0:02 AM, 1st June 2023, About 9 months ago 1
The Renters’ Reform Bill is a prime opportunity for landlords to reassess their property portfolios and objectives before the proposed legislation reshapes the private rented sector (PRS), one firm says.
Guy Coggrave, the managing director at GSC Grays, says now could be the perfect time for landlords to restructure their investments or explore new opportunities.
Though the legal changes are not expected to take effect until late next year, this window provides landlords time to consult with professionals and gauge the Bill’s impact on their operations.
Among the legislation’s aims is to eliminate Section 21 ‘no-fault’ evictions.
Mr Coggrave said: “Now is the time to ensure that your properties align with the forthcoming regulations, generate reasonable returns on investment, and meet your objectives.
“For some, this may be an opportune moment to restructure or exit portfolios, leveraging the current favourable capital gains tax environment.”
He added: “Considering the potential for future changes in government and obtaining professional advice will enable landlords to assess property values and explore alternative investment avenues, such as commercial real estate.
“Essential to those remaining in the sector will be access to the right management systems and guidance.”
Upon receiving Royal Assent, the Bill will be implemented in two stages with the government expected to give at least six months’ notice for the first stage.
This is when all new tenancies will become periodic and subject to the new rules. The second stage will extend these regulations to existing tenancies.
Mr Coggrave says that landlords must ensure their properties align with the proposed legislation while still generating a reasonable return on investment and fulfilling their objectives.
He said: “For some, now may be a sensible time to restructure or exit portfolios, making the most of the current relatively low capital gains tax position.”
Many tax experts predict that capital gains tax rates could rise, especially if there’s a change in government at the next General Election.
That prospect should also encourage landlords to seek professional advice to evaluate their property values and explore options like portfolio restructuring or investing in commercial real estate.
Mr Coggrave says that for those who remain in the sector, it will be crucial to have the right management systems and guidance in place for success.
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