The government’s announcement earlier this week that there will be radical reforms of the PRS will not just create open-ended tenancies and restrict a landlord’s ability to remove tenants, but will also dissuade property investors, including institutional landlords, from making further investment in the sector, according to Collyer Bristow.
The property law firm acknowledges that reforms to so-called ‘no fault’ notices served under section 21 of the 1988 Housing Act, together with recent changes to the tax position on buy-to-let investors and the ban on letting fees, make it increasingly challenging for private landlords.
Paul Henson, a partner in the real estate litigation team at Collyer Bristow, said: “The Government has a Dickensian view of private landlords offering substandard homes for extortionate rents. Whilst the market is far from perfect, this view is outdated. Private landlords want tenants in their homes, and most tenancies are in fact ended by the tenants themselves.
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I was considering becoming a Landlord but am increasingly put off by the restrictions and rules
Who can blame you for feeling this way.
I am getting out of the PRS ASAP!
If you can avoid needing a BTL mortgage then still worth being in the PRS.
Possibly worth doing if you start as a corporate LL.
However would you bet your life that a version of S24 would not be applied to corporates!!!??
I was at my barbers last week and he was asking me about investing in property, but was having second thoughts because of all the negative news items with regard to letting.
With the advent of licensing and all the other regulations that have to be addressed, it is getting to the stage where it is becoming uneconomical to comply with everything that is being introduced.
The prices of properties in my area have risen by over 30% in the last year (from a very low base). However, that has not affected rental prices. Therefore, if you had a BTL mortgage on a property in my area, your income probably wouldn't even cover the repayments, let alone all the other expenses that have been heaped upon us.
I’m getting out as much as i can the parties over and its affecting my health and it is getting harder and harder to turn a profit it’s just not worth it and I’m in the north where yields are strong selling off in bit sized chunks and concentrating on Airbnb and develop to sell be very careful if you are Getting into now it’s a different a animal than even 5 years ago I’ve been doing it for 18 years and it’s hard graft
Yep the days of the RELATIVELY easy!!! bog standard AST letting is destined to be uneconomic.
Doing things differently as you are exploring is the only way to remain viable though inevitably it is even more work than the allegedly passive AST business model!!!
Most prospective LL are only interested in what was the RELATIVELY easy AST model.
But as you suggest this model is becoming increasingly unviable.
As a very lazy LL I simply CAN'T be bothered with these other forms of letting activity.
I will therefore just be taking in lodgers to a resi property once I have sold all my BTL.
There will be NO tax to pay as I will never receive more than £7500 in lodger income per tax year (you can believe that if you want!).
Yes lodger churn will be the case.
Not a problem for me.
As for me being continually at my resi property with lodgers!?; might be , might not be.
No Govt can force me to be in residence at my home for so many days.
However my insurance company conditions WILL
This as they usually require absences of no longer than 30 days in a month.
I reckon I can easily be a guest somewhere else and return to my home every 30 days.
Big Brother Connect computer will NEVER catch me out as I will be a genuine homeowner with a lodger.
The fact that I might have 4 lodgers and am never at my home is something that will never be detected.
I will be earning more lodger income than from tenants which of course will NEVER be more than £7500.
HMRC have no way of telling as all my lodgers will be paying the monthly rent in cash which WON'T be entering the financial system apart from paying off credit card bills over the counter.
Paying debt NEVER flags anywhere!!
Big Brother Connect has an awful lot to learn!!
Agree, I think it is time to diversify if possible?
I am sure that being in business in different forms for the last thirty years will hopefully avert my downfall.
I am thinking about Airbnb and holiday lets, but here's hoping that cash strapped governments don't also start looking at these sectors in the future
Cross that bridge john when and if it comes
Was looking to add another to the portfolio, however I am not until this is sorted and I know we’re we stand. That house is still being purchased but instead of tenants I will be flipping it on at least I won’t be stuck with tenants if it all goes wrong later
Go Commercial.
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