Mortgage interest tax relief changes
Landlords are now only able to subtract a flat credit of 20% of your mortgage expenses from your rental income when filing your tax return.
These are now to be capped at 5 weeks rent or six weeks if the annual rent exceeds £50,000.
Section 21 evictions
The government is consulting on repealing Section 21 of the Housing Act. Section 21 allows landlords to end a ‘rolling’ tenancy with two months’ notice, without giving any reason for doing so. The government believes repealing Section 21 will offer tenants greater security,
Letting fees ban In 2019
Letting agent fee charges in England and Wales to tenants are to now banned.
Changes to private residence relief
Currently, it is possible to claim up to £40,000 in capital gains tax relief if you let a property that is, or has been, your main home – even if you haven’t lived in it for a long time.
Landlords operating Houses in Multiple Occupation (HMOs) are likely to be up to speed with the licensing rules adopted in October 2018, but confusion remains around other local licensing schemes.
Electrical checks In July 2018
The government announced plans to make landlords carry out electrical safety checks on their homes every five years. So far, however, it has yet to set a start date for these checks to be introduced. This could happen in 2020, but it’s likely that landlords and managing agents will be given at least six months’ notice before implementation. After implementation, a two-year transitional period will apply, with new tenancies being brought under the regulations first, followed by existing tenancies a year later.
Energy efficiency rules From April 2020
Landlords are required to meet the new Minimum Energy Efficiency Standard Regulations, which require rented homes to have a minimum Energy Performance Certificate (EPC) rating of E. Landlords with properties that don’t meet the regulations must carry out energy efficiency measures on their homes, up to a cap of £3,500 a property.
Money protection schemes for clients
New rules introduced in April 2019 mean that all letting agents in England must belong to a client money protection scheme. This provides insurance to landlords and tenants alike against malpractice from agents.
Right to Rent
The government’s Right to Rent initiative has provoked much debate since being launched in 2016, and that’s unlikely to change this year. Right to Rent requires landlords to check whether tenants have the right to live in the UK, with the threat of criminal sanctions for those who fail to adhere
This is the government’s attempts to stop unfair leasehold practices eg. spiralling ground rent clauses and high ‘permission fees’. The government is looking into banning new houses being sold as leasehold, and the possibility of caps on service charges, ground rents and permission fees.. Its important landlords pay particular attention to the tenure of properties if they plan to expand their portfolios in 2020
Stamp duty was changed in 2016, when the government introduced a 3% buy-to-let stamp duty surcharge for property investors.. There are rumours are that a new stamp duty surcharge could be brought in for foreign buyers investing in UK property.
2019 revealed a sluggish property market with Land Registry data showing that UK prices increased by just 1.3% year on year. Landlords cannot rely as heavily on property price growth as they once might have done.
Buy-to-let mortgage rates dropped steadily over the course of 2019, with an average of 3% in December. With the price war between lenders likely to continue early in 2020, now is a great opportunity to consider refinancing your portfolio and lock in a great rate.
Contact Leon Kaye Solicitors for residential and commercial property legal advice when extending your lease buying or selling your property. Tel. 20