The Autumn 2021 Landlord Update
It’s been a rollercoaster 18 months for landlords, with soaring demand and, of course, the prospect of the new Rental Reform White Paper.
Here our Landlord Update sums up everything landlords need to do as we head into the Autumn, and the potential changes to be aware of!
If you need any support with the updates we cover here or help to identify suitable rental investments to bolster your portfolio, please give us a call for independent advice from the West Sussex property experts.
HMRC Revisions to Making Tax Digital
Welcome news doesn’t often come from the tax office, but HMRC has announced that landlords have an extra year to prepare for mandatory enrolment in Making Tax Digital (MTD). MTD means that landlords with a self-assessment income of over £10,000 will need to submit quarterly returns rather than once per year. Originally due to become compulsory in April 2023, HMRC has extended the deadline for an additional 12 months following consultations.
It’s advisable to use that time to prepare – perhaps think about investing in bookkeeping software with MTD compatibility to avoid the changes having a significant impact on your administrative time burden.
Give us a call to learn more about our West Sussex lettings service if you have any concerns about the changes coming in 2023.
Pets and the Model Tenancy Agreement
We reported back in February about the amendments to the Model Tenancy Agreement to make permission for pets a default. The MTA is recommended rather than required, but if you decide to use this standard contract, you’ll need to respond within 28 days, in writing, if you wish to reject a tenant request to keep an animal.
Last month, housing minister Eddie Hughes stated that the government would not amend The Tenant Fees Act 2019. That means landlords cannot charge additional deposit to cover expenses such as:
- Repairing damage caused by pets
- Higher levels of insurance
However, while landlords can’t charge separate costs for pet ownership, please note that you can still refuse pets with good reason and can, of course, pass on the cost of repair work to tenants.
It’s worth getting in touch for more advice if you’re considering allowing pets in an investment property, as this can be an excellent strategy to attract high-quality tenants!
Eviction Ban Updates
From 21st September, new guidance has been published outlining the possession process in England and Wales.
The now named Department for Levelling Up, Housing and the Communities urges landlords to engage with tenants or use a mediation service before resorting to court action.
As it stands:
- All notice periods for Section 8 or Section 21 possessions have returned to their pre-pandemic requirements (between two weeks and two months, depending on the reason and type of notice served).
- Notices served between 29th August 2020 and 31st May 2021 must give six months, unless in cases of severe arrears, fraud or anti-social behaviour.
- Any notice from 1st June until 30th September 2021 requires four months, with the same exemptions in urgent cases.
It remains likely that the government will scrap Section 21 evictions at some stage, although that will depend on the outcome of the tenancy law reforms, which are still ongoing.
Rental Property Safety Standards
Another area of change has been around safety compliance. To recap, from 1st April 2021, properties must have a valid electrical safety certificate produced by a qualified electrician.
You must provide the report to tenants within 28 days or before a new tenancy. Electrical safety checks need to be repeated every five years and checked visually periodically – remember that the Tod Anstee lettings team can assist with these ongoing requirements on your behalf!
Another potential area to think about is CO2 alarms, required in all rented properties since 2015. While there aren’t yet any new rules for English rentals, new regulations come into effect from 2022 in Scotland. Alarms in Scottish rentals will need to comply with increased product standards, including interlinked alarm requirements.
This amendment doesn’t apply to England, but there is a distinct possibility that the rules here will extend to oil and gas boilers. Therefore, if you’re thinking about switching fuel sources or upgrading heating systems, choosing a future-proof replacement is wise.
The Rental Reform White Paper
Many of the potential changes we’ve discussed here are all part of a broader reform package. However, this is still under consultation as of October 2021, so it won’t be coming into play in the immediate future.
But here’s what we expect the reforms to address:
- Changes to the acceptable grounds for possession, with defined reasons that a landlord can evict a tenant.
- Improved dispute resolution services to avoid possession cases escalating to the court system.
- A reform to court processes to help possession cases be heard more quickly.
- A new Unique Property Reference Number scheme to replace separate registers of landlords.
- New enforcement rules to enable the government to tackle unethical landlord practises and pass those powers to local councils.
- Lifetime deposits, whereby tenants can passport a deposit from one property to the next.
- Reinforcements to support landlord rights to claim against damage and new rules to govern how security deposits are calculated and managed.
Until the paper is published, we won’t know further detail, but we hope this overview gives you a flavour of what to expect.
We’ll wait to see how the government will implement these changes, but by and large, there shouldn’t be too much disruption for landlords with quality properties and great tenants. Once the white paper is made available, the Tod Anstee team will, as always, be on hand to answer any queries about the impact on your existing property portfolio or advisable measures to protect your rental assets in the future.
In the meantime, do let us know if you have any questions or need assistance vetting new tenants to ensure you’re in a great position to meet rental sector changes head-on.