In our blog, we have previously discussed whether the new carbon monoxide (CO) alarm regulations will have an impact on the buy to rent sector. With these proposed changes expected to take effect from 1st October, now is the time to ensure that you will comply with the law.
What do the new CO rules require from landlords?
Landlords and letting agents should already be aware of the obligations placed on them regarding carbon monoxide alarms and smoke detectors.
But from the beginning of October, the Smoke and Carbon Monoxide Alarm (Amendment) regulations will create new obligations that must be complied with:
• Landlords will be responsible for repairing and replacing alarms throughout the tenancy, not just at the start. They can no longer rely on the tenant to repair or replace the smoke alarm or CO detector, and they need to ensure that they act once they have been informed of a fault by the tenant.
• Any room in the property with a fixed combustion appliance, including gas fires, boilers and wood burners (excluding gas cookers), must have a carbon monoxide alarm.
• Landlords must check alarms are in working order on the first day of a tenancy.
• Carbon monoxide alarms will also be mandatory upon installation of any heating appliance (excluding gas cookers).
• The social housing sector will now also be required to fit homes with fire alarms and carbon monoxide sensors.
To ensure compliance with the new regulations, landlords and letting agents will need to have all required alarms and detectors fitted by 1st October when the new regulations come into effect. It will not be enough to have them ready to install.
Now is the time to prepare for the changes
Now is the time to begin the process of making sure each of your properties will be compliant by the deadline. This means not only checking that smoke alarms and carbon monoxide detectors are working and installed as required but that you also have the right processes in place to ensure ongoing compliance.
Equally importantly, you also need the ability to demonstrate that you are fulfilling your duties.
For those responsible for block or estate management, the task of ensuring and maintaining compliance can be time consuming and complex. We have many clients who rely on our Estate and Block Property Management Services to ensure that they are meeting the range of responsibilities placed on them.
We can conduct weekly, monthly and six-monthly property visits, and our inspections include checks on a range of assets, including:
• Fire detection and fire alarm system
• Fire doors
• Emergency lighting
• Fire extinguisher
• Automatic doors
For anyone managing individual properties, our check-in services and mid tenancy services can support you and ensure changes in legislation never catch you out.
If you need support to get ready for The Smoke and Carbon Monoxide Alarm (Amendment) regulations 2022, please contact us to discuss how we can help you.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, supporting compliance, streamlining costs and reducing your workload, then contact No Letting Go today.
The foundation of a good relationship between a tenant, landlord and letting agent is when parties understand their rights and responsibilities to each other, establishing a collective responsibility to ensure the tenancy goes smoothly.
If you’re new to renting or haven’t reminded yourself of your rights and responsibilities as a tenant, look at our guide below to know where you stand.
Your rights as a tenant
As a tenant, you have the rights provided for in Government legislation and may also have additional rights defined in your tenancy agreement with the landlord. The rights set by the government are the minimum:
· To live in a property that’s safe and in a good state of repair
· Your deposit is returned when the tenancy ends, providing no damage has occurred to the property – and your deposit is protected if you rent your home on an assured shorthold tenancy that started after 6 April 2007
· The right to challenge any charges you believe to be excessively high
· To know who your landlord is
· To live undisturbed in the property
· The right to see an Energy Performance Certificate for the property
· Protection from unfair eviction and unfair rent
· To have a written agreement if you have a fixed-term tenancy of more than three years
In addition to these rights, if you live in England, when you begin a new assured or short tenancy your landlord is obliged to give you a copy of the How to Rent guide, offering advice on the rights and responsibilities of both tenants and landlords and the rental process in England and Wales.
Your responsibilities as a tenant
In addition to your rights, you also have responsibilities as a tenant, which you must be aware of to ensure you aren’t risking your tenancy. These responsibilities are:
• To take good care of the property, for example, turn off the water at the mains if you’re away in cold weather.
• Pay the agreed rent, even if repairs are needed or you’re in dispute with your landlord.
• Pay other charges as agreed with the landlord, for example, Council Tax or utility bills.
