The Renters Reform Bill
The Renters Reform Bill ,which is thought to come in at the end of 2023/2024 or with interim measures possibly 2025, proposes extending the Decent Homes Standard imposed in the social sector to private tenancies so that landlords will need to comply with the statutory minimum fitness standard.
It will ensure that all tenancies are Assured Shorthold Tenancies, allowing tenants to give two months’ notice and it will remove ‘no fault evictions’ (s21 notices). Landlords will only be able to increase rents once a year and it will establish a portal for landlord registration, a dispute resolution system via an ombudsman and landlords will be required to permit pets unless there is good reason to refuse.
The Minimum Energy Performance of Buildings (No 2) Bill
From 1 April 2023, the Minimum Energy Performance of Buildings (No 2) Bill will require commercial properties to have a minimum E rating EPC with proposals to increase this to C in 2027 and ‘B’ in 2030.
Since 1 April 2020, residential properties required an E EPC, but there are plans to require all new tenancies to have a rating of C by 2025, with existing tenancies following suit by 2028. There are government schemes available to assist landlords with improvements works but these are subject to conditions being met.
The mandatory and additional licensing schemes for HMOs (houses of multiple occupation) allow local authorities to regulate landlords and carry out enforcement, if necessary, with the ability to impose financial penalties of up to £30,000 and civil penalties like banning orders.
Licensing requirements vary and will need to be checked (including the planning possession) and there is talk of yet more regulation.
Rent rise and CGT
Forecasts vary on the level of rents given the current economic climate and energy crisis, but commentators suggest that rents are still on the rise.
This combined with a slowdown in the housing market could see investors acquire some bargains particularly in the right areas. Rising costs are impacting buy-to-let mortgages, although there are signs that they are starting to fall so obtaining advice is recommended.
Consideration should also be given to tax liabilities including the cut in capital gains tax (CGT) allowance.
Overseas entities and holiday lets
In addition, overseas entities investing in UK property needed to register with Companies House by 31 January 2023 or risk a fine (or committal) under the Economic Crime (Transparency and Enforcement) Act 2022. Overseas landlords will be liable for tax on UK rental income.
Whilst short-term/holiday lets remain popular, critics say they limit the availability of long-term housing and increase rents.
In addition to the restrictions on Airbnb use (in London 90 days), the government launched a review in the summer of 2022 into holiday rentals and the Levelling Up and Regeneration Bill, is considering a registration scheme being introduced.
The recommendations are expected towards the end of this year.
Social Housing
The tragic death of Awaab Ishak in Rochdale prompted the government to instigate a review of damp and mould with guidance being issued to social landlords under the Social Housing Regulation Bill.
This remains an issue for all landlords and gives rise to the question as to who is responsible. Landlords already need to comply with the Homes (Fitness for Human Habitation) Act 2018 and other various health and safety measures.
Landlords still need to comply with current regulations including serving the prescribed gas and electric safety certificates (including complying with fire regulations) and EPC, protecting deposits in a tenant’s deposit scheme, checking that tenants have the right to rent in the UK and providing the How to Rent booklet.
There are additional statutory provisions for Wales and Scotland.
