Mr Engineers takes a look at changes that are likely to affect landlords in 2018!
There is no doubt that 2017 has been a momentous year for landlords in the UK.
Many changes have affected traditional buy-to-let investments:
To begin with, 2017 has marked a turning point in the adoption of technology within the property market. According to a report by Oxford University, billions of pounds have been invested into online/digital start-ups, changing the way landlords and tenants interact with each other and the rest of the market.
England has seen an increase in the number of localised landlords’ registration schemes aimed at enforcing minimum standards of tenant and property management, passing the 500 scheme milestone.
The government began phasing a reduction on the tax relief on interest payment for landlords in April 2017 and new legislation was introduced on how to pay Stamp Duty, requiring buy-to-let investors to pay an additional 3% on top of existing rates when buying a property over £125,000.
New and tougher mortgage lending rules were introduced in September 2017, requiring lenders to carry extensive financial and business background checks for portfolios with more than four buy-to-let properties bought with a mortgage.
What can be expected from 2018:
One of the most anticipated changes is the proposed government legislation banning all fees charged by landlords or agents in England other than deposits and holding deposits. This will significantly change the way landlords pay to find, vet, move tenants in and out and contract renewals. Charges for these services, which agents used to ask tenants to pay, will have to be picked up by landlords instead.
During the Queen’s speech in June 2017 it was revealed that the government wants to cap the permitted rental deposit on a property to four weeks, reducing it from the common six week’s rent asked by most landlords now. The National Landlords Association says approximately 40% of all deposits are more than four week’s rents. Legislation is likely towards the end of 2018.
To tackle the issue of “rogue landlords” the government is planning to introduce a national redress scheme during 2018/19 that landlords will have to join, enabling tenants to have a platform via which to complain about poorly managed properties.
Furthermore, legislation is expected later in 2018 incentivising landlords in the private rental sector to offer tenants “family friendly” three year tenancies should they wish to.