• Repair or pay for any damage caused by you, your family or friends
• Only sublet a property if the tenancy agreement or your landlord allows it.
• Allow the landlord access to the property to carry out repairs if they have given you at least 24 hours’ notice, and they request access at a reasonable time of day unless it’s an emergency and they need immediate access.
If you don’t meet your responsibilities, your landlord has the right to begin legal action to evict you.
Building a positive tenancy
The rental sector is a dynamic one that’s subject to regular changes in the law, such as those proposed by the Renters Reform Bill or the proposed EPC regulations, so there’s a lot for landlords, letting agents and tenants keep aware of.
Good communications and putting processes in place, such as mid-term property reports, ensure that the property is well maintained and all stakeholders know their expectations and can work together to create a positive tenancy relationship – which saves time and money for all concerned.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, contributing towards a smooth relationship with tenants, streamlining costs and reducing your workload, then contact No Letting Go today.
Landlords are raising rents in response to tax changes
It’s been two years since changes to buy-to-let mortgages also changed the way that landlords are taxed. As some had predicted, many landlords have been forced to reconsider their position and think about what the future now holds for them.
How has buy-to-let tax changed?
Before 2017, landlords could deduct mortgage expenses from their taxable profits, including all of the interest they paid for the mortgage on their rental property.
In 2017 this began to be phased out until April 2020. it stopped altogether. This was replaced by a 20% tax credit, which is substantially less for higher rate taxpayers who, under the old system, would have received 40% tax relief.
How has this affected landlords?
These changes in how landlords are taxed have had significant implications for them, with one in three reporting that their portfolio is not as profitable as it was before the changes came in. The same number of landlords have considered selling properties due to the loss of mortgage tax relief.
Apart from the financial impact, the lettings sector is undergoing a raft of changes, with more on the horizon; we recently talked about how the Renters Reform Bill will change things. All these changes and proposals are proving challenging to keep up with, causing 58% of landlords to claim that changing and confusing government legislation is the biggest challenge.
Two options for landlords
In addition to changing legislation, 32% of landlords stated that rising taxes are also a key challenge. To manage the financial impact of these changes, landlords are taking one of two main options – raising rents and selling properties.
25% of landlords said they have increased rents to cover the cost of increasing tax on their tenants, and for landlords with more than 20 properties, this increases to 58% passing on costs.
Around the same proportion of landlords with more extensive portfolios (26%) have reduced the size of their properties to reduce the impact of tax changes. However, the percentage decreases to 13% for landlords with smaller property portfolios.
What does the future hold for landlords?
With more changes to the law on the drawing board that will impact landlords, for example, renting with pets, changes to energy efficiency rating requirements, as well as possible interest rate rises, life for landlords won’t get any easier in 2022.
Ongoing changes and uncertainty in the rental market will continue to have unintended knock-on effects, such as reducing the amount of affordable housing and rental properties on the market.
Despite the challenges, almost 60% of landlords still believe that letting a property is worthwhile. Demand for rental properties is still high, so there is still much for landlords to be optimistic about, so long as they have a realistic business plan, which includes the right support that keeps costs down and maximises occupancy.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamline your costs and reduce your workload, then contact No Letting Go today.
Understanding the numerous taxes that apply to landlords and then calculating the amount of tax owed can be complex. To ensure that you meet all your obligations, keeping up to date with tax changes that may affect your income is essential.
In 2022, we’ve already seen buy-to-let tax changes coming into full effect, so what else should landlords be aware of?
Changes to tax
Some changes in UK tax regulations may impact landlords:
Tax on dividends – There is currently a £2,000 annual dividend allowance, but tax must be paid on income from a dividend after this allowance. From April 2022 tax on dividends increased by 1.25%. This means if you pay the basic tax rate, you will now pay 8.75% tax on dividend payments, those paying a higher rate of tax will pay 33.75%, and additional rate taxpayers will pay 39.35% on dividends.
