10 New Rules for Landlords in 2022
The new year always brings new challenges, and this is no different for landlords. In particular, the ongoing Covid-19 pandemic has largely created an environment of economic uncertainty, and this has undoubtedly stretched into the housing/rental market.
Alongside this, 2022 will see landlords affected by factors including new bills and reforms, tax changes, inflation, licensing requirements and environmental requirements. Not all these changes are potentially negative, so in our latest blog we take a look at how these various changes could affect landlords in 2022.
The Renters’ Reform Bill brings three main new changes for landlords in 2022. Firstly, the government consulted on abolishing Section 21 which enables landlords to end ‘rolling’ tenancies with two months’ notice without providing a reason. This means that landlords would no longer be able to evict a tenant at short notice and without good reason helping avoid unfair eviction and creating more security in the rental market.
Secondly, the bill includes plans to replace rental security deposits with a ‘lifetime deposit’ where a tenant’s deposit is transferred from one landlord to the next reducing the stress for renters of saving for a new deposit.
Lastly, the bill proposes making the rogue landlord database, which was launched in April 2018 and includes a list of agents who have been given a banning order or been convicted of a banning order offence, available to the public.
January 31st was the deadline to complete your online self-assessment tax return for the previous tax year, if you missed this deadline you may have to pay a penalty. The 2020-2021 return is the first on which the new mortgage interest tax relief credit applies meaning as landlords you are only able to offset 20% of your mortgage interest payments when filing tax returns.
Additionally, as also seen on Seymour, new rules introduced in April 2020 may mean higher tax bills for you as mortgage expenses may no longer be deducted from your rental income, you are also receiving less of a discounted rate and some private landlords may be forced into a higher tax bracket. As a result, you may need to adjust your rent or other costs.
The official Gov.uk defines capital gains as concerning profit from when you sell or dispose of a property. Changes have been made to the filing deadlines for reporting and paying capital gains tax on the disposal of properties meaning landlords now have 60 days instead of 30 days to report and pay your capital gains tax bill when selling a buy to let property. This will help you better meet deadlines and reduces the risk of a late payment.
Landlords will have until 2026 (extended from 2025) for newly let properties and 2028 for existing properties to achieve band C on energy performance certificates. This is all part of the governments plans to improve energy efficiency in the private rented sector in 2022. This not only gives landlords longer to make any needed changes and refurbishments e.g insulation and double glazing but allows you to spread any costs involved over a longer period, making it more manageable.
The Guardian describes a green mortgage as one that rewards landlords of energy efficient properties by offering them more favourable terms including special deals or lower rates than those of general mortgages. These types of mortgages are on the increase and banks have also been seen to provide additional borrowing to landlords at lower rates where the funds are used to fund sustainable improvements. Green properties further have many benefits in terms of repayment, greater financial value, and lower running costs and 2022 sees a rise in their existence.
With the current climate of economic uncertainty associated with the pandemic many landlords are understandably hesitant to expand their portfolios however in 2022 those who do invest may gain from an improving rental market. For example, Zoopla predicts rental prices to rise by 4.5% this year. However, in contrast high chances of rising inflation and an increase in the Bank of England’s base rate which affects how much lenders pay to borrow money may lead to higher mortgage prices.
Licensing schemes can be incredibly confusing, generally mandatory, and additional licensing schemes apply to landlords who let HMOs however some councils require landlords to obtain a license prior to letting a property. ‘Which’ advise you to find out whether you need a licence to let a property in your area or not by contacting your local council who can provide you with more information.
At the start of 2022 the government introduced a new ‘model tenancy agreement’ which states that landlords in England can no longer issue blanket bans on tenants having pets, stemming from the growing demand for properties which allow pets. Now upon receiving a pet request landlords should only object in writing where there is a reason for example, a small apartment which may make having certain pets non-feasible.
In November 2021 the government announced new rules stating that carbon monoxide alarms must be fitted in social and private rented properties with fixed appliances such as gas boilers and fires installed, and they should be repaired or replaced if they are reported to the landlord as faulty. These rules are due to come into effect this year as currently carbon monoxide detectors are only required to be installed in rooms containing a solid fuel burning appliance.
The government is clamping down on short term lets after the boom of Airbnb. Recently, the Financial Times reported that short term lets have ballooned in Central London, with many residents complaining. Further north, landlords in Scotland may need a licence to let out properties for short periods of time.
Local councils are due to write up licensing schemes by October 2022, existing landlords would need licenses by April 2023 and short term lets are intended to be licensed by July 2024. Additionally, the BBC writes that fees to apply for a licence are uncapped and individual local authorities can set their own rate.
In a crowded rental market, it’s imperative to know who can rely on to maximise your return on property rental. If you choose ZFA Group, we will handle the management of your property with expertise and experience to offer you the highest quality service.
If you’re thinking of buying-to-let, chat with one of our friendly knowledgeable employees – we can help you with a range of services, from rent guarantee for landlords and property management estate agency and property investment, and commercial letting.
Contact us today if you have any questions and we’ll take care of the rest.