Do you comply with the Right To Rent scheme?

Just over 12 months ago, but still very relevant to many landlords, the Right To Rent Scheme began after a trial period which ran in 2015. The scheme required landlords to ascertain that their tenants held a legal right to live in the United Kingdom. Landlords are required to see documented evidence that a tenant fully complies with the Immigration Act of 2014. Any landlord that doesn’t meet with these requirements or has tenants staying with him who don’t have a legal right to stay in the United Kingdom could face a penalty of up to £3,000 for every tenant.

EPC Legislation

If a tenant makes a reasonable request relating to an energy efficiency upgrade, a landlord is no longer able to refuse it. Many landlords are also making changes to their property in light of a legislation that will come into effect in 2018. This sees a new minimum EPC standard being set for rental property and property for lettings should have a value of at least an E. Any landlord that fails to comply with this rating can face a fine of up to £4,000.

Stamp duty changes

The biggest change in the last 12 months for landlords is still the stamp duty change which occurred in 2016. Anyone buying an additional property, valued at over £40,000, was required to pay an additional 3% in stamp duty. There was a spike in sales in Q1 of 2016 as landlords and investors sought to buy property at a more affordable rate but then there was a dip in Q2 as many investors had completed their portfolio.

Wear and tear allowance

It used to be that landlords could claim wear and tear on their furnishings every year but this is no longer the case. It is now only possible for landlords to claim tax relief when they have actually bought replacement furniture.

This change, which follows on from dividend tax changes in 2015 means that many of the perks and benefits that landlords enjoyed are no longer in place. This means that many landlords have been revaluating their tax situation and whether it makes sense for them to remain in the industry. This is something that each landlord has to assess for themselves but many landlords find that there is still an opportunity to be a success as a landlord.

The underlying factor remains that there is a massive demand for rental property across the UK, this has been the case for the past 12 months and it’s going to remain the case for many years to come. If some landlords decide to drop out of the market, this will create more opportunity for the professionals that continue in the industry.

The last 12 months have seen many changes occur in the lettings industry but there is still a strong opportunity for landlords to achieve success in the sector. If you are thinking of buying an investment property and would like some advice on the lettings market in the area, get in touch with our team today.

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