National Insurance – National Insurance contributions have increased by 1.25%. Landlords renting properties as a business venture will see an increase in the NI contribution they must pay on any rental earnings if they exceed the relevant thresholds. It also means that if they employ people in their property business, employer contributions to NI will also increase.
Capital Gains Tax – The timeline for reporting and paying Capital Gains Tax made on profits from selling a buy-to-let property has increased from 30 days to 60 days.
Make Tax Digital – From April 2022, any landlord with a VAT-registered property rental business with a rental turnover below the VAT threshold of £85,000 must now keep digital tax records and report income and expenses figures online to HMRC each quarter as part of the Making Tax Digital initiative.
From 2024 this requirement will be extended to include self-employed landlords completing self-assessments. They will be required to maintain digital financial records compatible with HMRC’s Making Tax Digital system.
More changes on the horizon – 2022 is shaping to be an economically challenging year, with the possibility of higher inflation and recession affecting landlords’ finances.
Inflation, already at a 40-year high, is set to increase. In addition, rising interest rates are likely to continue their upward trend throughout 2022. Any rise in interest rates may concern landlords; if a mortgage is due to be renewed, it may be time to shop around for the best deal.
In addition to financial changes, The Renters Reform Bill will continue to go through the stages of parliamentary approval. Changes, such as proposed energy ratings certificate, carbon monoxide alarm regulations and “Lets with Pets”, mean landlords should be prepared for more changes in regulation and the extra costs they imply.
Preparing for an uncertain future
Making sure you are on top of your existing landlord’s obligations will make adjusting to whatever lies ahead easier because you won’t be in a position where you are already trying to catch up with reforms. Implementing a thorough inventory process is one important step to help you achieve this, providing you with a solid benchmark and clarity in an ever-changing sector.
The right business partner can also help you reduce running costs and ensure optimal occupancy for your properties.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamlining costs, reducing your workload and boosting efficiency, then contact No Letting Go today.
Finding a new home to rent can be exciting, but it can also be daunting. It’s a big financial commitment and one you don’t want to get wrong. To help you check that you’ve found the right property for you, here are five things to look out for before signing on the dotted line.
Five things renters should consider
1. Is the furniture in good condition?
It’s important to check that furniture in the property is in good working order and meets fire safety standards. Furniture that comes under fire safety rules should have labels attached to confirm they meet the required standards. Any furniture, including sofas, beds, cushions and mattresses that don’t meet fire standards, is broken or needs replacing through wear and tear should be replaced at the landlord’s expense. It isn’t your responsibility to replace the furniture in furnished property.
2. Is the property secure?
Different properties have different security needs, but it’s essential to know that your home is secured properly. You need to feel safe in your home, so ensure that locks are fitted properly and of good quality. Windows should also be checked to ensure they close properly and can be locked. It may also be necessary to consider security lighting and an alarm system.
3. Are there signs of dampness?
Damp and mould create uncomfortable living conditions and can be a health risk. Look in the corners of rooms and around widows for dampness and condensation. Signs of mould, flaking paint or wallpaper coming away from walls are all warning signs.
4. Are safety alarms in place?
There are specific regulations around smoke & CO alarms and CO2 monitors in rental properties, and you need to ensure that any property you are looking at has the required alarms in place and that they work. If not, this is a breach of the law and needs to be addressed before you can move in.
5. Check there’s an inventory
A comprehensive property inventory can save you from difficult conversations and disputes at the end of the tenancy. It should list all furniture, appliances, etc. and their condition, and you must agree that the inventory accurately represents the property’s contents and condition. If you don’t have one, you could find yourself bearing the cost of repairs and replacements you weren’t expecting when you come to leave the property.
Don’t rush in, only to pay for it later.
A few checks before you decide to rent a property could save you a lot of heartache and unforeseen costs down the line. Understanding what you and the landlord are responsible for when you look at a property can help you ask the right questions if you are unsure of anything.
Taking time to read a letting agreement can help you feel confident that you and your landlord are starting off on the right foot from the beginning of your tenancy.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamlining your costs, reducing your workload and ensuring that both you and your tenants are well protected, then contact No Letting Go today.
