Is Buy To Let Worth The Effort In 2021?

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Is Buy To Let still worth the effort in 2021? Property investors have faced many challenges in 2020 which have left some investors questioning whether residential buy to let is still worth the effort.

Well, it’s a question that doesn’t have a one size fits all answer.

The post Is Buy To Let Worth The Effort In 2021? appeared first on Property118.

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2020: You just could not make it up!

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Everything changed on the 16th March 2020, a date that will be forever famous for all the wrong reasons, when our first lockdown came in.  The country was in shock, but the property market showed how resilient it was.

One positive was that the property market was able to reopen earlier than some other industries on 13th May. But landlords had to adapt quickly and learn to communicate with their tenants more than ever before. 

During lockdown, I was inundated with calls from both landlords and tenants looking for advice on non- payment of rent.  As tough as it was, I heard some incredible stories of landlords going above and beyond to help their tenants who had been affected by COVID and subsequently lost jobs or been furloughed. 

I saw some great examples of both parties working together but, of course, there were also some tenants taking advantage of the situation.

The Government announced that lenders should be given three-month mortgage holidays, which in fact were deferrals and they encouraged landlords to pass that onto their tenants.

Evictions ban

Then of course there was the evictions ban. Courts were put on hold and notice periods extended to six months to prevent the mass threat of homelessness.

Unfortunately, this has had devastating consequences for landlords, particularly those who had cases pre-COVID, as many of these landlords have still not managed to evict their tenants.  Of course, it was, and still is, important to help tenants who have lost their job, but so many landlords are struggling too. 

We have numerous landlords at Landlord Action who now who have more than one year’s rent arrears, and very little chance of recovering it. The courts are due to re-open in the middle of January but now with the introduction of Tier 4, who knows when this could be extended to.


Universal Credit has hit over 2.5 million claimants, meaning more landlords have tenants in receipt of housing benefit.  Frustratingly, tenants are still being forced to wait five weeks for their first payment and are unable to set up direct payments to landlords.  This totally baffles me as it puts all parties under financial strain from the outset. 

In Wales, tenants can apply for the Welsh Government Tenancy Saver Loan Scheme, which enables tenants to apply for loans. These are paid directly to landlords and agents, which can be repaid for a period of up to five years. This is a great way to sustain tenancies and avoid evictions but has not been introduced in England!

We were always going to see the commercial property sector hit worse than the residential market.  Working from home means thousands of offices are vacant and many are now considering whether they need that space in the future or whether their companies have adapted to a new remote way of working. 

That is why, as of 8 October, British Land collected 69% of rents it was owed for the third quarter, and even less in the previous quarter. 

As we move into 2021, this could present opportunities for landlords and developers buying commercial properties, looking for change of use to residential housing in 2021 under permitted development reforms. The high street in many areas will look different in the future.

I also believe a lot more landlords will consider the Social Housing market, tying up longer-term schemes with providers.  Councils will now have many landlords approaching them to do deals on three or five year lets so that they have the security of a council being their tenant, rather than an individual.

Goodbye Section 21

Section 21 is definitely going and I believe it will be abolished in the next twelve months, COVID and the ongoing crisis will accelerate this, especially now that a section 21 notice period is six months which dilutes its powers. 

Read this report Landlord Action has participated in called – BEYOND SECTION 21.  I believe there could be as many as 150,000 claims issued in the courts in 2021.

When Rishi Sunak made the announcement of the Stamp Duty Concession until the 31st March 2021, which we know now will not be extended, we saw a frenzy of activity, in October alone we saw 97,500 house purchase loans approved. While there are over 140,000 more people in the process of buying a new home now than this time last year

But The Guild of Property Professionals carried out a survey to 1,000 buyers last week and 31% said they would ditch their potential purchase if completion takes them beyond 31 March, when the holiday is due to end, so we could be in for a tsunami of fall-throughs.

Upon speaking to our mortgage broker at Total Landlord Mortgages, Daniel Lee (pictured), mortgage applications are taking longer then ever before, conveyancers working remotely are much slower and lenders are changing lending criteria daily.

Other considerations for landlords next year will be Brexit and how this impacts landlords’ requirement to check their tenants “right to rent” and immigration status. Currently, EU citizens are considered in the same way as UK citizens but this could change after Brexit.

Finally, landlords await Chancellor Rishi Sunak’s Spring Budget which it is thought could bring a potential hike to capital gains tax. If this goes ahead, we could see a flurry of landlords trying to sell up before it comes in, which could drive prices down.

