In May of 2018, The Money Pages reported that landlords were expected to react to the growing legislative and regulatory pressures on their business by raising rents by an average of 2.3%.
By October, a report by Landlord Today revealed that, despite the raft of new legislation principally designed to protect their rights, more than half of all tenants did not understand how those very same regulations worked – a staggering 85% of tenants did not understand the impact of the ban on letting agency fees, for example, and 64% were confused about the need to pay the costs incurred in taking up references.
Against that background of increasing pressures on landlords, and growing confusion amongst tenants, what does 2019 look likely to hold in store for the private rental market in general and for landlords in particular?
Homes (Fitness) For Human Habitation
- in a report on the 30th of October 2018, the Residential Landlords Association (RLA) revealed that a Bill entitled Homes (Fitness) For Human Habitation had reached the House of Lords for debate;
- the Bill is expected to become law in 2019 although it does not introduce any new obligations on landlords but rather gives an additional means of enforcing requirements already enshrined in the Housing health and safety rating system (HHSRS);
- another Bill expected to become law during the course of 2019 relates to Tenant Fees and received its second reading in the House of Lords on the 12th of December 2018;
- the legislation will abolish most fees charged by letting agents and put a cap on the size of the deposit that may be requested by landlords;
- 2019 sees the continued withdrawal of tax relief for landlords on interest charged on buy to let mortgages;
- with effect from April, a maximum of 25% tax relief may be claimed and from 2020 any entitlement disappears altogether;
Funding of energy efficiency renovations
- since April of 2018, landlords have had to comply with new Minimum Energy Efficiency Standards (MEES), which require any let property to meet a minimum energy performance rating of EPC band E;
- until now, landlords who have been unable to find the means to fund the – not inconsiderable – cost of improving the energy efficiency of their let property have qualified for exemption;
- the availability of such “no cost to landlords” exemptions are expected to disappear in 2019;
- after a year in which the media has shone the spotlight on some property owners raising ground rents to leaseholders by exorbitant rates, legislative changes might be introduced during the course of 2019;
- whether you are the freeholder or the landlord of leasehold property, therefore, be prepared for any impact these changes might bring;
- at the beginning of 2018, the Labour party made great play of their support for the right of tenants to keep pets in property they rent, reported the BBC on the 14th of February;
- if there is any prospect of a Labour government in the year to come, therefore, the relevant legislation might be introduced;
- at the time of writing, the great unknown – in practically every sphere of life in the UK – is going to be the impact of Brexit;
- quite how it all pans out is, of course, anyone’s guess.
Although there continue to be a number of changes likely to impact landlords and the way in which any buy to let business may be conducted, industry commentators are generally agreed that these may be fewer and farther between than in 2018.