Short term lets have had a significant role to play in the rental market over the past year, performing better than other sectors, and the good news is that this trend looks set to continue in 2022.
What’s driving the growth in short term lets?
Although the short-term rental market has not been immune to the challenges presented by the past couple of years, it has weathered the storm well for three key reasons:
The rise of the “staycation”: Many people are choosing to avoid foreign travel and remain in the UK for their holiday, with the increase of “staycations” driving demand for short-term holiday lets. People’s desire to explore the UK and enjoy the convenience of holidaying while avoiding airports indicates that demand for short-term lets for holidays is here to stay. BuyAssociation reported that 47% of families looking for holiday accommodation were interested in finding a cottage or villa rather than staying in a hotel.
Nomadic workers: Another trend driving the demand for short term lets is that of the nomadic worker. For many people, working from home looks set to remain a long-term work option; it doesn’t matter where they are based if they can continue to work. This has seen a rise in people taking on short term lets they can work from but also use as a base to explore a new area, allowing them to combine travel and work.
Modern rental options: We recently discussed how the build-to-rent sector continues to grow and the increasing availability of purpose-built rental properties specifically designed for the rental market. They offer an attractive proposition with great facilities, easy access to wi-fi, and high-spec interiors. Unlike many traditional rental properties, they offer flexible rental solutions, including short-term lets. These types of properties speak to those who don’t want to rent, and as the number of build-to-rent properties increases, it will also help attract more people to the short-term rental market.
How can landlords adapt?
As the short-term rental market is likely to continue performing well, landlords and letting agents may want to look to their own portfolios to see how they can benefit from the trend. In this case, the ability to be flexible and manage regular changes in tenants will be essential, and technology will play a vital role.
We’ve already seen how technology such as keyless entry, digital property guides, and an array of communications tools can smooth the onboarding process for new tenants. But there’s also an array of technology that supports the quick transition of tenants. Online inventory tools, check-in services, and end-of-tenancy checks all make property management efficient and easy while still protecting your property and keeping operational costs low.
There are plenty of opportunities for landlords and letting agents in the rental market, but you may need to examine how you apply tech to manage your properties to keep pace with change.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, applying high-tech solutions to streamline your cost and reduce your workload, then contact No Letting Go today.
Will changes in the Model Tenancy Agreement and the proposed Dogs and Domestic Animals Accommodation Bill make renting with pets the new norm? It could make life easier for pet owners looking for rented accommodation, but it may not give tenants the absolute right to keep a pet they were hoping for.
Renting with pets is in demand.
Rightmove reports a 120% increase in the demand for pet-friendly rental properties. This is in stark contrast to the PDSA report that only around 7% of privately rented accommodation is advertised as pet friendly. It reflects that finding a rental property if you have a pet isn’t straightforward.
In a move that may address this, the government is taking steps to make it easier for anyone with pets to find somewhere to rent by changing the default position of landlords on pet ownership.
So what’s changing?
The Model Tenancy Agreement is the government’s recommended contract for landlords to use with tenants, and it has been updated to be more pet friendly. There’s no longer a blanket ban on tenants having pets, and landlords are being encouraged to allow them.
Renters must still seek written consent from landlords to keep pets on the property, but landlords must respond within 28 days, giving a good reason for objecting. However, they still have no legal obligation to accept pets.
In addition, the Dog and Domestic Animals Accommodation Protection Bill is seeking to add further assistance for responsible pet owners to find rental properties. While this bill is still awaiting approval, it proposes that pet owners with a ‘certificate of responsible animal guardianship’ would be able to demonstrate to landlords that they are responsible owners, making the landlord more comfortable with leasing to a pet owner.
Neither of these measures gives tenants the legal right to keep pets in rented accommodation, but they change the default position of pets in rented accommodation. The Model Tenancy Agreement states that landlords must not withhold or delay consent to refuse a pet. The Dog and Domestic Animals Accommodation Protection Bill would require landlords to have a certificate of exemption if they want to prohibit pets, for example, religious objections.
