30 Dec Goodbye 2017. Hello 2018.
2017 was an interesting and perhaps rather troubling year for letting agents and landlords alike.
We continued to see the effects of the increased Stamp Duty levies that were introduced in April 2016 for those with more than one property and the changes to landlord tax relief that came into force in April of this year. Many landlords chose to leave the market and we have had significantly less buy to let investors registered on our books to buy rental properties.
The announcement that tenant fees will be banned next year came as a blow. This is a large income stream for many agents. It is clear that the banning of fees charged to applicants and tenants is welcomed by the general public as it is assumed that this will lead to renting being cheaper for tenants. However, it is widely thought by industry professionals that this will, unfortunately, have the opposite effect and could lead to many landlords choosing not to use professional agents which could have unintended consequences.
So, we’ve seen increased costs for landlords and agents alike and this is likely to continue into 2018 with more regulation going through parliament. However, it’s encouraging that the private rented sector is quite firmly in the spotlight and that plans are in progress to make it a better place. One of the most exciting announcements this year was the requirement for letting agents to be regulated. This is something that ARLA Propertymark have been lobbying the government for and something that all reputable agents will welcome.
The government have also announced proposals for a new housing court and longer term tenancies. Some believe that a new housing court will take the pressure off the existing courts but others are sceptical. Longer term tenancies should be seen as a good thing too as landlords and tenants alike generally prefer the stability of a longer tenancy.
Banning orders for rogue agents and landlord’s will come into force in April 2018. This will extend to banning those convicted of offences such as burglary and stalking from becoming a landlord. The Housing Minister, Alok Sharma, has also announced recently that licensing will be mandatory for those households that are occupied by five or more people from two or more separate households.
In addition to banning orders, April will see the MEES regulations come into effect. This will have some cost implications for those landlords with older, less energy efficient properties and could lead to some properties being removed from the market as they don’t reach the minimum standards.
May 2018 sees the start of GDPR. We are still to find out the extent of how this legislation will effect us but the lettings industry (as other industries) are bracing themselves for more information about how to become compliant.
2018 will also, of course, see another budget. Labour will undoubtedly continue to put pressure on the government to introduce rent controls and to make non fault evictions illegal. These are policies that, thankfully, the current government are unlikely to take up but there may be pressure to do something similar. Hopefully, the budget will bring more safety related regulations – like the introduction of mandatory electrical testing.
And finally, we have Brexit to contend with. So far, we’ve not seen any mass exodus of our european tenants but we have seen a noticeable reduction of applicant enquiries. With negotiations only just started, it’s difficult to predict how Brexit will affect the private rental sector.
All in all, it’s not going to be an easy ride for landlords and agents over the next few years. However, I do believe that the legislation being put into place is a good step towards improving the experience for tenants where only professional agents and responsible landlords are allowed to operate.
To quote David Cox ARLA Propertymark’s Managing Director….
“Overall, the industry is going through a seismic change and the lettings market we know today will be radically altered over the next five years. This change will be painful for agents, but we firmly believe that the industry will come out of the other end stronger, more professional and with a robust reputation among consumers.”
If you have anything lettings related that you’d like to discuss please get in touch by telephone 01489 579009 or email firstname.lastname@example.org – we’d love to get to know you.
Emma Macgregor MARLA
PS: If you are looking for a ‘smart let’ (http://www.robinsonreade.co.uk/quick-let-or-smart-let/) call us today on 01489 579009 or email us at email@example.com for honest, expert and friendly advice.