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Landlord self-assessment deadline and mortgage interest tax relief, smart meters, and what tenants want

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Here is our latest selection of some of the current property news headlines.

Landlord self-assessment deadlines and mortgage interest tax relief

The self-assessment tax returns for the year 2019/2020 deadline is at the end of this month. Yet there are still a sizeable minority of landlords who are unprepared for the fact that from April last year they were unable to claim any mortgage interest tax relief at all.

An article by the Mortgage Introducer on the 18th of January revealed that 17% of landlords – an estimated one in five – are unprepared for the fact they are unable to deduct any mortgage expenses (the monthly interest they pay) from the rental income they receive in order to reduce their tax liabilities.

Instead, a sum equal to 20% of their annual mortgage interest repayments is granted by way of tax credits.

Another change in the treatment of tax assessments for landlords is that they must now pay any Capital Gains Tax due on a buy to let property they sell within 30 days of the sale rather than opting to pay the tax at the time of the next tax assessment.

Changes to the tax regime continue to prompt many smaller landlords to sell up and abandon their buy to let businesses, argue some commentators. A full 90% of landlords believe that still further tax changes are on the horizon and 64% have said that changes to the tax regime have made them think about buying let property through a limited liability company.

Landlords urged to switch to smart meters with tenants spending more time at home

As successive coronavirus lockdowns mean that more and more tenants are spending longer at home than at work, utility companies are encouraging landlords to install smart meters for the benefit of their tenants, reported Landlord Today on the 19th of January.

Not only are house-bound tenants more reliant on the energy they consume, but a smart meter will allow them to monitor and use that energy more efficiently.

Furthermore, smart meters also allow information about the amount of energy consumed to be transmitted automatically to the supplier, so avoiding the need for physical, in-person meter readings – clearly, a boon during times when social distancing is so important.

What tenants want from a rental property

It’s the perennial question asked by landlords wanting to market their let properties in the most effective and favourable ways possible.

An article in Property Wire last week offered some clues.

Citing research from a major lettings and estate agent, the article revealed that:

  • 21% of all tenants surveyed gave access to a garage in the rental home as a top priority – making this the currently most sought-after feature among prospective tenants;
  • 18% said that they reserved their top demand for a garden; and
  • 16% wanted a home with a balcony.

Commenting on the results, the agents pointed to a natural desire for access to the open-air of a garden or balcony. They also believed that many tenants sought a garage because it would also offer further indoor space – which might even double up as an office for working from home. Pet-friendly rentals are also popular in some areas.

Ban on repossessions extended for mortgage borrowers

Citing a worsening coronavirus pandemic and tougher social distancing restrictions that make moving home more perilous, the Financial Conduct Authority (FCA) has extended until the 1st of April its ban on mortgage lenders seeking repossession.

Reporting the FCA decision last week, Estate Agent Today commented that it would offer some reassurance to both home buyers and buy to let investors that their properties were at least a little safer from the threat of repossession.

The action taken by the FCA runs in parallel with government measures to ban evictions of tenants in the private rented and social housing sectors.

New rules will give tenants a 'break' from debt

In a report on the 14th of January, the National Residential Landlords’ Association (NRLA) commented that a new scheme designed to give tenants struggling with debt a “breathing space”, there will be consequences for landlords in the ability to repossess their property because of arrears of rent.

A Debt Respite Scheme is to be officially launched with effect from the 4th of May to give those struggling with debt a breathing space – either as a natural break or following some mental health crisis. Such a natural break or period of respite will last for 60 days while those arising from a mental health crisis will last until 30 days after the debtor’s treatment for mental health issues ends.

During either type of breathing space, creditors will be banned from contacting the debtor directly to chase up repayment of the debt or take enforcement action for the recovery of the debt – and if the debt is rent arrears, that includes a ban on landlords seeking repossession of the property.