New regulations and laws impacting landlords
New data from the Council of Mortgage Lenders (CML) shows that property transactions are slowing and buy-to-let lending has dropped. With fewer landlords joining the market, we look at the regulations that have been implemented that are forming a barrier to people becoming landlords.
While it’s an uncertain time, and there are plenty of changes affecting landlords, property can still prove to be a worthwhile investment. If you’re considering becoming a landlord, it’s best to understand the new regulations that have been implemented in the industry:
Stamp duty changes
Perhaps the most hard-hitting change has been the alterations to stamp duty that came into effect in April 2016. From that point, anyone buying a second home or buy-to-let property has had to pay an extra three per cent in stamp duty on top of ordinary stamp duty. Meaning a high fee for those buying their second home.
Mortgage interests tax relief
Before April 2017, landlords could deduct their mortgage interest costs from their income when calculating their tax bill. Landlords will not be able to claim tax relief on their mortgage payments from 2021, the amount that they can claim will reduce by 25 per cent each tax year, starting in 2017.
Right to rent checks
A new legislation means that landlords have to ensure their tenants have the legal right to live in the UK. Before the lease is signed, the landlord must do the necessary passport or visa check to ensure they are acceptable.
Letting fees ban
A draft bill has been introduced to Parliament that sets out plans to get rid of upfront payments charged to tenants. Expected to come into effect at some point in 2018, the costs associated with tenancy agreements, referencing and credit checks will now be passed on to landlords.
Energy efficiency regulations
From April 1st, any property that is being rented out must have a minimum EPC rating of E. New tenancies will be affected immediately and it will apply to existing tenancies from April 2020. If found breaching the rules, landlords will be fined up to £4,000.
It’s not all doom and gloom
Despite the above, there are still opportunities to succeed as a landlord, if done correctly. There is no doubting that there are more obstacles in the way for to thrive in the market but that doesn’t make it impossible. Demand for rental properties isn’t diminishing. In fact, in the East Midlands, the average rent has risen by 4.4% in the year leading up to November 2017. And in Leicester, rental prices in Leicester increased by 3.19% between 2016 and 2017, well above the 1.01% UK average.
Lettings management Market Harborough
Sometimes, all that’s needed is a helping hand with expert knowledge of the industry to help you prosper. That’s why a lot of landlords use letting agents. At Naylors, we provide a management service that includes:
– Collection of rent
– Arrangement of repairs
– Property inspections
– Assistance with tax returns
– Management of utility companies
For all of this, we charge 12% of rent (inclusive of VAT). For more information about our tenant introduction and management service in Market Harborough, call us today on 01858 450 020.