Law Changes Affecting Landlords

23 Jul

Law Changes Affecting Landlords

Over the last few years a number of new rules have been introduced for landlords, agents, and tenants.

From changes to tax relief to other regulatory changes, here’s a run down of some of the major announcements to date:

Tax Changes

Landlords used to be able to offset mortgage interest payments against rental income but a few years ago, the government announced they were phasing it out.

In 2019-2020 the tax relief you could claim reduced to 25%, and next year it’ll be gone.

The government has replaced it with a 20% tax credit, which isn’t as beneficial for higher-rate or additional-rate taxpayers.

Deposits

In April the government introduced a scheme to better protect landlords and tenants deposits. Under the new regulations, all property agents in the private rented sector are required to join a government approved scheme protecting the money of landlords and tenants from theft and misuse, or face a fine of up to £30,000. In 2017, approximately £2.7 billion in client funds were held by letting agents, yet before the legislation came into place, landlords and tenants could still be left out of pocket.

Tenants Fees Act

On June 1st 2019, the came into force, which means tenants no longer have to pay: credit check fees, admin fees, surcharges to move in or out of a property on a weekend, extra charges to keep a pet.

The ban applies to all new tenancies signed from the beginning of June onwards and from 1st June 2020 for agreements entered into before then.

The legislation also caps the refundable deposit landlords or agents can ask for at no more than five weeks’ rent-or six weeks where the total annual rent is £50,000 or more.

Abolishing Section 21

In early 2019, the government announced it will consult on measures to ban Section 21 notices, dubbed ‘no fault’ evictions.

Section 21 notices allow landlords to evict tenants at the end of their fixed-term contract without listing a reason why. Tenants have to be given up to two months notice.

The proposals would mean that landlords would have to provide a ‘concrete, evidenced’ reason for ending the tenancy. While the government also said it would look to speed up the process for landlords to evict problematic tenants, and those who fall into rent arrears.

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