A legal expert has urged landlords to consider rent rises before the Renters’ Rights Act brings in tighter rules next May.

Caroline Foulger, partner at Hunters Law, says they should decide what rent reviews are possible and take into account expenses coming down the line given that rental increases will be harder under the new legislation.

With a further 2% rise in property income tax looming in April 2027, landlords face a potential tipping point that should encourage a fundamental rethink of long-term planning, says Foulger, writing in IFA Magazine.

Any new tenancies should be agreed with the rule changes and income tax rate changes in mind as well as potential increases to mortgage interest if landlords are set to come off a fixed rate soon.

Looked

She adds: “Most will have looked at incorporation before but may now want to look at it again in light of the income tax rate change and MTD. If there is the option to go into partnership first to benefit from CGT reliefs, then the review should be sooner rather than later, if to be in place by April 2027.”

Landlords should consider how to invest in their properties to command the best rents, best tenants and be ready for the requirement of achieving an EPC rating of C by 2030, says Foulger, as well as preparing for Making Tax Digital by sourcing software and organising tracking of expenses to keep admin costs down.

Review

She also advises a general review of estate planning in light of reduced overall net income and deciding whether the level of capital investment in a property is warranted given the net income yield.

“The landscape for residential landlords is shifting and weathering these changes and securing long-term returns will depend on ensuring matters are reviewed fully and holistically in the near future,” adds Foulger.

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