PRS regulation – what are the key dates for East Sussex landlords in 2021?
Now 2021 is underway, it remains clear that the 12 months ahead will be a challenge for landlords. On top of dealing with the ongoing impact of the pandemic, there are various legislation changes taking place in the coming months that landlords need to watch out for.
Despite the pandemic dominating all parts of our lives last year, there were still a range of regulation changes introduced in the lettings market including new Capital Gains Tax rules, the introduction of mandatory electrical checks and the extension of the Tenant Fees Act.
With this in mind, landlords need to keep a keen eye on the calendar as regulation of the rental market looks set to continue apace, despite the long-term battle with coronavirus.
Below is a selection of key dates which have already had an impact on the market or will do so in the coming weeks and months…
January 8 – The eviction ban has been extended
It may have come as no surprise, but the ban on evictions of private tenants was extended until ‘at least’ February 21 on Friday January 8.
The ban will be reviewed again next month, but with the country still expected to be under severe restrictions, it is highly likely that the ban will be extended once more.
Landlords are still able to pursue evictions if tenants are in more than six months of arrears or if they are dealing with a case of anti-social behaviour or domestic violence.
With further restrictions on evictions, it’s vital that landlords in East Sussex have the required insurance in place to cover any legal action while also protecting their income.
January 29 – Pets in lets Bill is progressing
Another date for landlords to keep tabs on is January 29 when a Second Reading of the Dogs and Domestic Animals Accommodation Protection Bill takes place.
The Bill, launched by Romford MP Andrew Rosindell last year, has strong cross-party support and is being backed by high-profile charities such as the RSCPA and the Dogs Trust.
It aims to make it a right for tenants to have domestic animals in rental properties provided that they can demonstrate being a responsible owner. If the Bill becomes law, renters will have to prove that their pets have been vaccinated, spayed or neutered, free of parasites and that animals such as dogs respond to basic training commands.
Although there are various stages to pass before the Bill can become law, it is gathering momentum and is something all landlords need to consider.
If you are thinking of allowing pets – or are obliged to allow them in the future – it’s vital that you have the necessary measures in place, including insurance and a bolstered tenancy agreement.
March 31/April 1 – Stamp duty changes are coming
The stamp duty holiday – which has been crucial in sustaining property market activity in recent months – is set to come to an end on March 31 2021.
Therefore, landlords looking to expand their portfolios and take advantage of the tax cut need to act now or they will miss out.
The rules of the stamp duty holiday allow landlords to purchase properties without paying stamp duty on the first £500,000 (although they will be required to pay the additional 3% surcharge on second home purchases).
Rightmove research suggests the average buy-to-let landlord nationwide will benefit from a stamp duty saving of £2,000 when purchasing a property before the tax holiday expires.
On the subject of stamp duty, an additional 2% surcharge for overseas buyers of second homes comes into play on April 1 2021.
While this measure is expected to have the biggest impact in London, demand for investment properties could be lower across the country allowing domestic landlords to benefit from lower prices when expanding their portfolios.
April 1 – Electrical safety rules are tightening
Introduced last year, The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 require landlords to provide an Electrical Installation Condition Report (EICR) for all new tenancies.
There is also a requirement to ensure that all fixed electrical installations are tested and inspected by a qualified professional at least every five years.
From April 1 2021, the rules are being extended to cover all existing tenancies. With this in mind, landlords have a short window to ensure that all their properties have the required documentation and relevant testing has been carried out.
Tenant safety remains paramount and there are also significant financial penalties for those who don’t comply with the measures, so landlords must make sure they have everything in place now for a seamless transition when the legislation is extended in the spring.
What else do landlords need to look out for this year?
Alongside the above measures with fixed dates, there are a number of proposals for legislation changes which could also be enacted this year.
There is the long-awaited Renters’ Reform Bill, which includes measures to introduce lifetime deposits for tenants and scrap Section 21 evictions.
Moreover, there is speculation building that Capital Gains Tax rates could be increased as part of the Budget on March 3. And with the Brexit transition period now over, there could be further changes to the Right to Rent scheme later this year.
With more regulation changes on the horizon and the ongoing impact of the pandemic to consider, it is more important than ever for landlords to work with a reputable local letting agent.
The best agents will be able to help you keep on top of your compliance obligations, manage your rental income and provide you with the protection you need during uncertain times.
Despite the uncertainty, it remains a good time to be a landlord with strong demand for rental properties and solid long-term market fundamentals.
If you require any further advice on the lettings process, you can get in touch with our expert team today. You can also see how much your rental property could be worth on the Bexhill, Eastbourne or Hastings market by requesting a free and instant online valuation.