Property investors and landlords who have been in the business for a while will know that new regulatory updates are par for the course. How can you best prepare for upcoming changes?
Knowledge and preparation are key when it comes to keeping up with changes within the property investment and buy-to-let space. Knowing what is – or might be – about to change, from tax to legal requirements, means you can prepare your property and your finances accordingly.
At the moment, one of the hottest topics in the buy-to-let sector for landlords is the Renters Reform Bill. Hailed as one of the biggest shakeups in the industry for many years, the proposals include a number of changes to how the private rented sector operates.
There is currently a lot of uncertainty and debate over when and how the Bill will take effect for UK landlords. The key proposals in it include scrapping Section 21 ‘no fault’ evictions; effectively ending unfair rent hikes through rent review clauses; increasing notice periods for rent rises; allowing tenants to request a pet; and ending assured shorthold tenancies in favour of periodic tenancies.
You can read a more in-depth overview of what the Renters Reform Bill contains here. But knowing what we know, here are some tips to help landlords prepare for any changes.
Tips for landlords
- Appoint a good agent: Studies show that the split between landlords who use an agent and landlords who don’t is almost 50/50. If you’re only letting out one property, it can be tempting to forego using an agent so you get to keep more of your profits by managing the property yourself. However, when it comes to regulatory updates and changes, a good agent can be invaluable. They can stay abreast of all the latest rules and regulations in the sector, helping landlords stay on the right side of the law, with knowledge on everything from health and safety requirements to eviction procedures.
- Get good tenants: Dealing with disputes with tenants, or having to go through a sometimes lengthy eviction process, is perhaps one of the least desirable parts of being a landlord. If and when the rules around evictions change, finding good, trustworthy tenants with a proven track record and strong credit score will become even more pertinent. You should conduct thorough background checks on any prospective tenants, and there are a number of companies that will do this for you. It is also a good idea to have a good relationship with your tenant, which leads onto point three.
- Consider using technology: Technology has an ever-growing and undeniable presence in our lives, and this is no different when it comes to buy-to-let. There are scores of apps, websites and digital offerings for landlords to help make their lives easier, and this can help you keep on top of regulations. For example, there are apps and packages that allow you to communicate with your tenants, as well as keep your documents organised, and remind you when tenancy agreements are up for renewal. This can be particularly helpful for overseas landlords.
- Use a professional inventory clerk: Keeping your property to a high standard is always a priority for good landlords, but under the Renters Reform Bill the onus on providing ‘decent homes’ will be stronger than ever. A professional inventory clerk can alert landlords when their property is falling below acceptable standards, as well as form a report at the start and the end of a tenancy to use as proof if part or all of the deposit is to be used to pay for repairs.
- Price it right: Landlords who use mortgages for their property investment are likely to have seen their costs rise as interest rates have climbed. Meanwhile, rental prices have soared in recent years, due partly due to a shortage of rental homes and heightened demand, and this is expected to continue. In light of upcoming changes to how rent increases are managed, it is therefore hugely important to price your buy-to-let right at the outset, based on a professional opinion of its market value. This must also be weighed up against your outgoings, to ensure that the figures stack up.
Ultimately, staying up to date with the progress of any regulatory updates, including the Renters Reform Bill, is one of the most important things for landlords to ensure they are compliant. In this way, you can be prepared when any changes are made so that they don’t have a negative effect on your property investment.