But, of course, landlords who were thinking of selling, but cannot sell in time, will hold on to their properties. There has never been a more important time for landlords to seek specialist tax advice and get their tax planning in place.

There will be opportunities for landlords next year without a doubt but now landlords must focus on being compliant and taking good care of their properties and their tenants.

From all of us at Landlord Zone, we wish you a merry Christmas and a Happy new year and see you in 2021

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – 2020: You just could not make it up! | LandlordZONE.

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Propertymark calls for a moratorium on landlord tax increases

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Top of the wish list is a call out to government to pay the rents of those affected by COVID. Landlords (and tenants) have been on a real rollercoaster ride during the pandemic this year; they even had to shut down entirely during the first lockdown and they are still suffering with many in financial hardship.

The year has been particularly tough on landlords in the private rented sector (PRS). They were already facing increasing costs as a result of various pieces of legislation brought in over recent years resulting in more paperwork, higher taxes, and overall an increase in running costs.

Although there were measures to protect landlords by way of a mortgage holiday for those with cash flow problems, there was also a ban on evictions which has hit some landlords hard, especially those with possession claims in the pipeline when the ban was announced. Some unlucky landlords are facing the prospect of a full 12 months without getting a penny in rent.

Thankfully estate and lettings agents and removal firms are allowed to continue working during the tier 4 restrictions in England and that goes for landlords as well. Following the latest UK Government announcement, those people living in a tier 4 area must not leave or be outside of their home except for where they have a specific purpose or a ‘reasonable excuse’. Moving home and associated activities within the housing sector are deemed a ‘reasonable excuse’, therefore, agents and landlords can continue to work.

Property viewings are still allowed to take place as long the COVID-19 safety guidance is followed, which includes social distancing and wearing face masks or coverings. People are still allowed to move home, but according to the guidance anyone outside an individual family bubble should not help with moving unless it’s absolutely necessary.

ARLA Properetymark’s Mark Hayward told The Guardian: that he would like to see improvements made for the sector and he mentioned his main wishes:

“It’s been an unprecedented year for not just the buy-to-let sector, but the housing sector as a whole and we’re now sat in a very different place to this time last year.

“The Government has acknowledged the important role the buy-to-let sector plays in driving forward the economy, so we’re hopeful that our wish list for the sector will come to fruition.”

The list includes calls for the Government to pay the rents for those tenants affected by coronavirus and for this payment to be made direct to landlords.

Secondly, Propertymark is calling on the government to stop increasing the tax level for landlords. There have been strong rumours of swinging increases in Capital Gains Tax, a measure if it comes to fruition, would drive out a lot of buy to let landlords.

It’s not just the tax on the gain that worries landlords, if the speculation came about the gain could be added to income from other sources such as employment and would result in pushing many more into the higher rate tax band.

Mr Hayward said:

“It is vital the negative impacts of further taxes on an already penalised sector are considered and the Government must introduce initiatives to help tenants keep the rent flowing and the courts handle eviction cases.

“Additionally, new buy-to-let landlords should be encouraged through build-to-rent schemes. All of this will help boost the sector, encourage new landlords and help the private rented sector thrive in 2021.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Propertymark calls for a moratorium on landlord tax increases | LandlordZONE.

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What’s good and which ones to avoid?

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Rather than trawling through Google play store and reading countless reviews on apps that assist with midterm inspections, I thought it would be more beneficial to learn about them first hand from other landlords and property managers who may have experiences with them.

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‘I’ve had to learn the hard way and won’t ever take housing benefit tenants again’

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An ‘accidental landlord’ who spent years coping with terrible tenants that turned his property into a scrap metal yard is quietly celebrating their imminent eviction.

The landlord – who doesn’t want to be named for fear of retaliation – inherited a three-bedroom house in Slough from his father-in-law six years ago (pictured).

But he’s now thousands of pounds out of pocket and has vowed never to take DSS tenants again after the traveler family of six piled up at least 20 cars in the garden, where they also housed people in a caravan and refused to pay rent for years.

“They are very abusive – I was scared to speak to them and terrified about serving the eviction notice,” he tells LandlordZONE.

His tenants were supposed to pay one-third of the £1,300 rent while Housing Benefit covered the rest.

But, despite alerting Slough Borough Council to the problem years ago, it has felt like fighting a losing battle, he explains.

“The council said this family had a license for their business issued from another council, which surprised me, so I even wrote to my MP.

Section 21

He finally served a section 21 in January before the pandemic struck, only to receive a letter from Slough Council housing team saying they were going to prosecute him.

