A new year brings with it fresh opportunities to maximise the potential of your property portfolio and grow your business. It also brings new changes to the private rental sector.
So, what will the rental sector look like in 2020? And how can landlords, letting agents and property professionals keep abreast of changing regulations? Our rental property predictions 2020 looks ahead to key events in the industry.
From an overview of regulatory changes in the past year, to upcoming developments, we’re looking ahead to what 2020 will bring to the rental industry.
What Happened in the Rental Sector in 2019?
Before we start looking ahead, let’s catch up on some of the most important changes and updates to the private rental sector over the last year and what effects they’ve had on the industry;
Making Tax Digital
In 2019, the government announced that they would be helping small businesses convert to a new digital tax system to be fully implemented by the end of 2020 called Making Tax Digital.
From April 2019, VAT tax records and returns went digital, affecting landlords with an annual rental income of over £10,000. This change required landlords to use software or apps to keep track of tax records and to update HMRC through a new, digital tax account, if they weren’t already. Hopefully, this has made doing taxes more accurate and efficient for the majority of property professionals.
Letting Agency Fees Ban
February 2019 saw the introduction of the Tenant Fees Act 2019, prohibiting many of the fees required by letting or estate agents. From 1st June, letting agencies were no longer able to demand fees for;
- Security deposits over five weeks rent
- Holding deposits over one weeks rent
- Change in tenancy costs over £50
The Letting Agency fees ban raised alarm among some parties, with ARLA claiming that a blanket tenant fee ban would ‘put additional pressures on landlords, with fewer tenant checks and a lower quality of service’.
In 2019 PropTech became the buzzword on the lips of almost everyone in property. But what does the term actually mean? Put simply, PropTech or Property Technology is all about the digital transformation of the property industry, from big data to VR.
Moving tenant checks online and Apps that help landlords manage their property maintenance have been making everyday tasks faster, easier and more secure for professionals in all areas of the property industry.
For example, Kaptur is a digital property inventory system that allows users to manage work flows, reports and inventories all in one place.
This trend for digitalisation shows no signs of losing momentum as we move into 2020.
What’s New for 2020 in the Rental Industry?
Now, let’s turn our attention to upcoming changes that could have an effect on the private rental sector in 2020;
Abolishing Section 21
The new Conservative government has announced plans to abolish Section 21 repossessions in order to protect tenants. This change is likely to be implemented by the end of 2020.
This proposition has caused alarm amongst several landlord bodies, including ARLA, who are concerned that it will make it harder for landlords to regain possession of their properties if needed.
Good or bad, this will result in changes to the way landlords and tenants can legally end tenancy agreements. For landlords, this means following the Section 8 possession process set out in the Housing Act 1988.
Changes to Mortgage Interest: Section 24
By April 2020, tax relief for buy-to-let landlords will be reduced to the basic rate of income tax and landlords will no longer be able to deduct any mortgage interest payments from their rental income.
In addition to paying more tax on rental properties, this change could even move some landlords up into a higher tax bracket.
Making Tax Digital
The scheme to completely digitise the tax system by the end of 2020 aims to make taxes more accurate, efficient and easier to manage.
But what does this mean for landlords and rental property businesses?
In addition to minimising the chance of error, a digital system should allow landlords with multiple properties to stay on top of their taxes more easily. With all the information accessible on a mobile device, you will be able to see how much tax you owe ‘as you go’ rather than waiting to find out at the end of the tax year.
However, if you’re not naturally tech-savvy, the new system might take a little getting used to – so you better get started!
Brexit and the Rental Industry
Regardless of your opinion on Brexit, landlords and property professionals may take some comfort as uncertainties regarding the effects on the housing market begin to stabilize.
Although a lot is still up in the air, it looks like we are definitely leaving the EU so landlords can start making long-term plans to grow their portfolio.
The effect of Brexit on the rental industry could even be a positive one, with an increasing number of first time buyers delaying getting onto the property ladder while agreements are being finalised.
Continued Demand for Rental Properties
On the whole, 2020 looks set to be an exciting and prosperous year for the private rental sector.
The number of people living in rental properties in the UK has been steadily growing over the last few years, and this looks like a continuing trend as we move into 2020. Clearly, this is good news for those working in the sector who are likely to enjoy relatively stable returns on investment.
Protect Your Property Investment in 2020
Keen to maximise the potential of your property portfolio in 2020? That’s where we come in.
Ensure your investment stays protected, attract the right tenants and encourage long-term tenancies with the help of our varied property services including;
- Property inventory reports
- 360 virtual photography
- Right to rent checks
- Mid term reports and inspections
- Property appraisals
- CO and Smoke reports
- Check in/check out reports
Want to find out more? Browse our property inventory services to get started.
Keep up to date: Free newsletter
You might also like
What does the end of the stamp duty holiday mean for the property market?Upload on April 7, 2021 by Lydia Horsley
The introduction of the government’s stamp duty holiday scheme has had a significant positive impact on the housing market but there is now speculation about what happens when this popular scheme begins to wind down from June onwards and the effect it will have on buyers’ behaviour and the market. Why was the stamp duty [...]READ MORE
What is the HHSRS guidance for landlords?Upload on April 7, 2021 by Lydia Horsley
If you are a landlord or have responsibility for managing a rental property, you need to ensure that you are aware of your obligations under the Housing Health and Safety Rating System (HHSRS), or you could find yourself facing a hefty fine. What is the HHSRS? The government’s guidance on the HHSRS states that the [...]READ MORE
What landlords need to know about Smoke and Carbon Monoxide alarm verificationUpload on March 1, 2021 by Lydia Horsley
Are you keeping your tenants safe and your property protected? Are you sure that it has fully functioning smoke and carbon monoxide (CO) detectors installed? Here’s a reminder of your responsibilities to your tenants as their landlord. What are your responsibilities? Regulations for private sector landlords were introduced in October 2015 detailing a legal responsibility [...]READ MORE
Rental property visits during lockdownUpload on March 1, 2021 by Lydia Horsley
Despite the challenges of lockdown, landlords and property agents still have responsibilities to tenants to maintain their properties. At No Letting Go, we have tailored our service to ensure that we can still deliver regular property checks safely and effectively even when we cannot physically visit a property. Keeping priorities in check The landlords and [...]READ MORE