There has been a lot of upheaval in the property industry recently, and if you work in this sector then you are probably already aware of this. However, if you are a buy-to-let landlord then there are certain changes that are coming that you may not be aware of, but definitely deserve your attention.
As of April this year the amount of tax relief that landlords can claim on their finance costs will be slowly restricted to the basic rate of income tax, which is 20%. This reduction means that some landlords may make losses on their lettings businesses, however it will not affect all landlords.
If a landlord is on the higher rate of income tax and has a mortgage with over 50% LTV then they may want to consider taking steps to try and mitigate these changes. Some landlords are setting up private companies. However, this is not necessarily the best solution for everyone.
While no date has been set in stone, the housing minister did say that the letting agency fee ban would be discussed this spring. Last autumn the chancellor stated that a letting agency fee ban could take place, and these costs would be absorbed by landlords. If these changes take place, landlords should consider either switching to a cheaper management option, or possibly managing the properties themselves.
And from the 1st of October the government will launch its blacklist of rogue landlords and letting agents. These lists will be available to local and central governments. Once on the list landlords and agencies will be banned from letting a property for a minimum of 12 months, which could have a huge effect on their business.
You may already be aware of some, or all, of these changes, but it behoves any landlord or letting agency to learn them as completely as possible. The ramifications of the changes could be huge if not managed properly. For any assistance call the conveyancing team at Liddy’s solicitors on 01924 366 896 to see how we can help.