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Buy-to-let landlords could be said to be facing hard times. They are set to find their income tax relief on mortgage interest restricted to 20% by 2020, and have been hit by higher Stamp Duty (and equivalent taxes in Wales and Scotland), combined with the recent rise in interest rates.

Buy-to-let mortgage completions fell by more than 11% year on year to June5, as the new tax rules continued to bite. Many landlords are considering re-mortgaging rather than taking out loans for new property purchases.

More landlords are setting up as limited companies; 18% of private rentals in England are now owned by limited companies.


With many councils now introducing licensing schemes for private landlords, (over 70 have already gone down that route) more landlords will be required to hold a licence from the local authority where the property is located. In addition, the criteria for Houses in Multiple Occupation (HMOs) will be broadened from October this year. Any property occupied by five or more people from two or more households will be considered an HMO. This brings additional fire, gas and safety obligations.


In 2019, the proposed ban on residential letting fees for tenants is expected to come into force (Scotland introduced a ban in 2012). Whilst tenants will still be expected to pay rent, security deposits and holding deposits, default charges and fees to vary or terminate their lease, no other fees will be allowed. This could see letting agents passing on costs for reference checks or application processing to landlords.

There are also proposals being discussed to introduce compulsory three-year contracts for residential lets in England. These would include a break clause which would allow tenants to end their agreement earlier if they wish to.

5UK Finance, Aug 2018