2015 has been a typically busy and eventful year in the lettings industry and 2016 looks set to follow the same trend.
We take a look below at some of main things landlords should look out for in the next 12 months.
Private Housing (Tenancies) Bill
This bill was introduced by the Scottish government on 7 October 2015, its main aim being to replace the current system of private tenancies in Scotland. Instead, existing short assured tenancy and assured tenancies will be scrapped in favour of a single new tenancy, known as the private residential tenancy. The government believes that landlords, investors and lenders will be better safeguarded by this new model.
In addition, they say the Bill will offer tenants protection against unreasonable rent increases and provide predictability in the rental market. For example, it permits Scottish Ministers to implement caps on rent increases for tenants in ‘Rent Pressure Zones’.
The Bill is also aiming, through better regulation and management, to make the sector more attractive to investors and other interested parties.
A more in-depth analysis of what the legislation includes can be found here.
Tax return self-assessment deadline
An important date in any landlord’s diary. If landlords do not submit their tax returns by 31 January 2016 they will hit by a fine of £100 from HMRC for being one day late, with the fine escalating as time progresses.
The tax return deadline is midnight on January 31. There is more information on the GOV.UK website about how to go about doing it correctly.
UK Budget changes
The Chancellor announced in July’s Budget that from 2017 he would be clamping down on buy to let landlords by removing the right to claim more than the basic rate tax equivalent in relief for mortgage interest. Tax relief will be slowly phased out, restricting it by 2020 to 20% for all landlords regardless of earnings.
The Chancellor is also tightening the rules about claiming for wear and tear by allowing claims only for money spent rather than the annual 10 per cent of rental that’s currently given automatically. In Scotland these provisions may be affected by any changes in tax powers contained in the Scotland Bill 2015-16 currently going through Parliament, but this is not certain.
Further details are here.
3% buy-to-let surcharge
In April this year Scotland scrapped stamp duty and replaced it with the Land and Buildings Transaction Tax (LBTT), the first tax introduced by the Scottish Parliament in 300 years. It aimed for a more progressive system than the previous ‘slab’ structure of stamp duty.
In the recent Scottish Budget, Finance Secretary John Swinney announced that the extra 3% stamp duty hike on buy-to-let properties and second homes introduced in England in November will be replicated here.
Right to Buy
In England the Conservatives are looking to extend their flagship policy, but north of the border the Housing (Scotland) Act will introduce provisions ending the right to buy. These provisions come into effect on 1 August 2016.
Right to Rent
From 1 February 2016 all landlords in England will be required to check that a tenant or lodger can legally rent a property from them. There are currently no plans to roll this out to Scotland – and the Scottish Government are firmly against the checks in their current guise – but it’s a prudent measure for landlords to keep up with all the latest news regarding Right to Rent to make sure they are fully-versed if it is ever implemented.
Whatever happens over the next year, Letting Solutions can help to look after all aspects of renting out your property. As West Lothian’s first dedicated lettings agency, we have years of experience and expertise to draw on and we help landlords to maximise the income they make from their rental properties.
For more information about the services we offer, please get in touch with us on 01506 496006. If you are eager to know the value of your rental property in the current marketplace, why not check out our handy instant online valuation tool?