Caerphilly Landlord Forum Douglas Haig – Vice Chair and Director for Wales RLA

The RLA Represents over 40,000 members across England and Wales, with an additional 17,000 guests Our members manage almost 500,000 properties across England and Wales The RLA provides support and advice to members, and seeks to raise standards We provide training for our members, including for Rent Smart Wales The Association campaigns to improve the PRS and make renting better

Mortgage Interest Relief

Loss of Relief KEY DATES: From 2017-18 landlords can still claim 75% of the finance costs at the higher rate, with the remaining 25% being deducted at the basic rate From 2018-19 this will fall to 50% From 2019-20, 25% will be deducted, with the other 75% receiving basic-rate tax reductions Not until the 2020-21 tax year that all financing costs can only attract the basic-rate tax reduction

Profitability Impact Assume rental income of £50,000; Allowable expenses of £15,000 Mortgage interest of £25,000 Rental accounts under the current method would show £50,000 t/o – £15,000 – £25,000 = £10,000 rental profit Rental accounts under the new method (once phase in completed), £50,000 t/o – £15,000 = £35,000 rental profit Of which there would be 20% relief against the £25,000 mortgage interest.

Land Transaction Tax Current Rates New Rates in Wales Up to £125,000 no tax Between £125k and £250k 2% Between £250k and £925k 5% Between £925k to £1.5m 10% Above £1.5m 12% Up to £150,000 no tax Between £150k and £250k 2.5% Between £250k and £400k 5% Between £400k and £750k 7.5% Between £750k to £1.5m 10% Above £1.5m 12%

The Biggest Losers People buying houses worth more than £750,000 as the tax rises to 10% Someone buying a £925,000 house in Wales would pay £53,750 (In England, would be £36,250) According to Welsh Government: 9/10 homebuyers in Wales – pay same or less tax than they do currently. Anyone buying a second home will pay an additional 3% on the value of the property - the same as currently. Biggest tax hikes < number of purchases that will see a cut. Transactions of £500,000 are expected to account for 3% of transactions in 2018/19.

What to do Also consider loss of wear and tear allowance No one-size-fits-all solution- See property tax expert MIR: higher-rate landlords with mortgages been affected, can also affect basic-rate payers. Inflated profits being reported by landlords can have far-reaching consequences. Have best mortgage deal for investment? Claiming all you can?

Tenancy Agreements

Tenancy Agreements Should include: Can also include: the names of all people involved the rental price and how it’s paid information on how and when the rent will be reviewed the deposit amount and how it will be protected when the deposit can be fully or partly withheld, eg to repair damage caused by tenants the property address the start and end date of the tenancy any tenant or landlord obligations which bills your tenants are responsible for whether the tenancy can be ended early and how this can be done who’s responsible for minor repairs (other than those that the landlord is legally responsible for) whether the property can be let to someone else (sublet) or have lodgers

Is it legal? Term must be fair and comply with the law Must not include anything that may indirectly discriminate against your tenant. A clause will be considered unfair if it takes away a legal right a tenant would otherwise have had. If a clause is prohibiting something, you need to include special wording. Where a clause is imposing any sort of penalty or charge on the tenant, it should provide for the charge to be (1) reasonable in amount and (2) reasonably incurred. Clauses which are considered ‘unfair’ will be void and unenforceable. If you attempt to increase rent via a rent review clause which is void, the extra rent will not be payable. If written unfairly in complex style with lots of legal jargon that an ordinary person cannot understand. Ideally, all contracts should be written in plain style English. Best to use a template from a reputable source (RLA), with option to phone for advice about needed changes.

Renting Homes (Wales) Act 2016 New “occupation contracts” Standard Contract- modelled on the current AST- month Moratorium Use of model contracts with prevention from retaliatory eviction New abandonment procedure

Landlord Checklist *- affects Section 21 rights Correct AST- signed EPC to tenant before occupation Gas Safety Deposit protected, prescribed information given to tenant.* Inventory HMO licence, if applicable Rent Smart Wales registered/licensed* Utilities- Water, etc *- affects Section 21 rights

Agency Fee Ban Wales Consultation closed 27th September Cap on fees, with set menu of fees Leave holding deposits alone Deposit Transfer Scheme Increase enforcement of Consumer Rights Act 2015

RLA WALES CONFERENCE 30th November, 2017 Cardiff, Jury’s Inn Email: info@rla.org.uk Website: www.rla.org.uk

Vice Chair and Director for Wales Thank You Douglas Haig Vice Chair and Director for Wales Tel: 02920 027 593 Email: dhaig@rla.org.uk Website: WWW.RLA.Wales Facebook: TheRLA Twitter: @RLAWales