The top 5 facts for Landlords in 2021!
We can all agree it has been a tough year for Landlords. The pandemic brought with it a wave of financial problems, and government restrictions, putting rental property owners on the back foot, albeit (hopefully) temporarily. But as lockdown measures continue to ease and the success of the covid-19 vaccine programme continues to make its way to younger members of the population, property owners can put the heads above the parapet, but they should be armed with the information that will see them through the post-pandemic rental market – so here are our top 5 facts Landlords need to be aware of in 2021…
#1 – Safety requirement changes
In response to the Grenfell Tower fire in 2017, and in a bid to improve tenant safety, the government requires landlords to demonstrate that any electrical installations, such as wiring and electrical sockets are tested by a qualified electrician. Currently, Landlords need to have an Electrical Installation Condition Report for every property they own for new tenancies, but as of this month (April 2021), these reports will be required for existing tenancies also. Further inspections will then need to be carried out at least once every five years and tenants given a copy of the report within 28 days of it being issued.
#2 – No pets clause set to be made illegal
A new government bill may ensure it is no longer possible for Landlords to include a “no pets clause” in their rental agreements! The Dogs and Domestic Animals Bill saw its second reading in parliament on the 5th February 2021, and while it is not yet clear when or if the bill may come into force, it continues its way through the Parliamentary process and is definitely one to watch – The end result is likely to be the right for renters/tenants to keep dogs and other animals in rented accommodation as long as they are seen as a responsible owner.
#3 – Managing clients money in a suitable manner
Under new legislation, any property agents (such as ourselves) in England who are responsible for handling clients’ money, whether the source of that money has come from the tenant or the landlord, must belong to a “client money protection scheme” and ensure that a certificate detailing this is displayed clearly in their offices. While this is an issue for property and letting agents to comply with rather than landlords, it is important that the property owner is aware of this legislation and ensures it is being complied with. It is just a matter of ensuring that as a landlord you have asked the question of your letting agent, to ensure both their own money and their tenants’ money is protected.
#4 – Renters’ Reform Bill
The introduction of the “Renters’ Reform Bill” has been pushed back due to the pandemic, but it will continue its progress into law as the urgency of responding to the pandemic has passed. When it does resume its progress through Parliament later in the year it will have a wide-ranging impact on landlords! The bill (which applies to England alone and none of the devolved parliaments) is likely to include steps to ending landlords’ ability to evict tenants without a good reason (by scrapping the use of section 21 evictions), giving landlords more rights to remove tenants if they have a valid reason and introducing a lifetime deposit scheme. This will give tenants the ability to roll their security deposit over from one property to the next.
#5 – Taxation changes
The last tax year (20/21) saw some big tax changes! Landlords.
Mortgage interest tax relief has been completely removed and replaced with a 20% tax credit for mortgage interest, which is less generous than the previous system for higher rate taxpayers. This impact of this amendment will only be felt from April 2021, as most landlords pay income tax through their self-assessment, which is only completed once at the end of the relevant tax year (5th April 2021). There is also a change in how Landlords with VAT-registered businesses (those that generate a turnover of more than £85,000) report their income to HM Revenue & Customs (HMRC). From April 2022 all businesses will need to follow the Making Tax Digital initiative. The rules will require landlords to send HMRC quarterly updates on their income and expenses through their digital accounts, rather than completing an annual tax return. Landlords who have not registered their properties as a business but earn an income of more than £10,000 a year from rent will have to comply with the rules from 6 April 2023.
If you are a landlord trying to juggle your property responsibilities, keeping up to date with these latest changes just be a little too much to add to your “to do list”, but we are happy to take these jobs off your hands leaving you with more time to take care of your other tasks – Contact us on email@example.com or 01749 672 678 , we are always happy to chat about all things property related.All resources & news