2020 was a year like no other for landlords, with Covid-19 causing all sorts of disruptions in the private rental sector. Mind you, it also brought some opportunities. The demand for rental properties soared after the first lockdown and carried on doing so throughout Lockdown 2.0 meaning landlords looking to expand their portfolio have been able to take advantage of the stamp duty holiday and record low interest rates.
For the majority of the year, there was effectively a ban on tenant evictions because of Covid. That’s despite the plans to scrap Section 21 which itself would have made eviction harder. This has been put on hold for an indefinite period. Meanwhile, other new legislation made the rental market more regulated than ever and the need for compliance much greater.
So despite the challenges posed by the pandemic, it’s still been a good year to be a landlord. Many tenants still paid their rent on time and recent research found that most renters like renting their home and get on with their landlord.
However, potential challenges lay ahead. While it’s impossible to predict anything concrete at the moment, there are a few things we can reasonably expect to affect the rental sector over the coming year.
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Here is a quick rundown of what landlords need to look out for in 2021.
A section 21 notice is the first step your landlord must take to make you leave your home. You don’t have to leave your home straight away. As mentioned above, the government’s plans to scrap Section 21 have been delayed because of coronavirus. THey originally wanted to scrap Section 21 from the Housing Act 1988 as quickly as possible but as Covid-19 still having a major impact, it is still to pass through Parliament and isn’t likely to happen before the middle of this year. It’s still coming, it’s just a matter of when.
Even without scrapping Section 21, landlords and agents have faced many challenges when it comes to evictions. During Lockdown 2.0, the Government effectively banned evictions from happening by instructing bailiffs not to enforce any repossessions during this time.
Legislation is in place to ensure bailiffs do not serve eviction notices, except in the most serious circumstances such as illegal occupation, false statement, anti-social behaviour, perpetrators of domestic abuse in the social sector, where a property is unoccupied following death of a tenant and serious rent arrears of 6 months’ rent or more. This legislation will be in place for at least until the end of 31 March and will be kept under review. Given that 14 days’ notice is required before an eviction can take place, no evictions are expected before 14 April except in the most serious circumstances.
Landlords should keep an eye on any potential changes to the ‘Right to Rent’ scheme post-Brexit.
Brexit is likely to have an impact on the number of EU citizens making their home in the UK. Government guidance states that private landlords will need to carry out Right to Rent checks in the same way they do at present, until June 2021. This includes performing checks on prospective tenants from the EU, EEA and Switzerland. They can still provide their national ID card or passport as proof of their right to rent after the Brexit transition period comes to an end later this month.
In June 2021 , new guidance will be published explaining how landlords can perform the correct to rent checks for EEA nationals. It comes as the Government launched a new online Right to Rent system last year which allows landlords to check the Right to Rent status of prospective tenants who:
Prospective tenants can provide a ‘share code’ and their date of birth to allow the landlord access to the online portal, making it easier for landlords to check entrants into the UK.
Issues around the current rules when renting with pets have often caused issues for agents. Currently, only 7% of private landlords currently advertise pet friendly properties. However, in January, the UK Government updated the new standard tenancy agreement to make it easier for tenants with pets to find rented accommodation in England.
This means that if letting agents use the UK Government’s new Model Tenancy Agreement, landlords will now have to give consent for pets as the default position and will have to object in writing within 28 days of a written pet request from a tenant and provide a good reason.
The upshot of this is that responsible tenants in England with well-behaved pets will be able to secure leases more easily through a new standard tenancy agreement.
Electrical Safety Certificates
By 1st April 2021, all landlords must have an EICR performed on all properties with existing tenancies. The new rules will apply to all existing lets. Even if your tenancy is already underway and you have no plans to renew. If you do not comply you could face fines.
Landlords also have to provide a copy of the electrical safety report to their tenants and to their local authority if requested. This means that all landlords now have to do what good landlords already do: make sure the electrical installations in their rented properties are safe.
Landlords with a turnover of more than £85,000 need to start using Making Tax Digital. HMRC’s online service that calculates your tax every quarter so you do not need to fill out a tax return. There is no clear deadline for this yet, but it is set to be sometime in 2021.
Most rental properties in London need a property license. If you don’t have one, the penalty is repayment of rent, which offers tenants an incentive to report landlords who aren’t complying.
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