Whether, you’re new to the landlord-life, a landlord by chance or an experienced property investors, here are five things you should know about rental property.
1. House prices have remained stable
Activity in the buy-to-let sector has bounced back from April’s increase on stamp duty and any uncertainty that has hit the country after Britain’s decision to leave the EU.
Rightmove actually reported a 30% increase in the number of investor enquiries between the second and third quarter of this year.
Review and expert advice page Which? had a look into three of the biggest house price indices and they found out that the average house price increased by 1.6% between June and August. They also warned though that this rate can vary from area to area.
2. Mortgage interest tax relief changes
Following rules currently in place, landlords can deduct mortgage interest payments from their income before calculating the amount of tax they’ll have to pay.
Starting from April next year, the amount landlords can claim will slowly be reduced until 2020, when costs will be deductible at the basic rate of 20%.
This change will especially have an impact on those who pay tax at 40%, and might see a lot of landlords having a significant part of their profits removed.
3. Stamp duty increase
Whilst George Osborne might not be the country’s Chancellor anymore, one of is most controversial policies is still in place. Since April this year, landlords are facing a hike in stamp duty by 3%.
This adds a rather significant cost onto some (more expensive) properties.
Exception to this rule are inherited properties as well as more niche investment forms like hotel investments.
4. Right to Rent checks
Before signing a contract, landlords (or the tenant management) need to make sure their tenants are legally allowed to live in the UK.
If a landlord fails to arrange for that check, they will face a fine of up to £3,000 if they were actually letting their property to a tenant without sufficient rights to live in the country.
5. More buy-to-let changes in the Autumn Statement
Communities secretary, Sajid Javid, may have hinted that further property taxation could be coming along.
Whether there’s any solid foundation to Mr Javid’s statement remains to be seen. Landlords and property investors should keep a keen eye out for new-Chancellor Philip Hammond’s Autumn Statement on 23 November.