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.
With several types of tenancies out there, the variations can get confusing for new tenants and landlords. So, what is a periodic tenancy?
Periodic tenancies can offer great benefits, including increased flexibility and less paperwork. However, they aren’t without their drawbacks.
That’s why we’ve created this guide on the risks and rewards of periodic tenancies, to help you make an informed decision before drawing up a contract.
What is a Periodic Tenancy Agreement?
A periodic tenancy is a tenancy that runs for a certain period of time, most commonly month to month. Periodic tenancies can also run on a week to week or quarterly basis, although this is less common.
Unlike fixed term tenancies, periodic tenancies work as a rolling contract which can be terminated by landlord or tenant by giving notice.
Types of Tenancy Agreements
Tenancies can come in all shapes and sizes, depending on the terms and conditions of the agreement. However, here are the most common types of tenancies you’re likely to come across;
Assured Shorthold Tenancy
Assured shorthold tenancies are the most common and apply to most private rentals with a tenancy date starting after 15 January 1989. Most assured shorthold tenancies begin with a fixed period of 6 or 12 months.
Non-Assured Shorthold Tenancy
If your rental property demands less than £250 or more than £100,000 in rent per year or it is used as a holiday home, it won’t be eligible for an assured tenancy. This means you don’t have to enter the tenant’s deposit into a protection scheme or serve a section 21 notice to evict tenants.
It is unlikely you’ll need an assured tenancy these days unless you are a housing association. This type of tenancy gives the tenant longer-term stability.
Sometimes referred to as a license, excluded tenancies are for tenants who lodge with their landlord and share communal areas.
If a tenancy started before 15 January 1989 it may be a regulated tenancy. The difference being that tenants have enhanced rights when it comes to eviction and ‘fair rent’.
When renting to companies, different rules apply in terms of deposit protection and eviction notices.
Fixed Term Tenancy
A fixed term tenancy lasts for an agreed set of time, depending on what is set out in the tenancy agreement. Usually this will be 12 months.
Short-Term Fixed Tenancy
A short-term fixed tenancy lasts for 90 days or less.
A periodic tenancy works on a rolling basis with no fixed end date. E.g. month by month.
What is a Statutory Periodic Tenancy?
A statutory periodic tenancy occurs when an assured shorthold tenancy comes to the end of its fixed term and the tenant stays at the property without renewing the contract. If the tenant continues to pay rent and it is accepted by the landlord, the tenancy will continue on a periodic, rolling basis.
This transition from fixed term assured shorthold tenancy to statutory periodic tenancy is automatic.
What is a Contractual Periodic Tenancy?
A contractual periodic tenancy differs in that it is agreed in the tenancy contract as opposed to automatically transitioning from a fixed term into a periodic tenancy. This can either be agreed upon at the start of the tenancy or shortly before the fixed term contract expires.
It is also possible to enter into a periodic tenancy from the outset by setting the initial term as one month or week.
How Does a Periodic Tenancy Work?
While a fixed term tenancy lasts for an agreed set of time, a periodic tenancy works on a rolling basis, from month to month or week to week. It doesn’t end until one party gives notice.
In a periodic tenancy, the period depends on when the rent is paid by the tenant. So, in a monthly period tenancy the tenant would pay rent each month.
Shorthold tenancies become periodic tenancies after the fixed term agreement expires and if there is no new contract drawn up with the remaining tenants. The assured shorthold tenancy will automatically become a periodic tenancy as long as the tenants do not change, and they are happy to retain the same contract. The same conditions will apply and there is no further action needed by the landlord or tenant.
Ending a Periodic Tenancy
To end a periodic tenancy, there are several legal processes that can take place;
- Both landlord and tenant mutually agree to end the tenancy
- The landlord decides to evict the tenant
- The tenant gives notice
- The landlord gives notice
Periodic Tenancy Notice: Tenants
To end a periodic tenancy, tenants will need to give the right amount of notice depending on the terms stated in the tenancy agreement. They also need to ensure it ends on the right day. For example, if a monthly periodic tenancy began on 1st January it will need to end on the last or the 1st day of the month. From this date, they will no longer be liable for rent payments.
Statutory Periodic Tenancy Notice
If it is a statutory periodic tenancy, tenants must give at least 1 months’ notice for a monthly contract or at least 4 weeks’ notice for a weekly contract. The notice must end on the first or last day of the tenancy period.
Periodic Tenancy Notice Period: Landlords
Landlords must give tenants a written ‘notice to quit’ which must end on the last day of the rental period, give the minimum notice period and include legal information.
For statutory periodic tenancies, it is also possible for landlords to issue a section 21 notice as long as the landlord gives the tenant at least two months’ notice and the last day is the last day of the tenancy period. If the tenant does not move out on this date, landlords have the right to request a court order to regain possession. However, changes to the law regarding section 21 notices now require a landlord to give their reasoning, alongside relevant evidence.
Benefits of a Periodic Tenancy for Landlords
A periodic tenancy can have wide-ranging benefits for both landlord and tenant, including;
- Increased flexibility. If you suddenly need to regain possession of your property, a periodic tenancy speeds up this process as you don’t have to wait until the end of a fixed period.
- Attracting tenants. For some tenants, this flexibility is a bonus. If your tenant moves a lot for work or often needs to relocate suddenly, a periodic tenancy becomes appealing.
- Reduced letting agency fees. Periodic tenancies can dispel the need for renewals and the administration costs that come with them.
- If for any reason you need to increase the rent, this is made a lot easier by periodic tenancies. Revisions to rent payments can be made much more quickly when operating on a month by month basis.
- If you are having issues with a particular tenant, a periodic tenancy may be in your favour as you are better able to evict problem tenants as a last resort.
Risks of Periodic Tenancies for Landlords
With these advantages also come risks. If you’re thinking of entering into a periodic tenancy, watch out for the following potential dangers;
- Naturally, periodic tenancies are more likely to attract tenants looking for shorter, more transient leases. If it’s stability you’re after, you may want to think twice.
- Similarly, shorter term tenants can cost more in terms of marketing and vetting potential new tenants to replace them.
- With 1 month or less notice periods, you don’t have a long turnaround time if a tenant decides to move out unexpectedly. You will need to have end of tenancy cleaning and maintenance processes finely tuned so as not to lose out.
- If your tenant moves out during a ‘notice to quit’ period, you may be liable for paying council tax for the property. To avoid this situation, make sure you have a contractual periodic tenancy agreement in place to ensure this remains the tenant’s responsibility.
Periodic Tenancies: Good Idea?
Periodic tenancies can be a good idea as they offer increased flexibility for both landlord and tenant and can reduce the number of administrative tasks needed throughout a tenancy.
However, to protect your investment, we recommend;
- Always drawing up a contractual periodic tenancy agreement. This way you have all the agreed terms in writing and won’t be liable for council tax payments if your tenant moves out unexpectedly.
- Getting your property marketing up to scratch to attract new tenants and avoid extended void periods.
- Making sure you have all the processes in place for a speedy turnaround to avoid any losses. This includes;
- A detailed and fuss-free inventory report is vital when you’re dealing with potentially shorter tenancies. Having a streamlined process in place will help protect you against loss or damage and help recover any costs without going through lengthy disputes.
Be Prepared with No Letting Go
The easiest way to protect your investment and maintain a happy landlord/tenant relationship is to entrust a comprehensive, unbiased inventory reporting service.
Here at No Letting Go, we provide a tailor-made service, including everything from check-in to property visits.
Find out more about our property services to see how we could build them into a package that suits you.