Many buy-to-let landlords are finding it hard to keep on top of the changes to rules and regulations surrounding the private rented sector

More than a third of landlords were unaware of the mortgage tax relief changes that came into play in April 2017, according to a recent survey by YouGov, commissioned by The Mortgage Works (Nationwide Building Society’s buy-to-let arm).

A similar number were in the dark about the additional stamp duty on second homes that was introduced in 2016, and nearly half of landlords were unaware of moves to make landlords, rather than tenants, pay lettings fees.

The impact of recent policy changes brought in by the Government is making 44pc of landlords consider a rent increase, 10pc cut back on property maintenance, 14pc ditch their letting agent and start self-managing and 22pc to think about selling up.

More than a third of landlords were unaware of the mortgage tax relief changes that came into play in April 2017, according to a recent survey by YouGov

If that all spells a nightmare for landlords in the Private Rented Sector, it’s even gloomier for tenants, who face a dwindling supply of available rental property, lower standards and higher rents.

A new alliance

With this as the backdrop, Nationwide has formed a new cross-industry alliance ‒ including the National Landlords Association (NLA), Association of Residential Letting Agents (ARLA) and Shelter – to help landlords deliver good, affordable homes, protect tenants and advise Government on PRS policy.

As Nationwide’s chief executive Joe Garner says: “Most landlords want to manage their property well and look after their tenants, but because letting one or two properties is often not a landlord’s full-time job, many are left struggling to keep up with the ever-growing list of responsibilities.”

Mounting pressure: some landlords struggle to juggle their responsibilities Credit: Getty

Kate Faulkner, an independent property commentator and buy-to-let landlord who set up a similar group, The Lettings Industry Council, with Savills in 2015, is all for Nationwide’s new forum. “The private rented sector (PRS) is so complex, you just can’t keep up with it all yourself,” she says.

“The interest of landlords and tenants are usually far more aligned than they are perceived to be – and the industry as a whole needs more collaboration. If lenders, insurance companies, landlords and lettings agents all work together more, they can improve the PRS without more legal changes – which have so far proved ineffectual because they are mostly unenforceable.”

Ringing the changes

Lenders could start, she says, by insisting that inexperienced landlords use a self-regulated agent who offers client money protection. “Currently the blame is usually placed on the landlord or tenant if something goes wrong but it’s in the lender’s interest to ensure that money is protected,” says Ms Faulkner.

She gives another example where lenders could up their game. “They will currently lend on properties whose appliances have an F or G energy rating – even though you won’t be able to rent these out from next April under the new Minimum Energy Efficiency Standards.”

Implementing the changes

The growing band of “accidental” landlords – those who decided against selling their property and renting it out instead in the current Brexit-hampered climate – are the ones most likely to be caught out by new policy changes.

“They are likely to only discover how the Government’s legislative moves affect them when they come to complete their tax return, buy another property or sell. By then it will be too late and they will need to cough up – and eventually, if they continue to sustain a loss, it will be passed on in the form of rent increases,” says Alexandra Morris, managing director of online letting agency MakeUrMove.

She proposes “a means tested-style rollout” of some of the planned changes, “plus longer time periods for implementation and only targeting landlords with more than two or three properties.”

Using a letting agent – which about 40pc of landlords do not – is one answer, “though it doesn’t necessarily remove the risk as it very much depends on the agent and their awareness,” says Ms Morris.

What’s clear is that there are big issues in the PRS that need to be discussed – and an audience who could really do with understanding the answers. Perhaps Nationwide’s new alliance will be a step towards helping them.

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