14:51 PM, 13th May 2015, About 7 years ago
The Conservative Party has shown minimal intent to further regulate the private rental sector, as opposed to Labour who had proposed many changes including rent controls and a national landlord register.
However there are some fears that relaxed regulations will not only make things easier for good landlords but also for ‘rogues.’ Rogue landlords can undercut other landlords by not abiding by the law and therefore are able to compete on price. In comparison, good landlords who follow the rules and regulations of the BTL sector are likely to have greater costs.
There are, however, two Conservative policies being developed that could be implemented in the near future, both of which could affect landlords. One policy intends to make it easier for tenants to sub-let rooms and is related to small print in the 2015 Budget. This could increase the risk of rent-to-rent scams which involve a middle man pretending to be a normal tenant who then converts shared living spaces into extra rooms and is able to charge rent at a higher price than what they are paying the landlord. This ability for tenants to re-rent rooms to other renters is detrimental to the landlord’s profitability. It also poses a risk to the landlord who could inadvertently break the terms of their mortgage and any landlord insurance and also fall foul of other regulations such as overcroiwding or HMO licensing.
The second policy includes changes to Section 21 (A & B) of the Housing Act. These changes will place restrictions on how and when a Section 21 can be given, but will also make it more straightforward to evict a tenant.
Property 118’s Landlord Insurance scheme’s Jason McClean said:
“Poorly thought out regulations and policies could have a direct effect on landlords and their investments. It is vital that landlords plan ahead to protect themselves and their properties. Getting specialist buy to let insurance should be considered and is recommended.”
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