What does this mean for landlords?
Many landlords may wish to support their tenants having pets but are cautious about the potential challenges this can present. These include additional damage and wear and tear a pet may incur at a property or the risk that it may be loud and become a nuisance to other residents.
In our article Should I allow pets in my rental property? we look at the pros and cons for landlords of accepting pets and ways in which they can mitigate potential loss by ensuring that their tenancy agreement stipulates clear guidelines on pet ownership and ways to mitigate any additional costs.
It seems inevitable that demand for pet ownership in rental properties will increase. To keep pace with the change and tenant needs, landlords and agents mustn’t put this on the back-burner. Being prepared for change is the best way to ensure that you have the right solution that works for all parties.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go can become your inventory partner, protecting your property and its contents while streamlining costs and reducing your workload, then contact No Letting Go today.
We’ve seen rises in the cost of food, fuel and energy recently, but this may not be the end of it for renters. It seems that rents are also set to continue going up in 2022.
What’s happening with rents at the moment?
Since the end of 2021, rental prices have been on the increase. In the 12 months to March 2022, private rental prices paid by tenants in the UK increased by 2.4%, which is the most significant annual growth rate since July 2016.
London is the exception to the recent increase in rent prices, with private rental rates increasing by 0.4%. So if you exclude London, national rental prices across the rest of the country increased by 3.3% during that period.
What’s causing the rise in rents?
The rise in rents is driven by two key factors: a rise in demand for rental properties; and not enough supply to meet the demand. Both the Association of Residential Letting Agents (ARLA) and the Royal Institute of Chartered Surveyors (RICS) report a growing demand for rental properties.
This is an ongoing trend, as the Rightmove rental price tracer for Q4 of 2021 reported:
· Tenant demand is 32% higher than the same time the previous year
· The number of available properties is 51% lower than the same period in the previous year
· Competition between tenants for available properties is at 94%, compared to the same time the previous year
With demand for rental homes increasing by 76% in the New Year period of 2022, compared with the same time in 2018 to 2021, there seems to be no let-up in sight.
What happens next?
Rightmove predicts rents will rise by 5% in 2022 as the struggle between supply and demand continues, whilst Zoopla predicts a rent rise by 4.5% across the UK in 2022, excluding London, where the surge is likely to be a little lower, at 3.5%.
Renting dynamics are expected to change over the coming months as city workers return to the office and want to relocate near their workplaces to avoid commuting. Students return to their places of study, including many from overseas.
Tenants who remained in situ during the pandemic may also be looking to make the move they had put off.
The rental market is expected to move quickly over the coming year, and competition for properties will be fierce. Renters need to move rapidly to secure the property they want. Yet, they could also face the additional challenge of increasing living costs that will squeeze their budgets. This means that many renters will have to reassess what they can afford.
High demand should mean landlords can secure a good return on their rental properties and reduce empty periods. However, it’s still important to maintain properties to a good standard if they want to attract their ideal tenants.
No Letting Go
If you would like to discuss how our local support and national networks at No Letting Go can help you to secure the tenants you want by acting as your inventory partner while streamlining your costs and reducing your workload, then contact No Letting Go today.
The Renters Reform Bill White Paper is expected in 2022 and will outline wide-ranging reforms proposed for the private rental sector. Landlords need to be prepared to make changes to ensure that they meet the new obligations when they are introduced.
What is expected to be in the Renters Reform Bill?
There are several fundamental changes proposed in the Bill that will directly impact landlords:
• Abolishing Section 21 “no fault” evictions: Landlords will need to provide tenants with a valid reason for eviction at the end of the tenancy, which is not currently required.
• A lifetime tenancy deposit: This will ease the financial burden for tenants when moving between tenancies as deposits will be transferred with each move, rather than having to save for a new deposit for the following property while waiting for the last deposit to be returned.
• Improved standards in rented accommodation: To ensure all tenants have a right to redress and stop criminal landlords from unscrupulous practices to improve the standard of rental properties.
• Strengthening repossession grounds for landlords: When the landlord has a valid reason to repossess the property, the Bill will ensure they can do so.
