Showing posts with label section 21. Show all posts
Showing posts with label section 21. Show all posts

Thursday, 6 January 2022

What’s in store for Chichester’s landlords in 2022?


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.


End to temporary Right to Rent checks - confirmed

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.


Carbon monoxide alarms - confirmed

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.


Leasehold reform - confirmed

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.



Landlords to join a redress scheme - highly likely

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’.


Abolition of Section 21 - highly likely

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.


Introduction of lifelong deposits - highly likely

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).


Interest rate increases - highly likely

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%. 


No more ‘no pets allowed’ - likely

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.


Minimum Energy Efficiency Standards - likely

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’).


Further impact from coronavirus & Brexit - who knows!!

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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Thursday, 7 January 2021

What’s in store for Chichester’s landlords in 2021?

Whilst attention was largely focused on tackling the coronavirus pandemic in 2020, new laws were still implemented that affected the lettings industry. Indeed, the pandemic seems to have provided the excuse to fast-forward into law a few matters that were previously only ‘on the horizon’ and, as such, 2021 looks set to be another busy year for landlords.

Letting agents must have Client Money Protection - confirmed
The deadline for this mandatory requirement has been pushed back twice in the past few years, but a firm date of 1st April 2021 now exists. From that date, all letting agents must have Client Money Protection, which covers the misappropriation of their landlords’ and tenants’ money. So, check your letting agent has it in place!



Electrical safety checks - confirmed

Since 1st July 2020, an Electrical Installation Condition Report (EICR) must have been carried out (and a copy provided to the tenants) when starting a new tenancy. From 1st April 2021, EICR’s will become mandatory for all tenancies.

 

Changes to stamp duty - confirmed
In July 2020 the stamp duty exemption rate was increased from £125,000 to £500,000. Although landlords are still subject to the 3% additional property surcharge, it has meant big savings have been on offer on property purchases (of upto £15,000). This is set to end on 31st March, although it’s quite possible that this period will be extended. What is confirmed though is that, from 1st April, all non-UK residents will be liable for an additional 2% stamp duty surcharge.

 

Changes to Section 21 - highly likely
Emergency legislation in light of Covid-19 currently means landlords must provide tenants with six months’ notice (compared to the normal two months). This is set to end on the 31st March, but it’s likely that political pressure will see this period extended. Worryingly for landlords, this ‘temporary’ measure could set the way for the full abandonment of the current ‘no fault’ Section 21 notice system. This has been lobbied for by pro-tenant groups and discussed for years, and would result in all evictions needing to go through the courts (which are already stretched beyond capacity…).


Increase in tax - highly likely

Nothing has been confirmed in this regard, but Rishi Sunak did say that tax increases in 2021 were “inescapable” after the vast sums of money spent dealing with the coronavirus pandemic. One likely candidate is Capital Gains Tax, whereby the rates are increased to match those of the income tax bands (for which many landlords are now in higher brackets, due to the full ramifications of the ‘Section 24’ mortgage interest relief changes being felt).


Changes to Right to Rent - likely

Since February 2016, landlords in England have had to check their prospective tenants’ immigration status to ensure they had the right to live in the UK. Brexit has brought in a new points-based system, but landlords have been told to continue with the existing checks until 30th June. Guidance for what to do after then is due to be released in the Spring.

 

No more ‘no pets allowed’ - likely

A bill has been put forward that would allow tenants to have a pet without requiring their landlord’s approval. Whilst I am typically pet-friendly as a letting agent / landlord, some people and types of property simply aren’t suited to having a certain type, or number, of pets. Many landlords also simply do not like being dictated to, as further control about their property gets taken away from them.




Further impact from coronavirus & Brexit - who knows!!

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.



This article was featured in...