According to Endsleigh’s recent survey, 15% of landlords said their biggest concern over the next 12 months is unexpected costs rising. Here we look through the challenges and worries facing landlords in 2016 and how to avoid any unexpected costs.
Endsleigh found that the biggest challenge landlords will face is the new ‘right to rent’ legislation. Over 50% of landlords surveyed stated the new legislation would affect how they act as a landlord, with 33% thinking it will result in higher costs.
Implemented from February 1st 2016, anyone letting a property in England will be required to check the potential tenant’s ‘right to rent’. The new measures, which form part of the Immigration Act, are intended to clamp down on landlords who provide substandard or overcrowded accommodation.
Under this legislation, landlords must check the rights and identities of all prospective tenants. Any landlord who breaches this legislation could receive a fine of up to £3000 per illegal occupant. It’s therefore highly important to establish and maintain mandatory checks. An individual will have the ‘right to rent’ in the UK provided they are present in the country lawfully, in accordance with immigration laws.
In the 2015 Autumn Statement, the Chancellor announced a 3% surcharge on Stamp Duty Land Tax (SDLT) for second homes in an attempt to double the affordable housing budget. As a landlord looking to acquire additional properties, this will mean increased costs. From 1st April 2016, any purchase of an additional property valued above £40,000 will be subject to a 3% Stamp Duty Land Tax surcharge over and above the current rates of tax.
54% of landlords surveyed are worried about this surcharge, with 14% expecting to have to raise their rent because of it. 25% of tenants are worried about the surcharge, with four-fifth of those worried that their rent will be raise as a consequence. If you’re worried about how this charge may affect you as a landlord, check out our article here.
Another concern for nearly 10% of landlords is the need to stay up to date with changing regulations to avoid any fines. 2015 brought about a number of changes, including the Consumer Rights Act, the Smoke and Carbon Monoxide Alarm Regulations, as well as the new Welsh landlord and tenancy act and it’s safe to say 2016 has been and will be no different. Endsleigh found that nearly 90% of landlords also have full time occupations, with 57% of them currently use a letting agency to make the management process easier. It’s therefore vital that landlords keep up to date with legislation and regulation changes. There are a number of ways you can stay up-to-date:
From 1st February landlords will be responsible for checking their prospective tenant’s right to rent. Find out more here.
Here is a brief outline on what you need to know about Stamp Duty.
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In the ever developing market of ‘Buy to Let’ mortgages, it is important that you understand your lender’s requirements when it comes to interest clauses. This article will help you decipher the lingo, to ensure you understand the agreement you are signing up to.