Proactive management helps landlords navigate 2022 legislative changes
- 14th January 2022
- Landlord Property News
From Making Tax Digital to the Model Tenancy Agreement, your agent is here to help
As 2022 gets underway, there are several legislative changes around the corner that will impact landlords. Here are some of the key issues that landlords will need to consider and how your agent can guide you through them.
During the pandemic where face-to-face contact was limited, temporary measures were put in place to permit Right to Rent checks over video and by using photocopies of documents, such as passports, driving licenses and Visa’s, rather than the originals, however in-person Right to Rent checks are scheduled to resume as normal from April 1, where landlords and their agents will be required to check, maintain and copy original documents. Alternatively, online checks via the Home Office online service, using a Share Code, applicable only where tenants have a biometric residence permit, have settled or pre-settled status or have used the online app to apply for their visa can be completed, negating the need to check, maintain and copy original documents. If a tenant fails to evidence their Right to Rent, they can be denied occupancy and Landlords and or their agents in breach of the legislation could also be liable for a civil penalty notice. An established agent can deliver the most comprehensive suite of online and in-person identity verification services to ensure that landlords are supported throughout the process.
April 1 is also the date when this year’s energy price cap takes effect. The Government will announce how much the cap will be in February. However, proactive agents will be able to buy in bulk energy packages to enable tenants to maintain the most competitive rates.
A whitepaper on the Renters Reform Bill is anticipated soon, which will support a long-term letting market set to benefit both landlords and tenants. This will include details on abolishing Section 21, which allowed landlords to cancel rolling tenancies with two months’ notice without a reason. The bill will also include proposals to replace rental security deposits with a lifetime deposit that moves with the tenant and a rogue landlord database accessible to the public.
Whilst landlords reserve the right to prevent tenants from keeping pets in their properties, the new Model Tenancy Agreement launched in January means they may no longer issue a blanket ban if they receive a pet request from a tenant. Landlords must object in writing if they receive such a request and they must only reject tenants with pets if there is good reason to do so, for example, a small property where owning a pet could be impractical. In such cases, open dialogue will be helpful in arriving at practical solutions.
The Government announced last November that carbon monoxide alarms must be fitted in rooms of social and private rented properties where there are fixed combustion appliances like gas boilers and fires (excluding gas cookers). Landlords will need to ensure alarms are fitted when new appliances are installed and must repair or replace smoke and carbon monoxide alarms if they are reported as faulty. No date has been set for when this change will come into effect, but good practice would be to have carbon monoxide alarms installed in any room where there is a gas appliance to help keep tenants safe whilst in the property.
In respect of fiscal matters, all VAT registered landlords and letting agents must sign up to Making Tax Digital, which digitalises VAT records and obliges landlords to use software packages to submit their returns. This is part of the UK Government’s plan to make HMRC one of the most digitally advanced tax administrations in the world. Landlords are encouraged to seek advice from their accountant to make sure they are following the correct guidelines.
There’s good news regarding taxation. Capital gains tax will be unchanged for this tax year, despite speculation that the tax would rise, a real boon for buy-to-let investors. The deadline for reporting capital gains tax on the disposal of the property has gone up from 30 days to 60 days.
Stephen Ludlow, Chairman at ludlowthompson says: "Part of a landlord’s job is to stay up to date with current regulations to ensure they protect both their tenants and themselves. Regulated agents with fully-trained staff and extensive experience will be able to guide landlords through the process."
"Increased regulation can have a beneficial impact on the market. Landlords who follow guidance and ensure their rental properties are maintained to a high standard are more likely to attract longer-term tenants, therefore deriving higher total returns."
"The reluctance to tamper with CGT on Buy to Let investments and the exclusion of rental income from the NI tariff applied to dividends from April 2022 suggests there is a recognition of the rental markets' contribution in encouraging labour mobility, which supports economic growth."
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Increased regulation can have a beneficial impact on the market. Landlords who follow guidance and ensure their rental properties are maintained to a high standard are more likely to attract longer-term tenants, therefore deriving higher total returns
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