With a high number of laws affecting buy-to-let landlords and changing frequently, it is now more important than ever to keep up to date with the rules and regulations governing the private rented sector, according to Direct Line for Business.
A raft of new laws have been introduced in recent years affecting those who have invested in the buy-to-let market, including the introduction of the 3% stamp duty surcharge, the phasing out mortgage tax relief, scrapping of the ‘wear and tear’ allowance, tenants’ right to request energy efficiency improvements, the Houses in Multiple Occupation and Residential Property Licensing Reforms, Right to Rent laws, and then there is the proposed letting agent fee ban.
All these measures affect those who own rental properties, which is why Direct Line for Business is now urging private landlords to brush up on their knowledge of the new legislation to avoid potentially being hit by fines.
Additionally, the Energy Efficiency (Private Rented Property) Regulations for England and Wales, set to come into effect from April 2018, also mean that landlords must ensure that properties they rent in England and Wales reach at least an Energy Performance Certificate (EPC) rating of E before granting a tenancy to new or existing tenants.
Any failure to adhere to this new law could result in a fine of up to £5,000 or 10% of the rateable value of the property. However, analysis by Direct Line for Business reveals that updating the energy efficiency of a property can result in cost-savings of up to £1,000 per year.
On a more positive note for landlords, recent research conducted by Direct Line for Business found that landlords across the UK expect to see a hike in rents of 4% in 2017.
On the average annual rental income of £10,740 this represents an increase of £386.64 throughout the year.
Christina Dimitrov, business manager at Direct Line for Business, commented: “Being a landlord in the current climate can be a profitable business, especially if there is a demand for rental properties as we’ve seen in recent years. However, with so many changes taking place, and with more on the horizon it’s essential for any landlord to be fully up-to-speed with legislation, as the penalties for breaking the law can erode any potential profits.
“We understand that one of the challenges for landlords is having the correct legal documents in place. To make it easier for landlords, Direct Line for Business offers a legal documents service to all policyholders, which can help with the creation of vital legal documentation needed when renting a property. ”