interest in energy efficiency in the face of the climate and cost of living crises – and indeed, with energy costs surging throughout 2022, keeping bills down through improved energy efficiency has been a priority for landlords and tenants alike in 2023.

Other factors tipped to impact the buy-to-let sector in the months and years ahead include landlord licensing schemes and increased government scrutiny of short-term lets following a significant increase in recent years.

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