Buy to let – More Doom and Gloom?

There can be no doubt that Government action over the past year will have an effect on the market for residential buy to let properties.  Buyers will need to factor in the new 3% Stamp Duty surcharge on properties over £40,000 and existing landlords will be affected by limits on mortgage interest relief and ongoing pressures on income from regulations for gas appliances, electrical installations and fire-retardant furnishings.  As if these factors weren’t a sufficient deterrent, Landlord’s of older properties in particular now need to pay close attention to the Energy Performance Certificate for the property.  For some time now a Certificate has been required when renting out a property, but the actual contents were largely ignored by both landlords and tenants.  This is about to change.  Since 1st April 2016, tenants of short-term tenancies have the right to require alterations to their property to increase its energy rating if that rating is F or below.  The landlord cannot unreasonably withhold consent to the tenant’s request.  From 1st April 2018, it will be unlawful to let out properties with a rating of F or below.  Listed buildings will be given a further two years to comply, presumably to allow landlords the additional time needed to gain all the necessary approvals.

All of this paints a fairly gloomy picture for the future of buy to let properties, however the continued demand for accommodation shows little sign of subsiding and buy-to-lets could still prove attractive to those who prefer a bricks-and-mortar home for part of their future growth or retirement fund.  All investment decisions should be taken with advice from an experienced and qualified independent financial advisor, and if the decision is to invest, the Kiteleys residential property team, with huge experience of the buy-to-let market, will be on hand to make that investment decision a reality.