14th
May 2015
After a few months of threatened rent capping being the future norm, investors in the private rented sector can expect no major governmental changes to the private rented sector.....although there are two changes coming into force.
One is a positive with the new regulations being introduced into the Housing Act, which will make it less painful for landlords to evict problem tenants.
However there is a real concern from the Industry about the government allowing renters to sub-let a property.
Brian Murphy, of a consultant mortgage broker, said: “The biggest concern for landlords is that this will make it easier for tenants to re-rent the property or rooms to other renters."
He continued: “This also increases the risk of rent-to-rent scams, whereby a middle man poses as a normal tenant, converts shared living spaces into extra rooms and then charges rent for on an individual basis at a much higher price than they are paying the landlord.
With the Tories in power, the threats of rent capping and a mandatory national landlord register are now a distant memory.
Brian Murphy also issued a stark warning and said: “This means there is little being done to stop landlords who are acting unlawfully and providing poor quality accommodation, possibly illegally,” Murphy warned.
“Rogue landlords are able to compete on price rather than abiding by the law, undercutting good landlords who have higher costs to ensure everything is above board.”
He recommends that as buy-to-let mortgages are at their lowest level, landlords should consider taking on fixed rates for a longer period.
“As a buy-to-let investor, mortgaging a property gives better returns, as it cuts down the initial investment needed. However, this also means it is absolutely vital that landlords regularly review their mortgage deal.
“Landlords can protect themselves from future rate rises by locking into a fixed-rate deal, which may come with a higher interest rate but will guarantee the same rate for a fixed period of time regardless of what happens to the Bank of England or lenders’ rates.
“Putting aside money each month will also provide a safety cushion if your monthly costs begin to exceed rental income. Even if not needed to cover mortgage repayments, having a ‘rainy day’ fund is good practice: this can prove invaluable should any unexpected expenses or repairs arise, such as a broken boiler.”
News Archive »