As if landlords haven’t suffered enough due to regulatory changes – more are planned for 2019.
If you’re a landlord, you’ll already have been on the receiving end of several new policies, including a reduction in the tax reliefs you can claim.
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And there are more changes to come next year, including the banning of tenant fees and the capping of deposits. There’ll also be the outcome of a consultation on three-year tenancies.
These changes are likely to go ahead unless big political events – such as Britain leaving the EU – lead to a General Election, which would allow other political parties to introduce their own changes if they got into power.
1. A ban on tenant fees
Soon, tenants will be required to pay only their rent and deposit when they sign up to a new lease, due to the banning of tenant fees.
This change means most additional fees will be banned, such as any charges for carrying out an inventory or referencing.
However, landlords will be able to charge fees to replace keys lost by tenants or for late payment of rent.
With most costs no longer chargeable to tenants, landlords will need to pick them up – but one option for them to recoup these costs will be to increase rents.
2. A cap on tenants’ deposits
Damage is one cost that landlords will still be able to claim back, through the deposit at the end of the tenancy.
Until now, deposits haven’t been capped – but they soon will be under new government regulations.
Currently, the government proposals suggest a deposit cap of five weeks’ rent for properties where the annual rent is less than £50,000. That cap increases to six weeks’ rent where the annual rent is £50,000 or more.
This measure – along with the banning of fees – is part of the Tenant Fees Bill 2017-2019, which was introduced into parliament in May and has already now moved to the House of Lords. It’s due to become law shortly.
3. Three-year tenancies
The government has consulted on introducing a three-year tenancy term, with a six-month break clause. This would follow a similar model that has already been introduced in Scotland.
It’s a move that could prove popular among tenants seeking long-term security from their rental property.
Government data reveals that people stay in their rented homes for an average of nearly four years – and yet 81 per cent of rental contracts are assured shorthold tenancies with a minimum fixed term of six to 12 months.
However, initial reports suggest the government’s appetite to go ahead with the measures is shrinking due to fears that it’ll scare off property investors.