- THE ANSWERS TO 5 KEY LANDLORD QUESTIONS FOR 2020
THE ANSWERS TO 5 KEY LANDLORD QUESTIONS FOR 2020
Five key trends are likely to affect landlords in 2020, including legislation, tax, costs, rents and the political climate.
Here we take a look at each of the issues that are expected to intensify in the year ahead.
1. Will rents rise during 2020?
Perhaps the most welcome news for landlords is that rents are expected to continue to rise next year.
The lack of supply of rental properties means that demand will be kept high, with tenants willing to pay extra to secure their preferred home.
2. Will the cost of running a rental property rise?
However, it’s not all good news for landlords as next year is expected to bring increased costs.
A total of 71 per cent of landlords said costs will rise next year, according to a survey by Monmouthshire Building Society.
This follows the introduction of the Tenant Fees Act in June 2019, which removed the fees that letting agents could charge tenants.
More letting agents are expected to pass these fees onto landlords in the coming year.
3. Will landlord taxes increase?
Landlords have seen their tax bill increase following a phased reduction in the tax relief they can claim on mortgage interest.
Starting in April 2017 it reduced from 100 per cent to 75 per cent. A year later in 2018 the allowable tax relief was reduced from 75 per cent to 50 per cent. It then reduced from 50 per cent to 25 per cent in 2019.
From April 2020 the tax relief landlords can claim on mortgage interest will reduce to zero.
4. Will new landlord legislation come into force?
Legal changes affecting landlords are also expected to continue into 2020.
One piece of legislation that has already been announced involves new rules around Energy Performance Certificates.
From 1 April 2020 landlords won’t be allowed to let out a private rented property – including existing tenancies – that don’t meet the minimum E rating.
5. How will the political climate affect landlords?
The big event in the political calendar for next year is Brexit. There could also be more changes in policy depending on the outcome of the 2019 general election.
David Cox, chief executive of ARLA Propertymark, said: “For far too long, successive governments of all political persuasions have passed significant amounts of complex legislation for landlords.
“As a result, much of this year has dampened landlords’ appetites to invest and expand their portfolios, with many consolidating their assets, or choosing to step away from the sector altogether. This has impacted tenants most, who have restricted supply and have been faced with less choice and paying higher rents.
“Looking ahead to 2020, we hope the government recognises the importance of increasing supply for tenants and uses it as an opportunity to make the market more attractive for landlords.
“This will encourage more landlords back into the market as well as ensure that tenants, including those who are most vulnerable, are not at a disadvantage in being able to find a suitable and affordable home to rent.”