What Does Boris Johnson’s Election Victory Mean for Landlords?
A glance through the Conservative manifesto reveals the plans Prime Minister Boris Johnson and his new government have in store for landlords.
Near the top of the list is banning Section 21 no-fault evictions. The process lets a landlord in England regain possession of a property without giving a reason, providing at least two months’ notice.
Instead, landlords must give one of several specific conditions to evict a tenant. These would cover several reasons, like a breach of tenancy by the renter or a wish for the landlord to sell the home.
The idea is like a process already running in Scotland. Another policy idea is the lifetime deposit or tenant passporting, which will stop tenants from having to tie up hundreds of pounds when leaving a property while getting the money to put down as a deposit on a new home.
The policy is scant in detail but suggests a single, portable amount of money that follows a tenant from home.
Other reforms already in the pipeline include:
- Energy efficiency rules that stop the letting of homes with an Energy Performance Certificate rating of F or G from April
- The final phase of rules limiting claims for tax relief on mortgage interest payments for higher rate taxpayers. Instead of claiming at their marginal rate of 40% or 45%, all landlords will receive a 20% tax credit on loan interest payments.
- Private Residence Relief is changing - and the measure will likely increase capital gains tax bills. Landlords can claim an 18-month CGT exempt period when selling a property they have lived in as their home, but this reduces to nine months from April.
At the same time, landlords cannot claim lettings relief unless they have shared their home with a tenant.
Lettings relief offers landlords a tax break of up to £40,000 on selling a former home rented out to tenants.
The Tories are also blowing hot and cold on rent controls. Secretary of State for Housing Robert Jenrick has announced both rent controls are not on his agenda and that he might consider a scaled-down version of the controversial measure in recent weeks.
Subscribers get full access to exclusive content, including forms, articles and discounts, plus our time saving Tenancy Builder tool.
Signup for our free weekly digest and get the latest news and guidance straight to your inbox (some content requires a paid subscription).
View Related Handbook Page
Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.