2015 is shaping up to be a challenging year for landlords!
First of all, the General Election in May is causing a great deal of uncertainty.
Here are the main issues we believe are facing landlords in the coming months:
Labour have announced that, if they win the 2015 General Election, they will introduce "rent caps" or "rent indexation" as they call it.
One of the UK’s largest agents has warned that 60% of its landlords will leave the market if rent controls are introduced.
Earlier this week, Managing Director Glynis Frew said: “Whilst we are seeing positive activity in the lettings market, we are concerned about the introduction of rent control legislation.
“Some 60% of our landlords have said that they would exit the rental market if such rent controls were put into place.
“Good landlords already have to abide by a host of new pieces of legislation and we feel this sector needs more support, rather than prohibitive measures".
Mandatory landlord licencing
It appears the government is stepping in to make local authority landlord licensing less severe and more uniform in its application.
A Draft Order put before Parliament under section 250(6) of the Housing Act 2004. It sets out specific sets of conditions which, if they apply to an area, will permit the local council with responsibility for housing (usually the district council) to designate parts of its patch as eligible for landlord licensing.
The Order sets out that for an area to be designated as subject to selective licensing it must contain a “high proportion of properties in the private rented sector, in relation to the total housing accommodation in that area” - although it does not set a figure or percentage.
If such an area then has one or more of four specific conditions, the authority may consider introducing licensing.
This means that the spectre of landlord licencing has not completely disappeared!
Liverpool, Croydon, Newham, a four parts of Wirral, all have mandatory landlord licencing in place or in the pipeline, and there are more being confirmed in the coming months.
The U.K. recently celebrated 6 - yes six! - years of the Bank of England base rate at 0.5%.
While the Monetary Policy Committee are not showing any signs of wanting to raise the base rate, it can't stay this low indefinitely.
This gives landlords a great deal of uncertainty.
Following a nasty sting in the tail for landlords in the 2015 Budget earlier this week, a landlords association has slammed the government’s Budget as “a nightmare” because of its unexpected measures to allow sub-letting.
The small print of the Budget, released after the Chancellor’s statement, outlines plans to make it illegal for private sector tenancy agreements to include clauses that prevent the sub-letting of the property.
“The measures on sub-letting are a nightmare in the making and smack of ‘back of the fag packet’ policy making” claims Alan Ward of the Residential Landlords Association.
“Key questions remained unanswered such as who will be responsible for a property if the tenant sub-letting leaves the house but the tenant they are sub-letting to stays?
“Similarly, given the government wants landlords to check the immigration status of their tenants, who would be responsible for checking the status where sub-letting occurs?
He says that while more detail on the proposal will emerge in the coming weeks “it is difficult to see landlords supporting it.”
Time to exit?
With all this uncertainty, it's unsurprising that many landlords are reaching the conclusion that it may be time to exit their property investments.
However, because of the looming General Election, the property market has slowed down dramatically.
With less activity and confidence, it means that a sale is potentially going to be a lot harder.
But while the "retail" property market is holding its breath, the "trade" property market remains active.
With our combined thirty years experience, we've seen Governments come and go and policy changes galore, but we are always in buying mode.
We can buy your tenanted property for cash with no fuss and no hassle. That means you don't have to worry about serving notice on tenants, void periods, paying standing utilities and council tax.
Your tenanted property can pass seamlessly to us and we will take over the tenancy.
We buy any property in any condition in England and Wales. We can act quickly to ensure that you get a guaranteed cash lump sum in your bank account on your nominated day. We can pay your legal fees and take the property "as seen", even if there are rental arrears or refurbishment required.
Have a look at some of our case studies to see the kind of properties we have bought recently.
Our no obligation service is fast and discrete, and, unlike many companies, it is us who will purchase your property, not pass your details on third parties, such as agents or brokers.
Open Property Group is a new name in the "quick sale of houses" sector with the mission to raise standards and improve customer experience. Give us a call on 0800 990 3939 to receive a no-nonsense cash offer for your property or send us an email at email@example.com
We buy property directly and you won't pay any agent's fees.