News

11 December 2017
A look back at the Private Rental Sector in 2017

A look back at the Private Rental Sector in 2017

As the year comes to an end we take a look back on how new regulations, changes in taxation and the unprecedented economic and political uncertainty has changed the buy-to-let market.

We cannot recall a year in which the property industry has taken up so much Government time. Not all of it was helpful, but Andrew Louis as a company has adapted to these drastic changes by continuing to invest in our people and digital technology which puts us well ahead of our competitors and gives peace of mind to our client landlords.

While it’s an uncertain time, property can still be a good investment but as a landlord it is integral to keep up-to-date with the various new regulations and legal requirements. Here are a few things you need to be aware of:-

Mortgage Interest Tax Relief Changes

Before April this year, landlords could deduct their mortgage interest costs from their net income when calculating their tax bill. Now though, you can only offset 75% of your mortgage interest from your gross income and this figure is being gradually reduced to zero by 2020. Instead, landlords can claim a tax credit worth 20% of their mortgage interest.

The Letting Fees Ban

On the 1st November 2017 the Government published a Draft Tenant Fees Bill, which will ban letting agents and landlords from charging fees for the granting, renewal or continuation of a tenancy.It also includes capping holding deposits at no more than one week’s rent and security deposits at no more than six week’s rent. This controversial legislation is likely to come into force sometime in late 2018.

 Energy Efficiency Regulations

From 1 April 2018, any properties rented out privately must have a minimum Energy  Performance Certificate (EPC) Rating of E. The rules will apply to new tenancies from April 2018 and for existing tenancies from April 2020. Fines of up to £4,000 can be imposed for landlords who breach the rules.

 Landlord Licencing

Liverpool City Council introduced citywide landlord licencing over two & half years ago. This month, the council achieved new powers to fine criminal landlords up to £30,000. So it is important to ensure your property is compliant with all relevant rules, regulations and licensing conditions.

LCC will now be able to use powers under the Housing and Planning Act 2016 to impose civil penalties on private sector landlords where properties are found to be unsafe or dangerous, without having to resort to court action.

Stricter Buy-to-Let Lending Regulations

Last year, the Bank of England announced it would introduce tougher new requirements for buy-to-let borrowers. The new rules require landlords to bring in higher levels of rent relative to their mortgage costs. In addition, landlords with four or more properties will face additional stress testing and will also be required to provide more information about their income and debts.

Despite all these recent government changes, there are some positives about being a landlord such as historic low interest rates, less void periods and an increase in rental values.

On behalf of all the team at Andrew Louis we would like to wish you all a very healthy and prosperous Christmas and New Year

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