Landlords struggle to keep up with new rules
Property investors have been subject to increasing red tape and rules over the last few years, and the pace of changed hasn’t slackened, with at least three reforms coming into effect in the last year alone.
But the cumulative effect of these changes has left some landlords confused, and struggling to keep to to date, the bridging lender found.
Caught in red tape
It revealed that 30% of landlords 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, as well as introducing compulsory licensing for landlords.
Almost one in three (28%) landlords also admitted to not fully knowing what the abolition of Section 21 means. The reform, which was implemented in June 2019, aims to prevent unfair tenant evictions and could have a significant impact on landlords, especially those trying to evict problem tenants.
A similar number (27%) said they do not understand the tenant fees ban (June 2019) or how it may affect them.
Lack of knowledge
MFS’ research uncovered a similar lack of knowledge when it comes to tax reforms that are likely to impact UK landlords.
A quarter (25%) said they are not up-to-date with the latest changes to reduce tax relief on buy-to-let mortgage repayments, while even more (28%) do not understand the reforms to inheritance tax with regards to passing down properties.
Paresh Raja, CEO of the lender, said: “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.”