THERE’S never been a more complex time to be a landlord.
The impact of the Covid-19 crisis (and Brexit) means it’s now more important than ever to closely manage your portfolio, but if you can navigate your way through the various tax rules and compliance regulations, the rental market is still thriving.
To help landlords keep their finger on the property market pulse, our Residential Lettings Manager Matt Johnson has compiled an easy-read guide outlining the latest updates, some of which are now in force and some due over the coming weeks and months.
Important changes for landlords
Mandatory electrical compliance reports
Effective from: 1 April 2021
Every landlord MUST now have an Electrical Installation Condition Reports (EICRs) for every property in their portfolio.
Since July 2020, this has been a legal requirement for all new tenancies but it has now been extended to ALL tenancy agreements.
To improve tenant safety, the certificate proves that all fixed wirings and electrical installations have been tested by a qualified electrician.
If you haven’t got one, you’re breaking the law.
Client Money Protection
Effective from: 1 April 2021
An agent or landlord MUST have Client Money Protection in place to safeguard the rent, deposit or any other money they hold on behalf of a tenant. Should the worst happen, and the business experiences difficulties, the tenant’s finances can still be recovered, at least in part.
Although the compliance deadline was previously pushed back twice, it became law on 1 April 2021.
Debt Respite scheme for tenants
Effective from: 4 May 2021
Tenants who are experiencing financial difficulties and are in need of some breathing space are able to benefit from the ‘Debt Respite’ initiative by freezing ALL debts, including rent arrears, for up to 60 days.
Current rents must still be paid by the tenant during the 60-day period. If they fail to pay, landlords can approach the appointed debt advisor to end the respite period.
However, a Section 8 notice CANNOT be served on them and any possession claim linked to arrears cannot continue during the ‘respite’ period.
Right To Rent changes
Effective from: 30 June 2021
Under UK law, it is the landlord’s responsibility to check the immigration status of their tenant, irrespective of their ethnicity or nationality.
As part of the Brexit changes, a new points-based system is set to be introduced from 30 June 2021.
Until then, landlords must continue to use passports and national ID cards to ensure a tenant can legally rent in the UK.
Stamp Duty ‘holiday’ ends
Changes on: 30 June 2021
The ‘Stamp Duty’ tax has been suspended for the first £500,000 of all property sales since July 2020, as a response the Covid-19 crisis.
Landlords have been eligible for the tax cut, but have still had to pay the additional 3% of Stamp Duty charged under the previous rules.
This ‘holiday’ period will end on 30 June and after this date - until the end of September - there will be a staggered return to the amount buyers have to pay, initially dropping to £250,000 until 30th September 2021.
From 1 October 2021, stamp duty is due to return its ‘normal’ rate.
If you’re a landlord who’s in the middle of negotiating a new purchase, act fast and try to seal the deal ASAP.
No fault-evictions under Section 21
Effective from: To Be Confirmed
As part of the Renters’ Reform Bill issued by the Government, it looks as though the abolition of Section 21 may finally take place - meaning every eviction will effectively need to go through the courts.
At the moment, Section 21 allows landlords to evict a tenant without cause if they’re served with 3 months’ notice, either after a fixed-term tenancy ends or mid-tenancy if there’s no fixed end date. During the Coronavirus pandemic, the notice period was extended to 6 months.
Whilst there is no start date for this as of yet, it’s wise for landlords to monitor this and keep an eye out for any updates. We will, of course, inform our clients of the rule changes – and possible implications – when the law comes into effect.
Enlist our help & advice
Whilst some of these changes may seem small, ignoring them could cause you big problems.
At Garness Jones, we’re on hand to help professional and part-time landlords so they can feel confident that they’re 100% compliant at all times.
If you’d like to discuss any of the above issues, and the support we can provide, email email@example.com or call 01482 564564 for friendly and impartial advice.
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