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Trends to Look Out For as a Modern-day Landlord

Housing-Market / Buy to Let Mar 23, 2017 - 12:57 PM GMT

By: Submissions

Housing-Market

They say that property is always a sound investment, yet changes in the economy have led to some suggestions that life as a landlord is soon to get so much more difficult.

There is increased legislation, the markets are changing and in short, there's just a few more obstacles to contend with.


Let's take a look at some of these issues in detail to see just how the modern-day landlord should prepare for the year ahead.

It's becoming costlier to become a landlord

Once upon a time, everything seemed to be in favour of the landlord. Now, legislation is meaning that this isn't necessarily the case.

Already, the markets are seeing a drop in demand due to the 3% extra stamp duty that landlords are now having to pay.

Unfortunately, this is just the tip of the iceberg. Over the next few years, landlords are going to have to slash their mortgage-related tax deductions significantly - to an extent where you won't be able to deduct the costs of the loan. For some, the cost implications could be monumental.

There are other forms of legislation which are fuelling these costs though. More safety regulations are coming into play, with small things like the installation of smoke and carbon monoxide alarms all adding up - particularly for those landlords who own several properties.

Ultimately, the landscape has changed and owning a property as a landlord has suddenly become a much costlier affair.

Rent increases are going to be tougher to implement

If we analyse the economy from another perspective, something else that landlords might have to take into account is the inability to increase rents. It's a known fact that wage growth is slow to say the least and it should go without saying that this has a direct impact on how much rent can be charged.

Following on from the previous section, this can make life as a landlord even more difficult. On the flip side, some industry publications believe that there is a chance that rents will grow above the wage growth - for the simple reason that demand is so high. Additionally, this demand could increase even more so thanks to the new regulations, which could limit the amount of buy-to-let properties that are available. In other words, it could be a vicious circle and while initially it might hurt landlords, in the long-term it may even benefit them.

Property prices could decrease

It would be fair to say that the economy is uncertain at the moment - with Brexit being just one such factor.

It means that experts are under the impression that house prices could falter as a result. For the budding landlord, who is looking to add to his portfolio, this is obviously welcome.

However, from a different perspective, a slow market is something which can put a lot of people off. Again, this can prompt less supply and as such, help indirectly increase rental prices as time progresses.

Disclaimer: This is an paid advertorial. This is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any investing and trading activities.


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