“They said I’d done the section 21 wrong, but then their enforcement team said I was doing the right thing – I was basically getting conflicting advice from different departments.”

After forking out for a solicitor and finally getting the council to understand the situation, he feels frustrated that the possession process has taken so long.

But with the help of Landlord Action, he’s finally about to serve the bailiff application and, after losing his job earlier in the pandemic, plans to move into the house with his family and rent out his one-bed flat.

Any new tenants will be carefully vetted, he adds: “I’ve always tried to do the right thing, but this experience has been so stressful that it’s taken its toll on my health. I’ve had to learn about being a landlord the hard way and won’t ever take housing benefit tenants again.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘I’ve had to learn the hard way and won’t ever take housing benefit tenants again’ | LandlordZONE.

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Landlord tax evasion rises steeply despite HMRC’s Let Property Campaign

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A leading accountancy firm has claimed that landlord tax evasion on rental income has nearly doubled over the past 12 months to an average of £4,480.

The claim is made by London-based national firm UHY Hacker Young, which specialises in several business sectors including property.

The increase in tax evasion by landlords is surprising. HMRC has been leaning heavily on landlords to come clean about previous tax evasion activity recently via its ongoing Let Property Campaign.

It’s been running since 2013 and enables buy-to-let landlords and the owners of holiday homes to voluntarily disclose unpaid tax while simultaneously threatening them with huge fines if they don’t.

The campaign recently revealed said it believes that 1.5 million of the UK’s 2.5 million landlords are underpaying their tax or not paying it at all.

It has also been mailing out thousands of letters to landlords its algorithm believes may be hiding rental income from the tax authorities. It uses data gleaned from lettings agents, holiday lettings websites, bank accounts and tax returns.

Airbnb, for example, has provided HMRC with details of its 225,000 UK hosts.

landlord tax

Clive Gawthorpe (pictured), Partner at UHY Hacker Young, says: “When landlords who are hiding income get a warning letter from HMRC, they realise that HMRC is closing in on them and [that] they can no longer hide.

“If a landlord decides to come forward under the campaign, it’s better to do it with professional advice, particularly if their tax affairs are complex. This will be key in helping avoid any mistakes and the possibility of further investigations by HMRC.”

Get more information about tax compliance.
Read more about HMRC’s landlord taxing activities.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord tax evasion rises steeply despite HMRC’s Let Property Campaign | LandlordZONE.

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Housing market still open even in Tier 4

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The housing market in England will remain open in all 4 tiers. This means that people looking to move home will be able to both continue with planned moves and view new properties to move into in the future. Estate and lettings agents

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Mickey and Minnie have moved in?

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A tenant has contacted me to say she can hear mice under the floorboards upstairs. She knows for sure that they have them next door, as she knows one of the occupants, and she said they were rife, but although she has reported them to her LL nothing has been done.

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BREAKING: 840,000 tenants now in rent arrears

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Young and self-employed renters are most likely to have built up rent arrears during the pandemic, according to a new tenant survey by the National Residential Landlords Association (NRLA).

It found that at least 800,000 private renters in England and Wales have got behind with their rent payments and has repeated calls for the government to step in and offer them interest-free hardship loans and a benefits boost.

The NRLA survey of 2,077 private renters reveals that 7% now have Covid-related arrears which, applied across the sector, would amount to 840,000 tenants.

Younger people are most likely to have been affected, with 14% of renters aged 18 to 24 and 10% of those aged 25 to 34 having built up arrears since March.

Rent debts

Self-employed renters were also most likely to be in arrears, with 17% saying they had developed rent debts, while those working in construction, IT and hospitality were worst affected.

Regionally, 11% of renters in the West Midlands have built up arrears since March, the largest proportion of any region in England and Wales, followed by London where 9% of tenants are behind on their rent. While the average rent debt is between £251 and £500, the survey finds that of those in arrears, 18% now owe more than £1,000.

It also found that although 4% of tenants had been handed a legal notice, these were not all necessarily due to rent arrears.


NRLA chief executive Ben Beadle (pictured) says simply banning repossessions does nothing to keep tenants in their homes long term. He adds: “It will achieve the complete opposite, as in kicking the can down the road it just means larger debts piling up, creating a bigger problem for tenants and also for landlords.

“To sustain tenancies the government needs to provide an urgent financial package to get rent debts built due to the pandemic paid off.”

Read more: How to deal with rent arrears.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: 840,000 tenants now in rent arrears | LandlordZONE.

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