A recent study into the buy to let market has found that recently there has been a significant rise in the cost of letting a property. The total cost of letting your property today has increased. The increasing costs of becoming a landlord may prevent property owners or investors from entering the Buy to let market in UK according to a lettings business.
There are many reasons for the increase in costs of the buy to let market. The Government has recently released new regulatory proposals for the property rental market. Under the new regulations, landlords will need to register themselves on a national landlords register and pay an annual licence fee of £50.
According to some property businesses, the existing regulations are already in place in the rental sector and new legislation are not necessary. According to lettings analysts, further legislation will only prevent new landlords from entering the property lettings market.
Already there are many costs for a landlord purchasing a property. A landlord purchasing a property will need to pay for a gas safety inspection which can cost approximately £75. Landlords purchasing a property also require an electrical safety inspection which can cost over £100. An energy performance certificate costs a further £100. They also incur a tenant finding fee of nearly £500 from Estate Agents and they also pay inventory charges. Some landlords will also require an HMO (Houses in Multiple Occupation) licence at an approximate cost of £800 and a fire certificate at an approximate cost of £400. Unfortunately a landlords needs to pay for all these items before being able to rent their properly out and receive rent from the tenants.
The above mentioned expenses that Landlords have to incur can add up to over £2,000 and yet landlords are potentially going to be subjected to more fees under the new Government proposals. In addition to all these expenses, landlords also face ongoing obligations for repair and maintenance of the property and the tax liability on the income generated.
The property market is already suffering form the receding economy. In the property market in UK, Landlords already face problems from government legislations. Adding new registration schemes with an additional licence fee will only make it worse for landlords and deter people from entering the property market. According to property analysts, we need to do more to encourage landlords to enter and remain in the market. Having more landlords is good for the market as it promotes choices for tenants. As such more people should be encouraged t o enter the market as landlords and not discouraged from doing so.