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Rental market 2023: what landlords need to look out for

5-minute read

Row of houses in the UK
Conor Shilling

Conor Shilling

14 December 2022

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Following another 12 months of rental market highs and lows, what can buy-to-let landlords expect from 2023?

Read on for our predictions, from rising demand and high mortgage costs to rental reforms and landlord licensing.

Will buy-to-let landlords buy or sell rental property in 2023?

Buying or selling a rental property is a big decision and there are lots of things you’ll need to consider before expanding or reducing your portfolio.

Some of the factors that could encourage landlords to sell up in 2023 include:

  • rising mortgage costs
  • increased regulation

On the other hand, some landlords could be keen to buy a property due to:

  • high rental demand
  • rising average rental prices
  • lower average property prices

Rental property turnover could be high

Simply Business research from March 2022 found that 49 per cent of landlords had sold a property in the last year or were planning to sell in the future. Meanwhile, 23 per cent said they had plans to buy another property in 2022.

Whether you decide to buy, sell, or keep your portfolio the same size depends on your personal circumstances. Due to the reasons outlined above, a lot of rental properties could change hands in 2023.

If you’re thinking of buying a property, read our ultimate guide to property investment and overview of the best buy-to-let areas.

If you’re thinking of selling, our guide to capital gains tax has all the information you need.

Will rental demand and prices keep rising?

Demand for landlords’ properties remains high and shows few signs of slowing down.

Research from Aviva shows that up to a million people may rule themselves out of the first-time buyer market in the coming months due to pressures caused by the cost of living crisis. As a result, rental demand is likely to stay high in 2023.

Meanwhile, data from HomeLet shows that the average UK rent in November 2022 (sitting at £1,175) was 11.1 per cent higher than 12 months before. HomeLet’s rental index shows annual rental growth in all regions of the UK.

If demand remains high and prices keep rising in 2023, the opportunity for landlords to generate a high rental yield increases.

High demand for rental properties means landlords benefit from shorter void periods, a greater choice of tenants, and potentially lower advertising costs.

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Rising mortgage costs will continue to affect landlords

Following the controversial mini-Budget in September, average mortgage costs shot up. This happened against a backdrop of rising inflation and interest rates for much of 2022.

Interest rates were always expected to rise in 2022 – the Bank of England ended up increasing the base rate eight times to 3.5 per cent. That said, prices weren’t anticipated to go as high as they did.

Since Rishi Sunak became prime minister, the financial markets have calmed. And although more buy-to-let products have returned to the market, the average cost for fixed deals remains above six per cent according to Moneyfacts.

Rising costs are likely to continue to impact landlords who buy or remortgage a property in 2023. Read our guide to remortgaging a buy-to-let property for more tips on how to get the best deal.

Dates and details of rental reforms could be released

It was expected that landlords would have more clarity about rental reforms by the end of 2022.

Although the long-awaited white paper was published in June, we’re no closer to knowing when the following reforms will be introduced and how they will work:

  • scrapping Section 21 evictions
  • introducing a Decent Homes Standard for private rental properties
  • encouraging increased pet ownership among tenants

So, could 2023 be the year landlords get more dates, details, and clarity on rental reforms?

Michael Gove’s return to government under Rishi Sunak was welcomed by industry stakeholders as it was assumed he could pick up where he left off before he was sacked by Boris Johnson in July.

On top of this, there’s already been a consultation on introducing a Decent Homes Standard for private rentals.

So while it’s unlikely that any measures could become law in 2023, more details and proposed dates may be released. The government is likely to focus first on scrapping Section 21 evictions, which appears to be the top priority.

Tenant moving out of property

Energy efficiency to remain high on the agenda

In the face of the cost of living and climate crises, increasing the energy efficiency of rental properties is more important than ever.

As energy costs have surged in recent months, improving energy efficiency and keeping bills down is a priority for both landlords and tenants.

The government has plans to increase the minimum Energy Performance Certificate (EPC) rating for rental properties from ‘E’ to ‘C’. However, it’s not clear when the new rules could be introduced.

A study by Shawbrook bank has revealed that 73 per cent of landlords say the government has done a poor job at communicating the proposed EPC changes.

Meanwhile, Simply Business research found that 55 per cent of landlords would need to make improvements to their property if the minimum EPC rating was increased. This could cost 46 per cent of landlords an estimated £5,000 or more.

Details were recently announced about the government’s insulation scheme. The scheme pledges £1 billion to help owners of properties with low EPC ratings and in lower council tax bands increase their energy efficiency.

Read our guide to Energy Performance Certificates for more information on the rules you need to follow and how to improve the energy efficiency of a rental property.

More landlord licensing schemes could be on the way

There’s been a rise in the number of landlord licensing schemes in recent years, and this trend looks set to continue.

Selective and additional licensing schemes allow local councils to make it mandatory for landlords in a specific area to apply for a licence if they want to rent out a property.

Over 50 new licensing schemes and consultations launched in 2022, according to technology firm Kamma. This figure is higher than in both 2020 and 2021.

New schemes launched across the country in locations such as:

  • Greenwich (London)
  • Oxford
  • Leicester
  • Nottingham
  • Sandwell (West Midlands)

There are currently plans for new or expanded schemes in areas including:

  • Warwick
  • Wandsworth (London)
  • Manchester
  • Gedling (Nottinghamshire)

Call for increased licensing

The number of new licensing schemes could keep rising in 2023 after the Chartered Institute of Environmental Health wrote to Housing Secretary Michael Gove.

The organisation urged the government to make it easier for councils to implement selective licensing.

It said increased landlord licensing would help the government to reach its target of halving the number of non-decent homes across all types of housing by 2030.

Will there be a crackdown on short-term lets?

The government is coming under increasing pressure to regulate the short-term lets market and could take action in 2023.

There’s been a huge rise in the number of short-term lets in recent years. According to, between 2018 and 2022 there was a 102 per cent increase in the number of holiday homes let in the UK.

Critics of short-term and holiday lettings argue that they take away long-term housing from private tenants, which results in higher average rents.

It’s also argued that short-term lets landlords don’t have to meet the same level of legislation as those renting out properties in the traditional lettings market.

In summer 2022, the government launched a review of short-term tourist accommodation and in December Michael Gove announced that he would open a consultation on whether properties let on platforms like Airbnb should require planning permission.

The consultation is likely to take place in 2023, with recommendations potentially put forward before the end of the year.

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Conor Shilling

Written by

Conor Shilling

Conor Shilling is a Copywriter at Simply Business with over two years’ experience in the insurance industry. A trained journalist, Conor has worked as a professional writer for 10 years. His previous experience includes writing for several leading online property trade publications. Conor specialises in the buy-to-let market, landlords, and small business finance.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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