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Buy to let may be in danger of becoming a legal minefield warns mortgage chief

A mortgage chief has spelled out what many in the rental sector already know - that the new laws, rules and restraints introduced in recent weeks risk turning the buy to let sector into a legal minefield.

Andrew Turner, director of the commercialtrust.co.uk mortgage broker firm, says that buy to let has become an important part of the national economy and fulfils a genuine social need given the shortage of housing stock and the growth in households privately renting.

However, he insists that many of the recent law changes - which have been extensively covered here on Letting Agent Today, including revisions of Section 21 evictions, threatened restrictions on landlord tax breaks, possible new mortgage constraints plus extra health and safety requirements - have had little publicity. 

"Landlords already face a great deal of uncertainty from tax changes, the threat of mortgage regulation (both at home and from abroad) and a flurry of policymaking. It is vital that policymakers do everything in their power to ensure that all information on changes is as clear and widely available as possible" says Turner.

"The new regulations make it more important than ever for landlords to keep on top of their obligations and keep a record of all of their documentation, as well as each and every repair request they receive and the steps they take to fulfil them.

"If they delegate any aspect of their management, it is essential that they make their [letting] agent aware of the new rules and that the agent keeps the same level and detail of documentation so that they do not inadvertently fall foul of the law" he says.

  • Mark Wilson

    May become a danger, I thought we are already in a minefield! The rental sector looks set to go the same way as managing agents dealing with service charges. Compliance is an ambition rather than the norm.

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    We are rapidly going back to the, "Great Rental Property Collapse" which was somewhere around Harold Wilson's time. That lot introduced so much legislation that landlords just sold up and anybody wanting to live in a house had to buy it. A few got council houses but their availability was limited because tenants never gave them up.

    The only way rental property started to become available once again was when section 21 was introduced. Simply, bad tenants could be quickly kicked out before the landlord started to have financial problems. Now section 21 has been morphed into something else I predict that serious BTL will soon end, perhaps within two years. The remaining BTL will end when good tenants leave and the landlord sells instead of re-renting. This certainly looks to be something that I will do.

    In about five years time we will be back to the situation I faced as a newly married youngster. The only way to get a property to live in was to buy it. There was no other way. If, which I doubt, any politicians are reading this then you need to think very carefully about where young people will cast there vote in a few years time. I think you will find they will prefer to take lets under strict eviction rules which will never apply for a good tenant rather than having to buy small rabbit hutch properties which are a lousy lifestyle choice.

  • Adam Hosker

    There is no drastic changes of becoming a legal minefield, it has been that way for a long time. I would say if the Section 21 changes are an issue it would suggest a "bad landlord" - I can not justify those landlords that issue S21 on day one, now that is banned all for the better.

    The only other change is with landlords not rectifying faults at the property within a timeframe, the last resort being HHSRS being reported.

    Tax Changes are a pain for our accountants and profits.

    Id not disagree with Andrew Turner on the importance of finding a good letting agent, I would go further and ensuring there is a minimum service contact in place.

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    Hallo Adam Hosker,
    I agree with you. Tax Changes are a pain for our accountants and profits. profits

  • Neil Briggs

    Surely landlords shouldn't be the ones telling the letting agency about the changes. As the director of an estate agency I've ensured that myself and the team are clear on all of the relevant changes to legislation. Not enough is being done to make others aware in the industry though, which could be improved upon.

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    A good agent will be able to protect their clients through training and knowledge, something I find lacking within the industry to an alarming amount. Although retired, I just drop in now and again to letting agents and ask them questions as a potential or actual landlord (which happens to be true) and only come away disappointed. I try to keep up with everything via the internet (where everything is there to see) , but there's no end to it and more will come in due course.

    All the legislation appears to be aimed at poor landlords, and they only account for a small percentage. How sad.

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