A high number of landlords are struggling to keep up with new policy reforms, new research suggests.
Market Financial Solutions has surveyed more than 400 landlords to find out just how aware they are of new legislative and regulatory reforms that have been introduced.
The study found that 30% do not understand the changes to House in Multiple Occupation (HMO) licensing, which came into effect in October 2018 to stipulate on the minimum sizes of rooms.
In addition, 28% of respondents admitted to not fully knowing what the abolition of Section 21 means, while 27% of landlords were unaware of letting fees ban
When it came to tax, there was also major confusion, with 28% not understanding the reforms to inheritance tax that have changed the tax-free allowance on properties being passed down.
A quarter - 25% - did not know about the reforms affecting tax relief on mortgage repayments, which were implemented in April this year.
The majority of landlords said they were not in favour of these reforms.
Paresh Raja, CEO of Market Financial Solutions, commented: “The legislation and regulation governing the UK’s rental market is constantly evolving, and today’s research clearly shows that landlords are struggling to keep pace with the change.
“From HMO regulations to the abolition of Section 21, these are significant reforms that, for the most part, are rightly designed to protect tenants.
“Nevertheless, there’s evidently frustration among landlords who feel they are being unfairly targeted, particularly when it comes to the stricter taxes being introduced.
“It’s essential that anyone renting out a property – even if they would not consider themselves a landlord – understands all the new reforms and takes action to ensure their properties meet the necessary standards and their finances are structured in line with the new reforms.”
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LL should be legally compliant with all regulations.
Whether a rental property remains financially viable is a completely different facet.
It is up to the LL to keep abreast of any change in financial viability.
If they don't bother as is their prerogative they may face bankruptcy.
You can't force LL to be effective businesses.
Obviously if this occurs then invariably the result would be homeless tenants which doesn't make much sense.
But it is for the LL to decide how much interest they show in their business.
If LL can't be bothered then that is their lookout.
I'm sure most tenants would prefer a thoroughly engaged LL or perhaps NOT.
Increasing rents for my tenants have resulted as a consequence of my awareness of changes in the financial landscape.
Other less engaged LL may not be increasing rents as they should because they are clueless as to the recent onerous changes in the PRS industry.
That is good in the short-term for tenants who would generally find their rents remaining lower.
But of course when the dopey LL eventually realises that rents need to substantially increase the amount of increase will come as a great shock to the existing tenants.
Far better to increase annually by a smaller amount.
Many tenants of LL who aren't aware of major issues like S24 could well find their rents increasing massively.
Dopey LL will have little alternative as their investment properties become loss making.
Given the choice most tenants would prefer to pay an extra £150 pcm than for the LL to sell up due to unviability.
I suspect as S24 starts to affect LL even more rents will be continuously increasing to enable future viability.
Few LL will be prepared to operate at a loss.
Tenants won't really object to paying the S24 Tenant Tax as not doing so could well result in them being homeless as the LL is forced to sell up.
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