A raft of new Government legislation has lead to many landlords deciding to sell their buy to let property. And this comes at a time when tenants are feeling the squeeze from rising rental prices. The online title ‘This Is Money’ reported that almost 4,000 landlords decide to sell buy to let houses every month.
So what is making landlords sell buy to let property?
The answer is quite a lot. As landlords of a large number of properties we spend a good deal of time managing tenancies. And so we know what it takes. Here we list the biggest changes recently introduced:
Changes in the way mortgage interest relief is accounted for
The Government have in their infinite wisdom finally declared war on the humble buy to let landlord. Whilst any other business is able to offset financing costs of their business, landlords are now taxed on this too. All too often this has lead to landlords now falling into the 40% tax bracket. This as a result of having a second income through no fault of their own. It’s no surprise many landlords have subsequently decided to sell buy to let properties.
There can be no doubt that Selective Licensing has been one of the most onerous forms of legislation to have been introduced in recent years. Landlords up and down the land have long been arguing that such schemes were only introduced as a means of local authorities generating additional income. Whilst compliant and willing landlords willfully submit their applications it’s the landlords that continue to hide in the shadows that cause most of the problems. And many landlords have simply found this one form of new legislation too much. Ultimately they have decided to exit by selling their properties with tenants in place.
Unfortunately fire safety is all too often given the shrug by both landlords and homeowners as unimportant. How wrong this is. The UK Government ruled that from 01 October 2015 smoke alarms must be fitted on all floors within rental properties. We think this should be taken one step further. We say that smoke alarms should be fitted wherever it is felt there is a risk of fire. An example is when setting washing machines, dishwasher and tumble dryers. These are often set to run either whilst the home is unoccupied or on a cheaper nighttime rate. In this example a simple battery operated smoke alarm situated on the ceiling in this space could be all it takes to stay safe in your home. Far better to have an alarm sound to warn of smoke before it develops into a full scale fire.
We often find that when tenants trigger a smoke detector perhaps through burning toast, their first reaction is to remove the battery. Another common problem is what happens when the battery starts to fail. As the alarm starts to remind us of a low battery with a bleeping sound again the battery is simply removed. Whilst this is fine in principle, all too often the battery is never replaced and this creates a real risk.
Fire extinguishers & fire blankets
It still surprises us how many homeowners do not consider a fire extinguisher or fire blanket an essential tool. There can be no doubt that presented with a small fire most of us could tackle this if only we were better prepared.
Electrical appliances and wiring
Landlords today are expected to employ expert electricians to carry out full wiring checks every five years. However, what most people do not know is that they are also expected to have Portable Appliance Tests (PAT) carried out once a year. The PAT test should be made on all appliances provided by the landlord. These tests are only necessary on appliances that are more than a year old. The test checks for both safe operation of the appliance and also the condition of the wiring and the electrical circuit. The expectation is that new appliances are 100% safe during their first year of ownership. This is because they have been built under exacting conditions in regulated factories and fully tested.
It is widely expected that Government will shortly announce that all buy to let properties have a valid Electric Inspection Condition Report. This will become a legal necessity for all landlords with additional costs for making sure a property is always electrically safe.
PAT tests should include electric ovens, toasters, kettles, microwaves, hoovers and you guessed it – fridge freezers. In time we will discover more about the fridge freezer within the Grenfell Tower fire.
There is nothing stopping homeowners today from having their own PAT tests carried out. The typical cost is just £40.00 a year.
Who knows what the future holds. Many landlords who remain in the market will be hoping for significant rental increases as rental property supplies fall. As they say, the proof of the pudding will be in the eating!
If as a landlord you have been thinking of selling your property contact our experts at National Property Buyers. Our team are on hand to answer any questions you may have.
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