Last year saw a host of changes within the lettings industry; some were pre-planned, whilst some were invented in light of the ongoing pandemic. With Covid seemingly not letting up, landlords will need to be on their toes to adapt to the ever-changing landscape, but here are some of the things they may expect to face in 2022.
Due to Covid, the process of undertaking Right to Rent checks was altered so that identification could be taken by e-mail or photograph, rather than having to be seen in person. These adjusted checks were extended to 5th April 2022, although there have been murmurs that this new method could be made permanent such has been its success.
Currently carbon monoxide alarms need only be installed in privately rented properties that contain a solid-fuel burning device, such as an open fireplace. It has recently been confirmed that a carbon monoxide alarm will be required in any room used as living accommodation where a ‘fixed combustion appliance’ (other than a gas cooker) exists e.g. a boiler. This will apply to all rental properties, although a date for its implementation is yet to be announced.
Another confirmed change without an implementation date; future leasehold properties will have their ground rent set at a peppercorn rate (which is effectively nil). This change won’t be retrospective, but it will include renewing the lease on an existing property. Leasehold houses also look set to be a thing of the past on new-build sites.
There have been persistent rumours of mandatory registration of private landlords being introduced. It is thought likely that all landlords will need to join a redress scheme as part of the forthcoming ‘Renters Reform Bill’.
The scrapping of so-called ‘no fault’ Section 21 notices has been a political hot potato for some time. It seems it will soon come to fruition
via the Renters Reform Bill, leading to a whole new type of tenancy being introduced and major reforms to the processes when evicting tenants.
The third prong of the Renters Reform Bill is thought to be the introduction of so-called lifelong deposits, making them transferable from one property to another. This will prevent the need for tenants to raise a new deposit each time they move, whilst their old deposit is held against their current home. The question is, how to bridge the gap if the current deposit is retained to cover rent arrears or damage at a tenant’s current property (which won’t be finalised until they likely already have the keys to their new home).
Last year saw the first rise in interest rates since November 2017. Unless the effects of the pandemic worsen it is deemed likely that rising inflation will force the policymakers’ hands in increasing rates further. The financial markets expect base rates to be 0.75% by the end of the year, compared to their current 0.25%.
Last year saw the government update their ‘model tenancy agreement’. In it they set the default position as tenants being allowed to keep pets, which in turn caused a lot of mis-information in the press and social media that landlords could no longer not accept pets in their properties. This is not true; there is no legislation that says pets must be accepted and the government’s own tenancy agreement does not need to be used (and very often is not). However, it has been muted that new laws to this effect could be introduced in due course.
Whilst changes are unlikely to take effect this year, the government is likely to at least publish their proposals. They have committed to raising the minimum energy efficiency rating in rented properties from its current E-rating to a C-rating by 2025 for new tenancies and by 2028 for all existing tenancies. This jump is not insignificant, with landlords set to face costs of up to £10,000 versus an estimated bill of £17,000 for the installation of external wall insulation and heat pumps; the likeliest ways to achieve the rating on older homes. In the meantime, the government has been leaning on banks to offer preferential mortgage rates to energy efficient homes (so called ‘green mortgages’).
Whilst no one knows what the future holds, we can at least prepare ourselves for what might happen. Those who are able to adapt to the frequently changing world of lettings should be well-placed to cater for the growing number of tenants, at a time when the number of landlords and available properties is decreasing.
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