Buy To Let Mortgages Landlords Face New Rules

Buy To Let Mortgages Landlords Face New Rules



Buy to​ Let Mortgages. Landlords Face New Rules.
As landlords know,​ there’s a​ huge demand for small selfcontain units,​ especially in​ University towns. But as​ from the​ start of​ this tax year,​ landlords are faced with the​ necessity to​ have a​ building licensed for occupation if​ the​ property is​ on​ at​ least 3 floors and several unrelated tenants occupy it.
Whilst this represents a​ problem for those less scrupulous landlords,​ it​ will serve to​ help those landlords wanting to​ enter that market. That’s because the​ tighter regulation will help to​ convince more mortgage lenders that these larger properties which are suitable for division into smaller units,​ are acceptable for a​ buy to​ let mortgage.
The licences introduced on​ 6th January this year are just one part of​ a​ three prolonged attack on​ properties in​ multiple occupation.
Licence for Multiple Occupation
These licences are a​ move to​ improve the​ standard of​ housing. the​ licences are issued by your Local Authority and are expected to​ cost around £100 for each occupant for a​ fiveyear license. the​ preceding inspection will be concerned about fire regulations and the​ size and arrangement of​ rooms and facilities. Even the​ landlord will be assessed with regards to​ the​ ongoing arrangements for the​ management of​ the​ properties. And what if​ a​ landlord tries to​ dodge this licence? That’ll be a​ fine of​ up to​ £20,​000!
Landlords will find more information about this at​ www. propertylicensing. gov. uk
Housing Health and Safety Rating System
This regulation is​ concerned about how the​ building’s condition can affect the​ health of​ its residents. Tenants will be able to​ call in​ inspectors who will be empowered to​ demand repairs and fine landlords £5,​000
Tenancy Deposit Scheme
This forthcoming regulation affects the​ way deposits are held and administered. This results from research that showed that some Landlords refused to​ return deposits and some concocted dubious reasons for deductions. So from October all deposits will have to​ be held in​ official Tenancy Deposit Schemes. This basically means that the​ deposit must be held by a​ scheme administrator who is,​ in​ practice,​ neutral. Then at​ the​ end of​ the​ tenancy,​ both the​ landlord and the​ tenant have to​ inform the​ scheme administrator that either the​ whole deposit is​ returned to​ one party or​ part of​ the​ deposit returned to​ both parties and the​ scheme administrator must pay out in​ accordance with the​ agreement within 10 days of​ receiving notification.
If agreement cannot be reached between the​ landlord and the​ tenant the​ scheme administrator will retain the​ deposit until either the​ tenant or​ landlord obtains a​ final court order specifying the​ proportion of​ the​ deposit to​ which each is​ entitled. the​ scheme administrator will then immediately pay out in​ accordance with the​ court order.
Where a​ scheme administrator returns a​ deposit,​ they must do so with interest added at​ a​ rate yet to​ be specified by Government. Any interest additional to​ this will be retained by the​ scheme administrator and can be used to​ fund the​ administration of​ the​ TDS scheme.
The TDS Scheme is​ being introduced as​ an ammendment to​ the​ Housing Act 2004.
In our view,​ the​ shortterm result of​ all these regulations will be that poorer standard properties will close as​ the​ landlord will be either unable or​ unwilling to​ comply. in​ the​ longer term,​ the​ number of​ properties may well rise again and be at​ a​ higher standard than the​ current stock of​ such properties.
Having said that,​ landlords are certain to​ increase rents in​ a​ move to​ offset the​ additional compliance costs they are faced with.




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