New survey reveals that UK landlords are struggling to keep up with recent reforms
New research commissioned by Market Financial Solutions has uncovered that many of the UK’s landlords are struggling to keep pace with new legislative and regulatory reforms that have been introduced in the past year.
According to a survey of 400 landlords, 30% of UK landlords do not understand the changes to House in Multiple Occupation licensing, which came into effect in October 2018.
28% are not aware of the proposed abolition of Section 21, announced at the start of June 2019 to prevent unfair tenant evictions. Over a quarter (27%) are uncertain about the tenant fees ban, with a further 19% saying they understand the reform but are unsure how it will affect them.
When it came to tax, there was also significant confusion:
28% do not understand the reforms to inheritance tax that have changed the tax-free allowance on properties being passed down. A quarter (25%) do not know about the reforms affecting tax relief on mortgage repayments, which were implemented in April this year.
The research also found that far more landlords opposed these reforms than supported them:
44% are against the banning of letting fees, compared to 23% in favour. The abolition of Section 21 (37% against, 16% for), and the changes to buy-to-let mortgage relief (48% against, 16% for) attracted similar disapproval
Landlords in the UK are struggling to keep pace with new reforms that have been introduced over the past 12 months, new research from Market Financial Solutions (MFS) has found.
The bridging lender commissioned an independent survey of 400 UK landlords, all of whom let one or more residential properties to tenants. It found that 30% do not understand the changes to House in Multiple Occupation (HMO) licensing, which came into effect in October 2018 to stipulate on the minimum sizes of rooms.
Almost one in three (28%) landlords admitted to not fully knowing what the abolition of Section 21 means. The reform, which was implemented in June 2019, aims to prevent unfair tenant evictions. A similar number (27%) said they do not understand the tenant fees ban (June 2019) or how it may affect them.
MFS’ research uncovered a similar lack of knowledge when it comes to tax reforms that are likely to impact UK landlords. A quarter (25%) said they are not up-to-date with the latest changes to reduce tax relief on buy-to-let mortgage repayments, while even more (28%) do not understand the reforms to inheritance tax with regards to passing down properties.
The survey also showed widespread opposition to the new legislative changes. Over two-fifths (44%) of landlords are against the ban on tenant fees, compared to 23% who are in favour. The abolition of Section 21 (37% against, 16% for), and the changes to buy-to-let mortgage relief (48% against, 16% for) attracted similar disapproval.
Paresh Raja, CEO of MFS, commented: “The legislation and regulation governing the UK’s rental market is constantly evolving, and today’s research clearly shows that landlords are struggling to keep pace with the change. From HMO regulations to the abolition of Section 21, these are significant reforms that, for the most part, are rightly designed to protect tenants.
Nevertheless, there’s evidently frustration among landlords who feel they are being unfairly targeted, particularly when it comes to the stricter taxes being introduced. It’s essential that anyone renting out a property – even if they would not consider themselves a landlord – understands all the new reforms and takes action to ensure their properties meet the necessary standards and their finances are structured in line with the new reforms.”