Property investors brace for “war on landlords” under new government
There’s a tension in the air as property investors across the UK fear a “War on Landlords” is on its way under the new Labour government. This comes after the Labour Party outlined a few critical plans for the rental market in its manifesto. While these may not have made headlines during the election campaign, they certainly caused a stir amongst landlords in the country.
Some of the key changes most property investors are worried about include:
- Abolishing Section 21 evictions
- Giving tenants the power to challenge “unreasonable” rent rises
- Introducing new energy efficiency standards for all rental properties
Landlords also believe there will be rising tax rates impacting their earnings on rental properties. Overall, they’re concluding that owning and managing property investments will be exceedingly difficult and costly under a new government.
Is there any basis for these concerns – or is it much ado about nothing?
No known tax increases are expected
Despite what landlords may believe, Labour isn’t planning on increasing general income tax rates. It looks to make the entire tax system fairer, focusing on taxing the extremely high-earners and corporations – like oil & gas conglomerates – to recover more money that can be invested back into the country. Working people aren’t going to suffer.
There might be changes to capital gains tax, but it’s unlikely to affect the majority of landlords. So, there’s nothing to worry about as of yet relating to the increased tax effects of owning property under the new government.
The manifesto focuses on improving renter’s rights
The new government wants to focus on the rental market with a specific interest in renter’s rights. For too long, renters have been held in a chokehold by landlords who can do as they please. The proposed changes to evictions and renter power are designed to help the common person gain more leverage in rental accommodations.
Some landlords see this as a bad thing, but that’s far from the truth. Improving the rights of renters gives landlords a chance to be better. It offers an easy way to make your properties stand out from others, encouraging long-term tenancies and regular income. Instead of seeing this as a bad thing, the focus should be on what can be done to accommodate the changes. Invest in good property management services to ensure all rental properties abide by any new laws and provide renters with a fantastic place to live. Making improvements to energy efficiency further boosts the attractiveness of rental spaces and can encourage more people to rent when they’d otherwise look to buy.
Overall, the fuss about a “War on Landlords” is completely unfounded. Changes are being made to improve the entire rental system, moving renters to a safer and more powerful position. That doesn’t mean property investors can’t make a lot of money in this sector anymore. If anything, when you dig deeper into these changes and truly embrace them, they can be used to elicit higher returns by encouraging landlords to work closer with tenants so they’re more inclined to stick around for longer.
