Changes in the UK Rental Market
11th June 2018
With the new tax year rolling, it's time to take a look at what's on the horizon for landlords and tenants in 2018/19. We've got new rules, new trends and new predictions to sort through. Here are some of the key points.
The Tenant Fees Bill
One of the first things to wake up to is the Tenant Fees Bill currently working its way through the legal system. Previously, letting agents have been able to charge tenants for all sorts of little extras, from inventories to phone and postage costs. All told, tenants are stumping up £240 million a year in fees like these – but that looks set to stop soon. The bill is about making renting “fairer and more transparent”, according to the government. However, it's hard to imagine letting agents taking it lying down. If they decide to make up the cash at landlords' expense, then some tough decisions will have to be made. It's easy to imagine the costs working their way back to tenants via increased rent, for instance. On the other hand, we might well see letting agents being ditched in favour of completely private agreements.
Energy Performance Certificates
Other rule changes coming in include new regulations on Energy Performance Certificates. Your property will need to hit a rating of at least E to rent it out.
There's also tough talk about a cap on security deposits, preventing landlords from demanding more than a month's rent for them. At the same time, the amount of tax relief landlords get on mortgage interest payments continues to drop – from 50% in April 2018 to 25% the next year, before vanishing altogether in 2020.
Plans are now underway to tighten up how the UK's so-called “rogue landlords” are handled. The government has unveiled a database of landlords and letting agents who:
- Unlawfully evict tenants.
- Breach gas and fire safety rules.
- Lease overcrowded properties.
People earning a spot in the database will include those on the receiving end of a banning order, or a range of civil and criminal penalties. Another side to the rogue landlord crackdown is a plan to expand the range of properties needing a Houses in Multiple Occupation (HMO) licence. This would remove the 3-storey-minimum rule and almost triple the number of properties affected.
Tax Relief on Longer Lets
Since the government is actively trying to encourage longer-term letting arrangements, we could be seeing some kind of tax relief on those kinds of agreement. In addition, a simpler process for resolving disputes is being called for, in hopes of giving people more confidence in longer-term deals.
Communities Secretary Sajid Javid is planning on making it compulsory for landlords to sign up to a specialised ombudsman redress scheme, to streamline the system. We might see a few changes to the popular Rent A Room scheme, too. Again, this is about encouraging long-term lettings. Right now, Rent A Room's being widely used as a quick cash generator through Airbnb-style set-ups, so we might see it being given a tighter focus soon.
Those are just a few things to keep an eye on if you're renting a room or property out. As always, get in touch with your questions, problems and concerns.
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