Warning that landlords 'do not understand changes'

AFS Team·24 June 2019·4 min read
Warning that landlords 'do not understand changes'
More than a quarter of landlords have confessed they do not understand changes that have been introduced to the market, research reveals. The findings from Market Financial Solutions is aimed at financial advisers so they can warn their buy to let clients who may be struggling to keep up with rental sector reforms. The firm questioned 400 landlords and found that 30% of them did not understand the licensing changes for Houses in Multiple Occupation. These changes were brought in last October to expand the scope for landlords who will now need an HMO licence. Also, 28% of landlords say they are unaware that the government is currently consulting on abolishing Section 21 notices which are better-known as no-fault evictions. Confusion over the tenant fees ban There is also confusion over the tenant fees ban that was brought in on 1 June. That's because 27% of landlords said they were concerned about the ban and 19% of landlords said they were not sure how the ban would affect them. The new rules mean that letting fees being paid by tenants in the private rental sector are now banned. Worryingly, despite the sector being hit with several tax reforms in recent years, 25% of landlords said they were not aware that from April they had less tax relief on mortgage payments. The chief executive of Market Financial Solutions, Paresh Raja, said: "The regulation and legislation governing the UK's rental sector is evolving constantly and the research shows clearly that landlords are struggling to keep pace. "From the abolition of Section 21 and HMO regulations, these are significant reforms that are rightly designed for protecting tenants." Landlords feel they are being unfairly targeted He added that there was evidence of growing frustration among landlords who feel they are being unfairly targeted, particularly with stricter taxes. However, Mr Raja says it is essential that landlords who rent out a property must understand the new reforms. The director of policy at the National Landlords' Association, Chris Norris, said landlords have been confused by the government's 'haphazard approach' and added that there needs to be a 'more cohesive and clear approach' to regulation affecting landlords and tenants. Buy to let mortgage activity increases Meanwhile, new data reveals that buy to let mortgage activity grew slightly in April. The figures reveal that landlords took out 5,100 buy to let mortgages, a rise from the previous month's figures of 5,000. The data from UK Finance also show that 14,400 remortgages were agreed in the buy to let sector, a figure unchanged from March.