Becoming a landlord can be a lucrative and interesting career path, but experienced property owners know it includes many legislative requirements which can be both tedious and challenging. Compliance with the many rules and regulations can become a full time task, so we’ve looked at the biggest challenges facing landlords for 2018 – to ensure you stay ahead of the curve, keeping your tenants happy and rental income flowing.
One of the biggest headaches for landlords, but also one of the most important parts, is complying with government and local authority legislation. From ensuring you have a legally binding tenancy agreement, to the correct energy certificate – every aspect of your duties needs to work in line with landlord law. Some of the most important landlord regulations to keep in mind are:
- Buy-to-let tax restrictions
As of April this year, mortgage interest tax relief was limited to 25% for landlords operating on a buy-to-let basis. This had an effect on landlords who charged low rent but had high mortgage costs. It is also set to change even further in 2018, with the amount of tax relief dropping from 75% of a landlord’s finance costs, to 50%.
- Housing and Planning Act 2016
This legislation, which came into effect in April of this year, is aimed at limiting the damage caused by rogue landlords by increasing fines for repeat offences. These can include illegal evictions, illegally renting, criminal damage and theft, among other things. There will also be banning orders introduced for landlords who repeatedly flout the rules, and a database of blacklisted names to help protect future tenants.
- Energy efficiency
From the 1st April 2018, the MEES (minimum energy efficiency standard) will be raised to an E rating, meaning properties that do not reach this standard cannot legally be rented. The minimum has gone up from F.
The regulations that surround renting a property are numerous and constantly changing, and keeping on top of them is imperative.
Of course, you can’t rent your property without the tenant, but there can be a number of reasons why relationships between yourself and your renter can turn sour. Complaints from neighbours, damage to the property or the non-payment of rent can have a serious effect on your mind and your bank balance.
Evicting troublesome tenants is one of the biggest pains in the life of a landlord, as there are many legislative hurdles to jump over. Depending on the type of tenancy and the reason you want to have them evicted, it can take a while to get possession of your property back. To learn more about evicting a tenant, check out our recent blog for guidance and advice.
However, it’s not just bad tenants that end up costing landlords, sometimes it’s the lack of them! Whenever a tenant leaves, the cost of advertising and showing the property to prospective renters can take up a lot of time and cash. The easiest way to combat this is to look at your tenants renting patterns and look to lease to people who have a history of staying in one place for a long time. Also, be a good landlord! If you take your time to ensure your tenants are satisfied, and that their rent is fair, they are less likely to move on.
Being a landlord doesn’t just mean renting out a property – it means organising the ongoing care of the place too. When you become a landlord, you take on responsibility of the basic living conditions. If the boilers goes bust, the water pipes get blocked, or damp starts to appear – it is up to you to fix it all. It will not always be as dramatic as those things just mentioned, but it will certainly be a large part of the job, particularly if you have more than one rental property occupied at the same time.
It is particularly important to have a landlord insurance policy that covers you against emergency repairs and, potentially, business interruption insurance, just in case renovations are needed which could render the property uninhabitable for a period of time.
The implications of Britain’s exit from the European Union are not yet fully known, and there is much uncertainty as to how, when, and why changes will come about and be implemented. For UK landlords, there is a growing worry of just how much extra legwork it will take to ensure tenants have the right to rent in Great Britain.
Having said that, there will always be an element of supply and demand when it comes to rental property. Since the referendum, house buyers are becoming turned off by the uncertainly that is awash in the property market, and many people who would have previously purchased homes are now renting them. This could lead to less ‘void’ time as many people do their best to wait out the storm by renting for a few years as the market settles back down.
Property, Liability and Contents Insurance
Insuring your property as a landlord differs from a normal home insurance policy, as you are placing the care and responsibility of the property to that of another person. Negligence plays a large part in legal claims against landlords, as any injury or illness to your tenants caused by your property, that could have been avoided, will mean you are legally liable and can be a costly exercise. This is where liability cover in your policy becomes necessary, to cover the costs of any claims.
With regards to household contents, you only need to ensure the items you are furnishing to the tenant(s), as their own items would need to be insured by them. If you are renting out an unfurnished property, there is no need to have contents insurance on your policy. But you want to have a decent policy to cover boilers, plumbing and electricals, if something were to go wrong you’d want to have it sorted out for your tenant as soon as possible, as they are not liable for fixing them. If you have the right connections, it can also be highly beneficial to know a good handyman, who can fix small things around the property you are liable for, but not in need of major replacement / refurbishment.
We can find you great deals on comprehensive landlord insurance, whether you are renting out one flat or the entire block, and include all the essentials in your policy so you are completely covered.