With a new year now upon us, it’s time to look forward to what might happen (and what is definitely happening) in the lettings sector in 2019.
Last year was another year of change and new legislation for landlords, with the introduction of new minimum energy efficient standards (MEES) in April, mortgage interest tax relief being reduced to 50% in the same month, changes to Section 21 notices and HMO regulations in October, the Homes (Fitness for Human Habitation) Bill becoming law and much speculation about when exactly the ban on letting agent fees will be introduced.
Below, we take a look at what landlords need to keep an eye out for in the next year…
The controversial Tenant Fees Bill, which would ban nearly all upfront fees for tenants and place a cap on deposits, is currently making its way through Parliament.
It recently passes the report stage in the House of Lords, and now moves to the final stage in that house – the third reading – before returning to the House of Commons for a consideration of amendments. After that, it can receive Royal Assent and officially become law.
Despite calls for clarity over the timescale of implementation, the most we’ve had from the government up until now has been 'spring 2019 at the earliest'. Back in November 2016, when Philip Hammond first announced the ban – which has proved so divisive ever since – he said it would be introduced as soon as possible.
More than two years on, we’re still no clearer on when it will actually come into play – and in what form. With a number of stages still to complete, and the very large shadow that Brexit is currently casting over politics, there is a good chance that the ban could be introduced much later in the year.
It’s ever-changing, too, with the government recently rowing back on its plans to cap tenants' security deposits at six weeks’ rent for annual rentals under £50,000. Instead, the government has now tabled an amendment to drop the deposit cap to five weeks.
Under the government’s ongoing plans to remove mortgage interest tax relief for landlords, it will be restricted to 25% from April this year. From April 2020, it will be reduced to 0%.
Previously, landlords were able to deduct all of their finance costs from their property income to arrive at their property profits. But, to address concerns that buy-to-let landlords were receiving tax advantages that homeowners couldn't, the government decided to gradually phase out mortgage interest tax relief.
Once it has been fully phased out, landlords will instead receive a tax credit equivalent to 20% of mortgage interest to offer relief for finance costs.
A number of measures – affecting England only – could be introduced this year. This could include the introduction of banning orders for certain offences committed by landlords, and the introduction of mandatory electrical safety checks for all specified privately rented properties.
What’s more, the regulations on energy efficiency will be tightened at some point in 2019, with landlords of properties with an Energy Performance Certificate (EPC) rating of E or lower being required to contribute to the cost of upgrades. The upper ceiling for registering for exemptions has also been lifted from £2,500 to £3,500.
The government hasn’t given a set date, but some 200,000 landlords are expected to be affected when the rules are tightened.
To find out more about what you need to be looking out for this year, please get in touch with Angels Sales & Lettings on: 0800 043 6778.
To find out how much you could be generating in rent each month, you can also request a free and instant online valuation.