In the current private rental sector, many landlords have a diverse portfolio of buy-to-let properties, and as a result, many of these landlords experience periods where their properties are empty. The length of an empty period is determined by a number of factors such as tenant demand, property maintenance and even marketing, and therefore, an empty period can last any amount of time, but for most landlords in the UK, the average empty period is between 50-60 days a year.
However, there are cases where properties go unoccupied continuously for one year; these properties are classed as long term empty properties, and landlords who own these homes are unhappy with new regulations being introduced by the government.
From 1 April 2016, local authorities across Wales will be able to determine the amount of council tax landlords need to pay on long term empty properties at their own discretion. Landlords are unhappy because the amount that can be charged is up to 100% of the current council tax rate; this means many landlords could face council tax bills payable at a rate of up to 200% compared to an equivalent occupied property.
The government is introducing the change as a way of reducing the number of people buying second homes and not fully utilising them. This problem is more prominent in coastal areas, as many landlords buy a second home to rent out as a holiday home, meaning many of the properties in these areas are left unoccupied during off-peak periods. The government has argued that the issue of long term empty properties pushes up house prices, especially in areas where second homes are rife, and stops potential first-time buyers from getting on the property market.
Landlords are understandably unhappy with the new changes, with many suggesting that the changes could drive some landlords out of the buy-to-let market. The biggest complaint landlords have with the new regulations is that they don’t make any exceptions for properties that are empty for long periods of time due to essential or planned maintenance. Other landlords have stressed that holiday homes in coastal areas aren’t empty and in fact, the people who reside in them actually bring jobs to tourist areas; some landlords have said that it’s wrong to talk about raising money from second properties used as holiday homes, when tourism is the main way money enters the economy in holiday destinations.
If you’re a landlord in Cardiff with a second or third property and are concerned about the impact these new council tax regulations could have on you, please contact our team today. As one of the largest lettings and estate agencies in Cardiff, we can help answer any questions you may have and advise you on the best course of action. We can also help you prepare for Rent Smart Wales, Wales’ biggest landlord change! To speak with a member of our experienced lettings team, call us today on 02920 668585, email email@example.com or pop into our office located on Woodville Road.