Things are always changing in the Private Rented Sector (PRS) and, for landlords, that can mean a constant battle to keep up.
Whether it’s changes to legislation like tax, evictions or rental property health and safety or market fluctuations and changes in demand, landlords who stay on top of everything are the ones who generally get ahead.
So, now we’re well into 2020, what are the major things landlords need to know?
1. Rents are expected to rise
Legislative changes, particular to the way landlords pay tax, over the past few years have seen many buy-to-let property owners leave the PRS.
This means fewer rental properties are available for tenants.
As such, demand is high and supply is low – which usually results in rents rising.
UK rents rose by 3.5% in 2019, according to HomeLet, with similar rises predicted for 2020.
2. No more mortgage interest tax relief
As a landlord, this one should come as no surprise to you.
Changes to mortgage interest tax relief have been phased in since 2017 and from April, you’ll no longer be able to deduct any mortgage interest from your taxable profits – instead you’ll have to claim a fixed 20% tax credit.
3. Brexit impact and the new government
While the UK’s exit from the European Union was secured back in January, the real impact of Brexit is yet to be felt.
The property market, particularly in London, has showed signs of recovery since January but predictions are that growth through 2020 will remain modest.
So, if you’re looking to expand your portfolio or sell some of your properties, there’s plenty to think about before doing either.
4. Energy efficiency and electrical safety
Minimum Energy Efficiency Standards (MEES), meaning landlords can’t let properties with an Energy Performance Certificate (EPC) rating below E, have been in place since 2018.
However, in April 2020, the rules will apply to all tenancies – not just those that have been signed or renewed since April 2018.
Changes to electrical safety in rental properties are also expected to become law this year, which will see landlords needing to provide an electrical safety certificate every five years.
5. Section 21 evictions
Alongside those mandatory electrical safety checks, the government is also set to introduce sweeping changes to end ‘no fault’ evictions.
That could mean the end of section 21 notices, where tenants are given notice at the end of their tenancy agreements.
Instead, landlords would need to have a valid reason for giving notice.
Although the legislation will almost certainly pass this year, it’s likely the new rules won’t be fully implemented for at least a year, more likely even longer.
6. No more Right to Rent checks
If your rental property, or properties, are managed by an agent, it’s unlikely the introduction of Right to Rent affected you as your agent would take care of this particular check.
However, last year Right to Rent checks, which were brought in by the government to ensure non-UK residents were legally entitled to stay and rent property in the UK, were branded ‘discriminatory’ by the High Court.
This means 2020 could see the end of the checks, which were deemed to be in breach of people’s human rights.
If you have any questions about letting your property, get in touch with your local Parkers branch for more advice.