2015 has been an eventful year for lettings, with a number of key legislation and tax changes impacting on private landlords across the country.
Leaders’ technical and compliance director, Carole Charge, says: “Over the course of 2015, we have seen a number of new legal requirements for lettings, along with announcements to changes in the tax system which will affect many landlords.
“Some of these developments may worry even the most experienced landlords. However, it is important to recognise that despite the new challenges and complexities, residential letting remains a solid investment.”
Carole explains that with the right professional advice and ongoing guidance, landlords can continue to benefit from excellent market conditions, including high tenant demand, strong rents and good capital growth.
“With ever-changing regulations and tax liabilities, some landlords may feel they have less control over where their investment is headed.” says Carole. “However, with a good understanding of how these changes will impact on you personally, along with professional advice, you can make the right decisions to stay on track to achieve your investment goals.
“As a result of the recent changes, it is no surprise that we are seeing more landlords opt for a fully managed service,” says Carole. “This gives them peace of mind that all current legislation will be complied with and their legal and financial interests protected at all times.”
Some of the key changes that have been announced and come into force during 2015 include:
• The requirement to have at least one smoke alarm installed on every storey of let properties and a carbon monoxide alarm in any room containing a solid fuel burning appliance
• Amendments to the Deregulation Act require landlords to respond to complaints and requests for repairs from their tenants in a prescribed way to ensure they do not jeopardise their ability to serve a valid Section 21 Notice to regain possession of their property
• Additional pre-conditions for serving a Section 21 notice, introduced as part of the Deregulation Act, affect whether and when a valid Section 21 notice can be served to regain possession
• Landlords will be required to check the immigration status of their tenants and ensure they are legally able to rent in the UK from February 2016
• Proposals to extend licensing of HMOs in England, including making the mandatory licensing apply to more shared homes
• Changes in tax relief on buy-to-let loan interest announced in the Summer Budget mean that from 6th April 2017 landlords will start to only receive tax relief at the basic rate of tax (20 per cent). This restriction is to be introduced gradually over a period of 4 years from this date, with the full impact being seen in 2020/21
• Landlords will no longer be able to claim the 10 per cent wear and tear allowance from April 2016 on furnished lettings. It is expected that the original cost of supplying the furniture will not be allowed but replacing items thereafter will be, this applies to furnished and unfurnished properties. The timing of replacement furniture will be important to ensure landlords can benefit from the maximum relief
• In the Autumn Statement it was announced that from 1st April 2016 an additional 3 per cent in Stamp Duty Land Tax will be charged on buy to let properties and second home purchases above £40,000
The role of a professional agent is now more important than ever in helping landlords to navigate through the changing letting landscape whilst ensuring their investment remains both legal and profitable.