Following a year of uncertainty, what might happen for landlords in 2021?
There’ll be some big issues facing landlords who buy property to rent out next year, including legislation, tax rises and the political climate.
Here we take a look at these issues in three important questions.
Landlords have benefited from a stamp duty cut, which the government introduced to help boost the housing market during the coronavirus outbreak.
While the three per cent surcharge on buy-to-let properties and second homes remains, landlords buying a new property haven’t been hit twice by the tax, like they normally would.
This is because the stamp duty holiday applies to the first £500,000 of a home’s purchase price.
It means a potential saving of £2,400 on the £245,000 average price of a home, or up to £15,000 on homes costing £500,000 or more. All landlords would need to pay is the three per cent surcharge.
But with the stamp duty holiday scheduled to end on 31 March, landlords will see stamp duty return to normal and the cost of buying a new property rise.
Some groups are calling for the stamp duty holiday to be extended, or be tapered back to previous levels. In this scenario, people who haven’t had time to complete their purchase would still be able to benefit from the perk.
Paul Broadhead, from the Building Societies Association, said: “Continuing with the proposed cliff edge end could potentially have a damaging impact on the property market, particularly if those whose sale doesn’t complete within the deadline walk away from the transaction.”
The coronavirus pandemic has had a big impact on the housing market, for both landlords and tenants.
The beginning of lockdown saw a ban on tenant evictions, while landlords were offered mortgage payment holidays.
The ban didn’t stop a landlord from serving notices on a tenant, such as Section 21 to seek possession of a property, or Section 8 if a tenant has broken the terms of the tenancy.
The ban only stops evictions, which is defined as forcibly removing a tenant from a property – for which landlords need the courts.
The industry raised the issue of a ban on Section 21 notices prior to the coronavirus pandemic.
Thi is being covered in a new bill called the Renters’ Reform Bill, which will ban ‘no fault’ evictions.
The bill will also aim to improve the court process to make it easier and quicker for landlords to repossess their property in legitimate circumstances such as anti-social behavior or rental arrears.
Landlords may be concerned about the impact of Brexit both on the economy and the housing market.
Brexit negotiations are continuing right up until the transition period ends on 31 December, giving landlords little time to prepare for the outcome of the discussions.
Landlords might be particularly concerned about the rules on immigration and how this affects the status of non-EU citizens wanting to rent in Britain in relation to the government’s Right to Rent policy.
This policy states that a landlord must check a tenant’s immigration status and check if a tenant can legally rent their property.
The government has a dedicated website you can use to check how to prepare for the changes.
What do you think 2021 has in store for landlords? Let us know in the comments below.
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