2018 has been a testing year for landlords with new legal issues coming into effect and the budget adding additional challenges.
The Introduction of Local Licencing Schemes
More local authorities have started introducing licencing schemes to private landlords. Over 70 local councils across England have done so this year, where the need for registering with a licencing scheme might even become mandatory, as a new Bill is currently being considered.
The Expansion Of The HMO Licence
The start of October saw changes in the requirements for the Houses in Multiple Occupation (HMO) licence, meaning more properties now fall under it. This means that any landlord who lets a property comprising of three or more stories to 5 or more people (from 2 or more separate households) must be adhere to new regulations by their local housing authority. If you operate an HMO with 5 or more tenants forming more than 1 household then you will be required to be in possession of a mandatory HMO licence. This change was brought into place to clampdown on the small minority of landlords renting out sub-standard and overcrowded homes.
Changes In Tax Deductions
The 2017-18 tax year was the first year for many of the most recent tax deduction changes. For this tax year, landlords can claim 75% of the finance cost at the higher rate, and the remaining 25% being deducted with basic rate. For the 2018-19 tax year, this will fall to 50%. It will fall further in the following years and is something that’s having a noticeable impact on the buy-to-let industry.
The Higher Energy Efficiency Standards
2018 saw a requirement for privately rented properties to have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). This means that landlords have a duty to make sure properties meet this standard.