Buy-to-let landlords have been under pressure in recent times from a variety of sources, so it may be time to consider a few issues that could affect your portfolio in 2019.
1. With the new tax year approaching in April, reductions in mortgage interest tax relief will continue. Starting this year, landlords will be able to claim 25% finance costs deductions with 75% given at basic rate, down from a 50-50 split in the previous tax year.
For 2020-21, all financing costs incurred will be taxed as a basic rate deduction.
2. Landlords will be aware of the House of Multiple Occupation (HMO) licensing changes that were introduced last year, which means that many landlords now find themselves covered by these rules. The original definition of an HMO involved properties of three stories, but that limit has now been removed, and any house or flat shared by five or more people will now require an HMO licence.
3. On the issue of HMOs, more than 60 English councils operate their own licensing schemes that may add other restrictions, such as a lower number of tenants. This may involve a fit and proper person test with additional fees applicable.
4. New rules on letting agents’ fees are due to come into effect on 1 June 2019. Although the new law is aimed at agents, landlords will be affected, becoming responsible for referencing and inventories – costs that are often now passed on to tenants.
Deposits will also be capped, reflecting five weeks rental on tenancies under £50,000 per year. Whether landlords are looking for letting estate agents Cheltenham, Chorley or Chelsea, help can found at sites such as Estate Agents Cheltenham.
5. Further government legislation introduced the concept of rogue landlords, with a database being created. Media reports have suggested that this has been slow to get off the ground. Currently, only government officials can access the list, but this is set to change in 2019 with the information available to tenants.
6. Last October, the government introduced new minimum space requirements relating to the size of bedrooms. The legislation relates to “sleeping accommodation” in leased premises. The regulations depend on how many people are occupying the bedroom. There is an 18-month period for landlords to rectify any problems, but fines will be imposed for non-compliance.