Buy-to-let landlords could easily be forgiven for thinking that politicians have developed an intense dislike for them and yet the strength of the UK rental market means that BTL continues to soldier on. Here are 6 “fast facts” for BTL investors to digest as we enter into 2018.
Energy efficiency becomes mandatory
As of 1st April 2018, it will become illegal to sign a new letting agreement on a property with an Energy Performance Certificate (EPC) rating of F or G. As of April 2020, existing tenancies will need to be in properties rated E or better. Landlords of modern properties shouldn’t find this too much of an issue, but anyone letting out a period home might want to double-check its rating and start to address it quickly if need be.
Landlords may finally get some help from the Chancellor
The government has dropped hints to the effect that it may look into ways to incentivise landlords to provide longer tenancies in order to provide greater security for renters with children. Governments being what they are, it’s likely that the incentive would be in the form of some sort of tax relief.
Mortgage tax relief will continue to disappear
This change is not new, exactly, but in April BTL landlords with mortgages will get even less mortgage tax relief than they do now and soon there will be none at all.
The Airbnb battle will continue
Up until now, central government has been fairly relaxed about Airbnb, local councils, however, often dislike it intensely and some have already moved to clamp down on it insofar as they can. There are three key indications that this could be the year when the government might be pushed into getting tough on Airbnb.
- The government is pushing for BTL landlords to provide longer tenancies
- The chancellor recently indicated he would like to see the long-standing rent-a-room scheme used for longer-term tenancies rather than holiday lets.
- The government is proposing increased regulation of HMOs and regulating Airbnb lets could arguably be seen as a logical extension of that.
Some landlords use Airbnb to fill voids in longer-term tenancies, for example, those letting to students could easily find properties are often empty in the summer after one set of student’s moves out and the next set move in. Any moves to stop them from doing so, could be yet another blow to BTL landlords.
HMO licensing could be greatly extended
Proposals currently on the table would extend HMO licensing from about 60K properties to about 234K properties. It would also introduce requirements for minimum room sizes, rubbish disposal and for landlords to prove themselves to be “fit and proper persons”.
Letting agents will be banned from charging fees to tenants
The much-heralded ban on letting agents’ fees should be coming into force any time now and landlords have to decide what it means for them. Solutions range from putting up rents to cover the fees to stopping using letting agents. Landlords considering the latter should, however, consider their ability to cope with all relevant housing legislation, including the right-to-rent scheme.
Author Bio
Hopwood House are property investment specialists, with a wide range of investment properties for sale throughout the UK in the student property, buy-to-let and care home investment markets.
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Daniel Peacock