It’s been a tough year for the housing market in general and it’s no different for the private rented sector. In 2018, landlords and agents witnessed significant decisions made by the Government, giving more power to local authorities to improve the private housing sector and more legislation and responsibility thrown towards landlords and agents.
Minimum energy efficiency standards
In April 2018, a minimum energy rating came into force where the minimum rating a private rented property could have on the EPC is ‘E’. If the property falls below this then landlords are not allowed to rent their properties and would have to make improvements to the property to raise the standard and then re-let it out.
Mortgage interest relief deductions
The amount of mortgage interest relief that landlords could claim was dropped to 50%, down from 75% in 2017. By 2020, landlords with buy-to-let mortgages will not be able to claim any mortgage interest relief from their rental income.
Rogue Landlord Database
All London councils have agreed to participate in a Rogue Landlord and Agent Checker which the Mayor of London is closely working with. It currently contains information about private landlords and letting agents who have been prosecuted or fined by the London Boroughs of Barking and Dagenham, Bexley, Brent, Camden, Croydon, Greenwich, Haringey, Havering, Hounslow, Islington, Kingston, Lambeth, Lewisham, Newham, Redbridge, Richmond, Southwark, Sutton, Tower Hamlets, Wandsworth, Waltham Forest and Westminster.
New ‘How to Rent’ guide
In June 2018, a new version of the ‘How to Rent’ guide was launched for the private rented sector in England. The How to Rent guide is designed to help tenants understand the process of renting a property in the private rented sector. It outlines what they need to expect in terms of costs and what they should expect from their landlords in terms of paperwork.
The guide was called How to Rent – a guide for current and prospective tenants.
However, in July 2018, an updated ‘How to Rent’ guide was launched which is the current one to be given to tenants. This guide is called How to rent – the checklist for renting in England.
HMO Licence amendments
In October 2018, rented properties that house five or more occupants, from at least two unrelated households irrespective of the number of storeys that the property has, it must have an HMO licence. The three storey criteria has been withdrawn.
Further changes mean that rooms used for sleeping in large HMOs will have to adhere to minimum room size requirements, using either the Government’s standards below:
Children aged 10 and under – 4.64 square meters
1 Person aged 10 or over – 6.51 square meters
2 People aged 10 or over – 10.22 square meters
Whilst it’s expected that most Councils will use the above figures, it’s important to note that Council’s can set their own minimum room size requirements, so please check with your local council what these are.
Along with the above HMO licensing changes, further rules relating to storage facilities and waste will apply from 1 October 2018.
Changes to Section 21
In October 2018, under the Deregulations Act 2015 all remaining Assured Shorthold Tenancies (ASTs) were brought in line with the rules for issuing tenants with a Section 21 notice. This meant that all landlords and agents in England must now use Form 6A. Landlords cannot serve a Section 21 notice unless they have provided the tenants with the following:
- Most recent How to Rent guide
- Where applicable, an EPC
- Where applicable, a Gas Safety Certificate
- Prescribed Information
- Where applicable, a copy of the licence from the local authority
What to expect in 2019…
Mortgage interest relief deductions
The amount of mortgage interest relief that landlords will be able to claim will be dropped even further to 25% down from 50% in 2018. By 2020, landlords with buy-to-let mortgages will not be able to claim any mortgage interest relief from their rental income.
Tenant Fees Bill
The Tenant Fees Bill is currently going through legislative stages in the House of Lords and is anticipated to be coming into force in April 2019. Some things to expect from this for landlords are:
- You will not be able to ask for a deposit that exceeds the equivalent of six weeks rent
- Holding deposits will be capped to 1 week
- No more than £50 to be charged in the case of a change in tenancy, unless the landlord can demonstrate greater costs were incurred.
- Landlords will not be able to serve a Section 21 notice until they have repaid any unlawfully taken fees.
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