• Introduction of a landlord register: This will improve how they are held to account so tenants can be assured they are renting from a landlord who meets their legal duties.
• Improved eviction process: Making the process easier and quicker for landlords and tenants and providing mediation services to avoid the courts.
• Greater powers for local authorities: To enforce the rights of tenants.
Why are the changes being introduced?
The Renters Reform Bill is seeking to make changes to offer greater security for tenants while also ensuring that the rights of landlords aren’t unfairly diminished, allowing them still to take appropriate action when there’s justification.
The Bill will also elevate some of the financial burdens on tenants regarding managing deposits. These changes should improve standards for tenants with greater clarity on all sides over what their responsibilities are.
How will the proposed reforms affect landlords?
Landlords must make themselves up to speed with all the changes the Bill introduces so they don’t miss any of the new obligations. This could mean updating tenancy agreements, deposit and rental processes, including eviction notices, to reflect new regulations.
To remain competitive and attract the tenants you want, all landlords and agents should already be keeping their properties maintained to a high standard. A robust inventory procedure can help you achieve and maintain standards in your rental properties. If not already in place, landlords and agents should consider this as a tool to meet their new obligations under the Renters Reform Bill.
At No Letting Go, we will be working proactively to ensure that our inventories are ready for any changes the Renters Reform Bill introduces and will work with landlords and letting agents so that our services continue to help them meet their regulatory obligations.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go can become your inventory partner, keeping you compliant with the law, streamlining your costs and reducing your workload, then contact No Letting Go today.
The Covid-19 pandemic created an unprecedented shift to working from home when many offices were forced to shut. This significantly impacted the rental market as tenants reassessed what they needed from their home property to support their new working style.
What changes did tenants want when working from home?
Working from home had an impact on how people looked at their homes, whether owned or rented, in three key areas:
• Space to work
• Outdoor space to enjoy
There was a need for working space for more than one family member for many. Extra space was needed by many to enable them to work from home. Workers desired an extra room to accommodate a home office, but even the ability to set up a specific work area or desk in an existing room made a big difference.
In addition to extra indoor space, people craved outdoor space. A garden, or even a balcony, became important to enable people to get outdoors when they weren’t allowed to leave home. Even after restrictions were lifted, being able to grab a break and some fresh air while spending a long day at a home desk is essential for physical and mental health.
Finally, where people were able to live also changed. They were no longer tied to cities or commuter suburbs to be able to get to the office, saving on travel time and expenses.
They could, and did, choose to live further afield as their homes became their workspaces, especially more flexible renters. This saw many people leaving city and town centres to find cheaper accommodation in the country or market towns where they could afford the extra indoor and outdoor space they desired.
What’s happening after lockdown?
Hopefully, we’ve seen the end of lockdown, and there’s an expectation that things will return to how they were pre-pandemic, including tenants’ expectations. But according to YouGov, 60% of British workers would still prefer to work remotely sometimes, so the need for space and desire to live in more remote locations could be here to stay.
However, there does seem to be some shift back to cities as offices begin to reopen. Last month, the BBC reported that some workers’ gradual return to the office and a winding down of covid restrictions led to increased demand in the urban rental market. In January, demand was up 76% compared to an average January in each of the previous four years.
This is encouraging news for landlords with properties in cities and larger towns. However, they still need to consider that working from home is likely to continue for many tenants and will still influence their choice of property.
Tenants’ rising lifestyle expectations.
We recently spoke about continued growth in the build to rent sector, and part of this boom is the focus on delivering facilities that support modern lifestyles. Popular properties have dedicated working areas, offer access to good broadband and amenities and maintain a high standard of living that accommodates the changing expectations of renters who consciously decide that renting is better for them than homeowning.
A complete return to the pre-pandemic world is unlikely, and landlords who can adapt and keep pace with the changing needs of tenants will continue to see a healthy demand for their properties.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go can become your inventory partner, ensuring that your property remains desirable to today’s tenants, contact No Letting Go today.