One in four landlords don’t feel on top of changing regulations, with some saying it is giving them sleepless nights and is making them consider quitting the market altogether.
New research by Direct Line business insurance found that of those who didn’t feel on top of the regulatory landscape, 36 per cent said it is difficult to cope with the speed of change.
The buy-to-let market has seen massive regulatory change in recent years, particularly during the pandemic, which included a temporary ban on evictions as tenants struggled to pay their rent.
A third of stressed landlords are considering selling their investment property – a move that could affect the supply of rental homes available to tenants
It highlights the importance of using a lettings agent to manage a property on an on-going basis.
Depending on the management service and contract agreed with the lettings agent, they will be able to keep up to with the changes in regulation and make sure they are implemented.
The research found that 20 per cent of landlords said they can’t afford the necessary legal advice, while 13 per cent find it challenging to comprehend regulations and how exactly they are affected.
The research revealed regulation issues that landlords are not aware of, including licensing scheme changes, smoke and carbon monoxide alarm requirements, and changes to filing deadlines for reporting and paying capital gains tax when selling a property.
The research found that 27 per cent of those landlords not up to speed wouldn’t know where to start when it comes to understanding regulations
|Proportion of landlords who are not aware of the issue
|Licensing scheme changes
|16 per cent
|The possibility of health and safety regulations
|15 per cent
|Additional sustainability standards to conform to
|13 per cent
|New smoke and carbon monoxide alarm requirements
|12 per cent
|Changes to filing deadlines for reporting and paying capital gains tax on the disposal of properties
|11 per cent
|Planned changes to minimum standards for Energy Performance Certificates
|10 per cent
|Inflation and the effect this could have on buy-to-let mortgages
|7 per cent
|Source: Direct Line business insurance
The regulatory issues are also having a psychological impact on landlords, according to the research.
It said that nearly six in 10 – at 58 per cent – said that keeping on top of regulatory change is stressful.
And a third of stressed landlords are considering selling their property because of it and a further 26 per cent are having to take time off work. One in five – at 22 per cent – have had sleepless nights, while the same proportion have experienced long-term mental health issues due to the stress.
When asked what they would find most helpful in reducing stress levels, one in five said employing a managing agent to oversee these issues on their behalf would help, while 19 per cent mentioned having knowledgeable friends and family members to assist when needed.
Some landlords are taking proactive steps to monitor the regulatory landscape and are using a variety of methods to ensure they’re fully up to speed.
Of those who feel on top of these issues – at 67 per cent – one in three carry out their own research, 31 per cent pay a letting agent to help keep them up to date, 22 per cent read landlord trade publications and newsletters, and 18 per cent receive advice from a lawyer.
Jamie Chaplin, of Direct Line business insurance, said: ‘Landlords are faced with a range of challenging regulatory changes and issues and our research suggests this is causing them a range of problems.
‘In some cases, this is causing stress and anxiety, which is leading many to consider selling their properties.’
More landlords are selling up
Separate research last month from the lettings body Propertymark found that the average number of landlords leaving the sector stood at two per agency branch.
Timothy Douglas, of Propertymark, said: ‘The number of statutory provisions on private landlords has risen significantly over the last decade to improve the sector and the lived experience of tenants, and they are clearly placing more pressure on landlords who need to fully understand them and the implications.
‘The survey findings acknowledge the role a professional letting agent can have in relieving some of that pressure, and landlords can be confident that agents who display the ‘Propertymark Protected’ logo are up to date on the latest legal changes and offer higher levels of protection than are legally required, giving them the necessary tools to protect landlords, their properties and their tenants.’
And Chris Norris, of the National Residential Landlords Association, added: ‘The private rented sector has faced a blizzard of changes, including tax and other regulatory reforms. With further major reforms on the way, such as changes to energy efficiency rules and the ways properties can be repossessed, it is unsurprising that many landlords are struggling to deal with the influx of legislation.
‘More broadly, the Government needs to stop the constant stream of often piecemeal changes to the sector. What is needed is a period of stability to ensure that reforms currently being considered have enough time to take effect.’
Article written by Myra Butterworth for the mail online
Original article can be found here https://www.dailymail.co.uk/property/article-10547227/Buy-let-landlords-struggle-new-regulations.html