(58)
Leave us a review
Leave us a review
In this blog, we’ll take a look at the policies landlords across Britain might see in the coming months and years, following the activity and changes in 2019, and the general election last month.
Section 21
Last Summer, the government consulted on abolishing Section 21 and introducing assured tenancies as the default tenancy. While we await the response to the consultation, the reform is highly likely to go ahead following commitments in the Conservative manifesto.
In response to the government's announcement, an NLA survey found that landlords will be more selective about the type of tenants that they would accept. Around 16% said they would exit the Private Rented Sector (PRS) completely and 1 in 10 would reduce their portfolios.
Further analysis by Capital Economics found that if landlords respond to the abolition of Section 21 in this way, supply of rental properties would reduce by 20%, meaning almost 1 million properties would no longer be available.
A more concerning finding was that there would be a 59% reduction in the number of dwellings available to tenants in receipt of benefits, questioning whether the change will actually provide protection to tenants who need homes the most.
Capital Economics also found that court reform could significantly lessen the impact of abolishing Section 21. So with court reform, the reduction of supply could fall to 4-8%. And the reduction of supply for benefit claimants could fall to 10-23%.
In January, the government announced a new Housing Complaints Resolution Service and an intention to introduce compulsory redress for landlords. Letting agents are already required to be registered with a redress scheme, but the intention is to include landlords as well. Landlords could face a fine of up to £5,000 if they do not join the scheme. The government needs pass legislation for this and has pledged to do so quickly, with a plan for implementation in 2020.
Following the selective licensing review in the Summer, recommendations were made that it would be good practice for local authorities to report against their objectives, but interestingly that reporting wasn’t made a requirement. The review recommended that enforcement costs should be charged pro rota, and expanded the definition of a ‘fit and proper person’, but it seems selective licensing will continue as before.
Following the review of deposits and passporting systems, it’s likely that insurance backed schemes will continue, and that there will be a push to introduce deposit passporting. Although technically challenging, deposit schemes are now exploring how to make this work for both landlords and tenants, ensuring a smooth and efficient process when tenants move from one property to another.
Energy-efficiency is a big issue following the protests and activities during 2019, highlighting the effects of climate change. The government has committed the country to reach a net-zero carbon by 2050, meaning properties will need to meet an A rating on their EPC by 2050 at the latest.
In April 2020, an E rating on an EPC becomes compulsory for all tenancies (unless you have an exemption). It’s likely that this minimum requirement will increase by one rating every five years until the 2050 target year.
It’s important to remember that net-zero is about carbon, not energy-efficiency. Some energy-efficient systems, like a gas combi-boiler, are bad in terms of carbon. The government intends to prevent gas boiler installation in new-build properties from 2025, and we think there will be further requirements for existing properties to remove such appliances in the future.
It’s important that landlords consider energy-efficiency in the long-term. It’s particularly helpful to consider whether there are changes you can make during empty periods, in anticipation of future regulations.
Also high on the government agenda is health and safety. The rating system HHSRS is currently being reviewed; with a plan to update the guidance, training, and streamline the process so it’s easier for local authorities, landlords and tenants to understand the requirements.
The government had previously committed to introducing mandatory five-year electrical safety checks, but needs new regulations for these, and of course the response to Grenfell continues, so building safety will be a priority too.
Hopefully this overview has helped you with future planning for your properties for a successful year ahead.
If you’d like to discuss buying or letting within London, please contact us austin@austinhomes.co.uk or via our social channels for more information.
Miss. Claire White
W. Why Media
E. claire@whymedia.com