Khalil: Three complex challenges facing landlords in 2017 – and one simple solution

Despite the fact that the Chancellor only mentioned housing once in his recent Budget speech, anyone investing rental properties knows that it remains very much the elephant in the room.
The next tax year will be a crucial one for landlords, with many changes announced in the Housing White Paper starting to hit. Let’s take a look at three of these – and then reveal a simple solution to the complexities and risks that landlords face.

1. Taxation and Section 24
Section 24 of the Finance (No.2) Act 2015 starts in the 2017-18 tax year. It will gradually reduce landlords’ opportunities to offset their mortgage interest costs against their rental profits when calculating tax payable.
Simply put: landlords are to be taxed on their income, not their actual profit. Sole trader landlords will inevitably feel the full force of this, reliant as they are on mortgage finance for house purchases.

2. The Housing and Planning Act
This Bill introduces complex new regulations that will affect all landlords. This type of onerous legislation makes compliance a potential nightmare for landlords struggling to keep up with understanding, let alone meeting, the new demands.

Thankfully the Residential Landlords Association have created a fantastic overview of these changes that you can watch here: youtu.be/BBUmwiNBcSw

3. Implementation of the PRA
The Prudential Regulation Authority’s recommendations are now in full effect. They require that landlords seeking to borrow face stricter due diligence and a higher “stress test” for calculating how much they can borrow.
This means landlords will probably have to put up significantly larger deposits. I estimate that the average deposit for Brighton will need to be as high as 40%.

Is there such a thing as guaranteed rent in the year ahead?
As landlords’ lives get more complex by the minute it can seem easy to forget that when you started to invest in property you thought it would be a simple way to earn money.

With risks ever higher, legislation more complex and void periods eating into your profits, it can seem like the odds are stacked against you.

Many landlords want an easier way to manage their investments. And our Rent Guarantee Scheme offers just this. It takes away the hassles of finding and managing tenants, the trouble of dealing with day-to-day maintenance issues and the endless worries over legal changes.

Quite simply we lease your property for five years and guarantee you rent every month whether the property is occupied or not. We deal with compliance and with your tenants, returning your investment to you in exactly the same condition as we received it in.

This is rent without worry and letting without void periods.

It’s the solution to your year ahead.

For more information about rent without risk through our Rent Guarantee Scheme contact Ahmed Khalil on 07984015669 or 01273 573960, emailing ahmed@khalilproperties.co.uk or visiting us at Khalil Properties (124 Lewes Road, Brighton BN2 3LG) or finding us online at www.khalilproperties.co.uk.