The Chancellor George Osborne's summer Budget statement will impact the rented sector, with Right-to-Buy extended to those in Housing Association homes, and social housing tenants earning more than £30,000 – or £40,000 in London – being told to pay market rents or move out. The Chancellor also announced he would retain mortgage interest relief on buy-to-let properties but restrict it to the basic rate of income tax payers, phasing in the withdrawal of higher-rate relief over four years, starting in 2017.
Nick Barnes, head of research at Chestertons, says: "The changes to mortgage interest relief for buy-to-let landlords may have a knock-on effect for tenants. Higher rate taxpayers who will see this relief start to be phased out from 2017. This may lead to some landlords pulling out of the market altogether, which will lead to a shortening of supply of good-quality rented homes, while others may be forced to pass on some of the overheads in the form of increased rents."
With the Government committed to a long-term plan to reduce carbon emissions to "close to zero" by 2050, all buildings will need to attain an Energy Performance Certificate – or EPC – rating close to A.
The Energy Act 2011 states all properties that require an EPC in the private rented sector must conform to minimum energy efficiency standards by the specified dates:
1 April 2016: Tenants will be able to request consent for energy efficiency measures that may not unreasonably be refused by the landlord.
1 April 2018: All privately rented properties where new leases are granted will be required to attain a minimum EPC rating of E.
1 April 2020: All privately rented homes to attain a minimum E rating.
Regulations to improve energy efficiency should be beneficial to both landlords, in terms of the marketability of their properties, and their tenants, in terms of reduced energy bills.
For more detail on the changes landlords will need to make to their properties and when the new rules come into effect click here to view a video.
Following a trial in the West Midlands, landlords across the rest of England and Wales will have to conform to the new Right to Rent rules, under which they must check the eligibility of tenants to reside in the UK, or face a £3,000 fine. The scheme is to be extended nationally from September.
For more information on the changes, implemented as part of the Immigration Act 2014, and how they will affect you, click here to view a short video.
While many of the changes signalled by various political parties before the General Election are now off the table, the Conservative Government has outlined proposals to make it easier for individuals to sub-let rooms, by banning clauses from being inserted into tenancy agreements forbidding subletting any part of the property without the landlord's consent.
Although it is some way off from being carried through, such legislation could have negative implications for landlords: in the event of damage to the property or anti-social behaviour by the sub-tenant, it is unclear whether the landlord or the 'superior tenant' would be liable and what recourse there would be to evict the sub-tenant. From an insurance point of view, the landlord may also be compromised by possible actions taken by the sub-tenant.
To find out more about the proposed changes and how they may affect you, click here to watch a short video on the subject.
You may have seen a recent story in which a major UK letting agent is being threatened with a class action after allegedly charging landlords hidden fees for having maintenance work carried out – essentially charging commission on top of tradesmen's bills that isn't set out in its terms and conditions. If landlords join a joint legal challenge it is estimated it could cost the letting agent millions of pounds in compensation, so it's no surprise landlords, agents and the industry at large has sat up and taken notice of this case.
The only time we would charge landlords anything is when the work is for over £600, in which case we charge a 10% supervision fee.
Other lettings agents were quick to respond, claiming they would never charge "hidden fees" for carrying out maintenance and repairs – but many do still charge commission of up to 25% on tradesmen call-outs.
At Chestertons, we have never charged any fees or commission on these types of repairs – "hidden" or otherwise – and never will. We believe maintaining our landlords' property is a service both to our clients and their tenants, and we're proud to offer that service without additional admin fees or extra charges being applied. For more details on what our maintenance, refurbishment and empty property management services, please visit www.chestertons.com/lettings/landlords/property-management
Labour leadership hopeful wants Right to Buy extended to private tenants
Labour has been highly critical of the Tories' Right to Buy scheme, and the planned extension to Housing Association tenants. But leadership candidate Jeremy Corbyn raised a few eyebrows recently when he called for it to be developed still further – to include those who rent from private landlords.
Corbyn, the MP for Islington North and definitely the most Left-wing runner in the Labour leadership race, claimed the policy could help tackle the housing crisis, and get more people in Generation Rent a secure foot on the ownership ladder. Corbyn didn't give details on how the policy might work, or how it would lead to more new homes being built, but said he wants to launch a consultation into the idea if he successfully wins the leadership ballot.