11 things to know as a buy-to-let landlord
Several tax changes, new regulations on fees and licensing, uncertainty over Brexit and the potential for further base rate rises has made it a tough and confusing time for landlords over the past few years.
That’s why we’ve put together a list of 11 things you need to know or keep an eye on as a buy-to-let investor or landlord in 2019.
We hope it will make a lot of what’s happening in the industry a little easier to digest.
Mortgage interest tax relief
Mortgage interest tax relief will continue to be phased in until April 2020. The 2019-20 tax year begins in April, and the amount of mortgage tax relief that landlords can claim will be down from 50% to 25%.
Buy-to-let trends
Trends show that landlords are now increasingly on the lookout for longer-term fixed rate mortgages, with five-year deals dropping to the lowest cost on record and competitive 10-year fixes coming onto the market. Some lenders are also cutting their interest cover ratio to as little as 125-130%, down from the usual 140-145%. Cashback offers are also returning, with recent research showing that the number of buy-to-let mortgages offering cashback has almost doubled.
Extensions to HMO licensing
Last October saw changes to HMO licenses, meaning any large flat or house share of five or more people now require an HMO license, regardless of how many storeys high the property is or what the circumstances are with shared facilities.
Letting fees ban
A letting fees ban has been in force in Scotland for several years, one is set to come into force in England this summer and it’s something the Welsh government are also currently considering. To shed some light, if it’s introduced into Wales it’s likely that landlords and letting agents will be banned from charging fees to tenants. Having to cover full costs of tenant referencing and inventories would be the most obvious impact on landlords, so it’s something worth keeping an eye on.
Database of rogue landlords
The rogue landlord database was launched by the government and came into force last April, and though it’s yet to really get off the ground, changes to the current rules will be implemented this year and information will now be populated and openly available to tenants.
Minimum space
New regulations came info force last October relating to the minimum size of a bedroom, and the regulations depend on the number of occupiers. One person (under 10) - minimum of 4.64 square meters, one person (over 10) - minimum of 6.51 square meters, two people (over 10) - minimum of 10.22 square meters.
Energy efficiency
Minimum energy efficiency standards (MEES) were launched last year, meaning newly rented homes and renewed tenancies must now meet an energy performance certificate (EPC) rating of E or above. From 2020, these rules will also apply to existing tenancies.
Right to rent
The Right to Rent initiative was introduced in 2016, and its sparked a lot of debate over the past couple of years. The initiative requires landlords to ensure tenants have the right to live in the UK. Criminal sanctions is the outcome for those who fail to adhere.
Leasehold reforms
The government’s leasehold reforms are to step up a gear in 2019 as they hope to clamp down on unfair leasehold practices. Exactly what will happen regarding leasehold properties remains to be seen, but the uncertainty means any landlords looking to add to their portfolio this year should pay attention to the tenure.
Three-year tenancies on hold
There was much talk of minimum three-year tenancies being introduced, but this has been put on the back-burner with some rumours claiming the plans have been abandoned entirely. This could still be something worth keeping an eye on throughout 2019.
Eviction
As things stand, landlords can serve a section 21 notice of possession to tenants to inform them that they wish to take back possession of a property at the end of a fixed term or when an agreed break clause arrives. MP’s debated this eviction rule after campaigners claimed it can result in tenants being left homeless, and while there’s no guarantee of changes to the section 21 rules its another worth keeping an eye on.
If you're a landlord in Cardiff looking for the perfect tenants, then don't hesitate to contact CPS Homes today. You can reach our expert lettings team by calling 02920 668585, e-mailing enquiries@cpshomes.co.uk or by popping into one of our three Cardiff branches.
