“Who would be a Landlord?: The trouble with buying to let”
Author: Ian Jones
As of 1 February 2016 the Government’s ‘Right to Rent’ law came into force. This requires private landlords to check, prior to the commencement of any new tenancy, that a tenant or lodger can legally rent a residential property in England and Wales. These checks apply to any tenant aged 18 or over even if:
- They are not named on the tenancy agreement;
- The tenancy agreement is not in writing; or
- There is no tenancy agreement at all.
A landlord will be required to check which adults will live at the property which is being let, see original documents that allow the tenant to live in the UK, check the documents are genuine and keep copies of the documents that have been provided by the tenant(s).
There is a civil penalty of up to £3,000 for renting a property to anyone who is not entitled to live in the UK with the first time penalty being a reduced £1,000. If a landlord is under suspicion of having rented their property they may get a ‘referral notice’ informing them that they are under investigation. They will then be asked to provide evidence that the appropriate checks have been carried out. Quite how a landlord would become subject to an investigation remains unclear.
As if the above was not enough for private landlords to contend with the Government made an announcement in its Autumn Statement that, as of 1 April 2016, any additional residential property purchase would be subject to an increased rate of Stamp Duty Land Tax (SDLT) at 3% above the normal rate. Unfortunately, the Government has been rather vague on the details since the announcement. So far as we are aware the increased rate will apply to any additional residential property unless the purchaser is a corporate body or fund purchaser that makes significant investments in residential property. What constitutes ‘significant investment’ will no doubt be announced in due course but it is likely that this exemption will require ownership of more than 15 residential properties.
As soon as we have any further information in relation to the change in SDLT we will update our website so please watch this space.
In the meantime, if you are a private landlord and have any questions, please contact Ian Jones, in our Property team.