Private landlords could find it harder to evict tenants in future, thanks to new government legislation.
Landlords will no longer be able to serve tenants with a ‘section 21’ notice, which effectively enables them to cancel the tenancy at the end of the term, without giving any formal reason. This change in legislation will affect England and Wales; the practice has already been outlawed in Scotland.
Under the new proposals, landlords will have to provide a lawful reason to end a tenancy agreement. For example, the tenants might have fallen into arrears with the rent, or the landlord might want to sell the property or move into it themselves.
There have been concerns that some unscrupulous landlords have served section 21 notices to tenants who complain about substandard housing.
However, some buy-to-let investors fear that the new law will make it harder for them to evict problem tenants. A ‘section 8’ notice can still be used for evictions – but these can be challenged in court. The government has tried to address these fears by pledging to improve court processes to make it simpler to take swifter legal action against those who have broken the terms of their tenancy.
SQUEEZE ON BUY-TO-LET PROFITS
This is the latest in a series of legislative changes to hit buy-to-let investors and private landlords.
New rules on the taxation of rental income have been phased in since April 2017, curtailing the amount of interest on a buy-to-let mortgage landlords can deduct from the rental payments received, before calculating the income tax due. The latest phase of tax relief reduction came into effect this April and means many private landlords will now pay more tax on their income from letting out a property.
A 3% stamp duty surcharge (4% in Scotland) has also been introduced on additional property that is not a main residence and applies whether or not the buyer has a mortgage on their existing property.
If you think you may be effected, please let us know.
The value of your investments and the income from them can go down as well as up and you may not get back the full amount you invested.
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Levels and bases of taxation and tax reliefs are subject to change and their value depends on individual circumstances. Tax laws can change.
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