I was playing hide and seek with my granddaughter yesterday and when it was her turn to hide she went into the corner of the room, turned her back to me, knelt down on the floor and covered her eyes with her hands thinking that I couldn't see her. Needless to say it took me ages to find her! This reminded me of many landlords I know who are doing the same thing, putting their hands up to their faces, closing their eyes and hoping that all the recent changes in lettings legislation will just go away or even won’t apply to them… Wrong!
Do you remember when a similar thing happened with poll-tax, when many people refused to pay hoping that the problem would simply go away but it didn’t and the government eventually caught up with the people who decided not to pay. I know that many Landlords out there, especially those that try and save money by ‘going it alone’, who are trying to outwit the law by doing silly things like not declaring their income to the government. Believe it or not I have known some landlords not registering tenant bonds within the prescribed time or even not registering it altogether and spending it! Silly stuff going on out there, but like the poll tax evaders, it will catch up with them.
So what have we seen change recently and what is to come?
Back in 2013 it all really started to happen with the changes in the council tax rules. Since then we have seen stamp duty on second homes increase to 3% above the normal rate. In October 2015 we saw the new rules on property repairs/ maintenance introduced, with tenant eviction rules tightened at the same time. More recently the changes introduced in the 2016 housing and planning act, mean that the landlords can now be fined up to £30,000 for breaking the new lettings laws and trust me there is a lot of them. Local authorities are at this moment considering selective licensing and new legislation is being introduced in April 2018 regarding minimum levels of energy efficiency. Furthermore, new rules for HMO’s are soon to be implemented and there is talk of capping tenant bonds/ security deposit’s and worst of all for the landlord, Section 24's became effective from 6th April this year.
We are seeing ever increasing pressure put on this industry with the government dictating more and more. We are seeing them come up with more ways of extracting tax out of hard-working landlords and letting agents alike. Easy targets! The BTL/ letting industry has never been more regulated than it is today and we had better get well prepared because there’s plenty more of this to come...
Landlords have worked damn hard to get what they have today and in turn saved money to be able to invest in property, thereby doing the government a favour in supplying houses for people when they over the years have proven to be very poor suppliers of housing themselves, and will continue to be so. Was it not the government in the 80s that changed the law on letting property which actually encouraged us to go out and buy and rent out property because of the housing crisis at the time? This was similar to the encouragement they gave us to go out and buy diesel cars to 'save the planet’, yet all of a sudden we are now being told that diesel is bad and we are now being encouraged to change back to petrol. Is there something that those running the government didn’t know back then about the make up of diesel fuel or has the properties within diesel fuel changed since that time? What are we to understand or believe? As I get older I get less tolerant and regardless of your political persuasion; a bunch of clowns springs to mind.
Regardless of all this, private rental property is still a sound investment compared to many other areas you could choose to keep your money… and it always will be. Things never stand still in life, things change all the time and in my experience, the ones who accept and embrace changes tend to be the ones that prosper the most. We also have to remember that a BTL investment in property is a longer-term investment and the old saying is still true...‘you don’t wait to buy property, you buy property and wait’.
At this point, don’t worry, I‘ll be keeping you updated with all of the new changes in the law as they happen.