Monday, 25 May 2020
TAX and regulation changes alongside political and economic instability meant 2019 was a challenging year for landlords in the UK.
According to a new survey from insurance company Just Landlords, 27 per cent of landlords said they may leave the market by 2021, with many feeling increasingly stressed and under pressure.
Emily Morley from Just Landlords said: “Almost a third of landlords say they have more worries than they did 12 months ago, with 28 per cent claiming that owning a rental property is very stressful.
“The checklist for a landlord can seem endless, with so many areas to consider. There is property maintenance to uphold, knowing your rights as a landlord, and what you are required by law to provide for tenants.
“It can feel like a never-ending task to stay on top of changes in the industry, so we’re not surprised to learn from our survey that so many are finding being a landlord stressful.”
Last year saw a number of legal changes affecting landlords, including the Tenant Fees Act 2019 — a law designed to protect tenants and limiting what they can be held liable to pay for, with payments for inventories and references specifically prohibited.
Landlords are also subject to new environmental standards, and this research showed that almost a quarter of those surveyed believe this change will have the greatest impact in 2020.
Another significant change relates to the phasing out of deductible mortgage interest payments. Until 2017, mortgage interest payments were tax deductible, but from April 2020 that will no longer be the case. Instead, landlords will receive a tax credit calculated at 20 per cent of their mortgage interest, reducing their tax liability by the same percentage.
Landlords must be aware of all these changes, as well as financially capable of accounting for them.
Ms Morley continues: “Investing in and letting a property has never been a straightforward process, but we’re seeing an increasing amount of additions and changes to legislation. It’s great that the Government is acknowledging issues within the private rental sector, and making attempts to improve housing for tenants, but there needs to be a balance that allows landlords to remain confident in the market.
“2019 was full of surprises, both good and bad, and with Brexit decisions still ongoing, we expect the boat to continue rocking for a while longer. As with any introduction of new legislation, it can take time to acclimatise to change.”
02 March 2020
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