Energy-efficiency reforms have been scrapped
In September 2023 the government scrapped the upcoming changes to rules on energy efficiency in rental properties.
These plans included a requirement for all new rental properties to have Energy Performance Certificate (EPC) ratings of C by 2025 and for existing rentals to come up to C by 2028.
These changes were likely to prove very expensive for some landlords – potentially thousands of pounds – and there were concerns about these costs eventually passing on to tenants.
Making Tax Digital has been put back by two years
Making Tax Digital, the UK government’s tax modernisation programme, is now due to start two years later than originally planned.
Originally pencilled in for April 2024, MTD will start in April 2026 for self-employed landlords with an income of more than £50,000 and from April 2027 for those with incomes over £30,000.
Making Tax Digital is a mandatory requirement for eligible landlords to use the MTD system rather than filing Self Assessment tax returns. Landlords will have to keep digital records and submit updates on income and expenses to HMRC every three months.
Buy-to-let mortgage interest rates are falling (slowly)
Landlords who remortgaged their BTL properties in 2023 found their monthly payments rose and while rates are falling slowly, 2024 will deliver a similar sting to BTL landlords either remortgaging or growing their portfolios.
According to Moneyfacts, the UK’s average BTL fixed-rate mortgage is currently 6.02%. While this is cheaper than last February’s 6.40%, it’s pretty much double December 2021’s average of 3.07%.
There may be some ease on the way, however. Inflation is falling and the Bank of England may decide to reduce the base interest rate later this year. This could lower interest rates further – not by a huge amount, but every little helps.
Landlords must meet new standards
Last November the government announced its plans to bring in a Decent Homes Standard to the rental sector. Councils will have new enforcement powers to make sure landlords are adhering to these new standards.
The new standards are yet to be determined after a consultation as the Renters Reform Bill makes its way through parliament.
Landlords who fall short of the Decent Homes Standard requirements could face fines of up to £30,000 and the potential of banning orders, as well as compensation claims for up to 24 months’ rent.
