Chichester Property News: What’s in store for Chichester’s landlords in 2019?

Thursday 10 January 2019

What’s in store for Chichester’s landlords in 2019?

Last year the government rolled out new energy-efficiency requirements for rental properties, additional licencing rules for shared houses, reduced tax relief and launched the Rogue Landlord Database. The pace of change doesn’t look like it’ll be slowing down in 2019, with further changes coming to the lettings market:

The Homes (Fit for Human Habitation) Bill - confirmed
The tragedy at Grenfell Tower provided a stark reminder of the dangers of unsafe accommodation. Social tenants have no effective means of redress over poor conditions (Local Authorities aren’t going to enforce health & safety penalties against themselves) whilst private tenants have to rely on over-stretched local authority Environmental Health teams.

This Bill will give tenants the right to take their landlord to court where the property is not ‘fit for human habitation’ - judged by the criteria already laid out by the HHSRS (Housing Health and Safety Rating System).

Deeper tax relief reductions - confirmed
Until recently a landlord could offset the interest on their buy-to-let mortgages against rental income. In the 2017/18 tax year this changed whereby you could only claim 75% of the mortgage tax relief. This tax year (18/19) it drops to 50% whilst in 19/20 it’ll drop to 25% before being eliminated entirely from April 2020 (in place of a reduced ‘tax credit).

Tenant fees ban - highly likely
A big one for letting agents, who not only charge landlords a fee to find tenants and manage their property, but also apply tenant ‘admin’ fees to cover their costs. Many have abused this and charge punitive fees, which has now led to them being banned entirely (subject to confirmation but almost certain to happen). The upshot of this is that many agencies are already increasing their fees to landlords in preparation, which is likely to lead to rent increases further down the line - meaning long-term tenants will actually get hit the hardest.

Security deposit cap - highly likely
Part of the same Tenant Fees Bill, the government is seeking to impose a cap to security deposits of five weeks rent. Tenants with poor credit, pets or other perceived ‘risks’ who could previously offer an enhanced security deposit now won’t be able to, making them less likely to be granted a tenancy in the first place.

Longer tenancies - likely
The Autumn 2017 budget announced a consultation aimed to provide greater stability to tenants by way of longer tenancies. This consultation has now closed and a response is awaited, however fixed three-year tenancies have been mentioned.

Electrical safety checks - likely
Electrical safety checks every five years are already mandatory at larger shared housing and it stands to reason this will be expanded to the entire rental sector, much like the annual gas safety certificate.

Brexit - who knows!!

With all these sticks being thrown at landlords, whilst few carrots get dished out, it’s no surprise that research from RICS shows a falling number of landlords (even though there’s a rising number of tenants). Those landlords who adapt and provide a good-quality product to a more-demanding pool of tenants will be in a good position to bear the fruits of their hard work.

(This article was featured in the Chichester Observer's property section on January 10, 2019)

Clive Janes, CRJ Lettings

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