In this special two-part series, we’ve been looking at the big issues likely to have an impact on the property owners sector this year. In our first instalment, we outlined the first five points on our top 10 list. If you haven’t read the first blog in this series, you can read it here.
Or, keep reading to find out the final five issues that we believe could become big news for property owners in 2020.
- Overseas buyers could face Stamp Duty surcharge
One change very much expected to be announced in the upcoming March Budget is a 3% Stamp Duty Land Tax (SDLT) surcharge on foreign buyers of residential properties, which would work similarly to the existing surcharge imposed on domestic buyers of second properties. The proposed (although yet to be confirmed) move has been welcomed by 70% of British property investors, according to research from FJP Investment.
- Rogue landlord database to be opened to tenants
The rogue landlord database was introduced in the Housing and Planning Act 2016 and went live in April 2018 in order to crack down on the estimated 10,500 rogue landlords thought to be operating in the UK. Currently only available to local councils, the government plans to open it to tenants and the general public following pressure from industry body ARLA Propertymark.
- A step further down the path of leasehold reforms?
In January this year, the Law Commission published proposals for reforms to the leasehold system, which has been subject to increasing controversy in recent years. Millions of homeowners face prohibitive costs to extend their lease or purchase the freehold of their property, while ground rents and service charges can be increased at any time. The report comes as part of a wider exploration of issues surrounding leasehold properties, with campaigners saying the system is unfair and no longer fit for purpose.
- Competitive buy to let mortgage rates
Finally some good news for landlords! The BTL mortgage sector is in for a competitive 2020, with recent research showing that lenders had cut rates on both short-term and long-term deals by approximately 0.3% year-on-year. Landlords should look at switching in 2020 while the low-rate mortgage environment prevails – especially with the prospect of higher costs on the horizon.
- House prices to grow only modestly
Despite much talk about confidence returning to the property market in the wake of the Conservatives’ landslide win in December, property experts believe that house price growth will be slight this year as uncertainty remains as to what exactly the UK’s deal with the European Union will look like. While Savills has predicted a 1% increase, Rightmove’s outlook is slightly more optimistic at 2% house price growth in 2020. The longer term forecast looks more positive, however, with a predicted 15.3% growth over the next five years.
So, as you can see it’s looking to be a busy – and potentially costly – year for landlords and other property owners, but there are flashes of optimism. House price growth and competitive mortgage rates have the potential to offset – even if only in part – the rise in costs to which some owners will be subject due to legislative changes going ahead in 2020.
If you would like to discuss any of the above points or would like more information about our growing appetite in the property owners sector, just call our team on 0345 345 0777 or email firstname.lastname@example.org.