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The Tory manifesto contained various measures that are likely to affect landlords now that the conservatives are in power with a working majority.
Existing plans to abolish ‘no fault’ evictions by scrapping Section 21 of the Housing Act were reiterated in the Tory manifesto.
This means that landlords will instead have to serve what is known as a Section 8 notice if they want to evict tenants. These work in a similar way except that they can only be served under specific conditions, such as where the tenant has breached the tenancy.
However, the Tory manifesto also suggested that Section 8 notices will made more robust by adding extra conditions under which they can be used, so as to not leave landlords without the power to evict tenants.
The Tory manifesto also contained plans to introduce a ‘lifetime deposit’ system.
Currently one deposit is usually tied up in the property a tenant is leaving, leaving them with no other option but to raise a second one to secure a new home.
The Conservative lifetime deposit suggestion would instead see one deposit transfer from tenancy to tenancy – though the Tory manifesto was light on the details of how this would actually work in practice.
There are also many reforms for the private rental sector that were not included in the Tory manifesto but were already in place and now likely to go ahead.
Energy efficiency rules that came in last year will be extended to all existing tenancies from April next year. Properties with an EPC rating of F or G will not be able to be rented out from that date onwards.
Next year will also see the completion of tax changes announced in 2015.
From 2020, landlords will no longer be able to claim any tax relief on mortgage interest payments. Instead, they’ll receive a 20 per cent tax credit on their interest payments.
Private Residence Relief will also be changed, affecting ‘casual’ landlords.
Currently, homeowners who previously lived in a property but went on to let it out can claim capital gains tax relief on property sales for up to 18 months after they move out. From April next year this will be reduced to nine months.
However, on the plus side landlords will be relieved that they have managed to dodge the rent controls and tenant right to buy ideas included in the Labour manifesto.