Buy-to-let landlords warned of potential fines
Posted: 13 Jun 2006 09:48:57 GMT
While the buy-to-let industry may be thriving in the UK, landlords have been warned that carelessness could lead to fines of up to £20,000.
Landlords will be susceptible to these significant penalties if they do not manage to comply with new regulations by the deadline of July 6th, according to mortgage experts John Charcol.
The legislation has been designed to reduce the number of inadequate rental properties on the market and weed out unsuitable landlords, but all landlords will be affected unless they familiarise themselves with the rules.
The key change is perhaps that landlords will require a licence to hold certain Houses in Multiple Occupation (HMO). Because this licence is specific to not only the property but also the landlord, it is not transferable and new landlords will have to apply for a new one.
Furthermore, local authorities have the right to decide upon the fee for the new licence and this may well vary from as little as £100 to a slightly more daunting £1,100.
Experts from John Charcol have also pointed out that unless the funds are backed by an insurance scheme, landlords will no longer be able to hold their tenants' deposits.
While the new regulations will undoubtedly bring difficulties to inexperienced landlords, it seems likely that the buy-to-let sector will remain a popular investment option.