Landlords haven’t had things easy recently and 2019 has a few more changes in store for those who rent out property to be aware of. In this week’s post, we’ll take a look at some of the most important and what they mean for landlords and their tenants.
Now it has gained royal assent, the ban on tenant fee charges is set from June 1st. Here’s what this new piece of legislation means for landlords (and letting agents):
Landlords and letting agents will no longer be able to charge for anything other than:
– Deposits (including holding deposits)
– Changes to the existing contract, or the termination of it, that have been requested by the tenant
– Council tax, utilities, and communications services
– Key replacement costs (charge for new keys and petrol, but not time lost)
– Any other default of contract
Compulsory CMP (Client Money Protection)
As of April this year (2019), all letting agents will need to have this form of insurance in place. This is good news for landlords, as your rental income will be protected, and it is something that we welcome here at David Astburys.
In fact, we’ve covered our clients with this protection long before it became mandatory, but many other agents have glossed over its necessity. If you are currently dealing with a letting agent who doesn’t have Client Money Protection (CMP) in place, be warned – they may struggle to get clearance before the April deadline, which could see them go out of business.
This puts your rent and deposits at risk, so it’s well worth checking out as soon as possible.
Mortgage interest tax relief
This may seem like old news, but it’s an ongoing saga that continues to affect landlords across the country. Like the CMP above, the next phase of the withdrawal of mortgage interest as an allowable expense will occur in April – on the 6th to be precise, the start of the new tax year.
As this year sees the third stage of the withdrawal, landlords will only be able to claim 25% of finance costs, with the remaining 75% restricted to the basic rate of taxation.
Landlord’s Minimum Energy Efficiency Standards broaden
Another change that has already been well-documented, but continues to affect landlords with its staggered introduction, is the tightening of the Minimum Energy Efficiency Standards (MEES) those who own rental properties have to meet.
Where this differs to the withdrawal of mortgage interest as an allowable expense is that there are no actual changes happening in 2019. Naturally this begs the question, why are we discussing it in a post titled ‘7 Changes Landlords Need To Know About In 2019’ then?
Well, last year saw the introduction of MEES for new lets and tenancy renewals, but April next year (2020) sees the regulation extended to existing tenancies, too. This means that if your property is currently rated at ‘F’ or ‘G’, it will no longer be rentable from the 1st of April, 2020.
With that in mind, landlords should act now to ensure their properties are up to scratch and compliant for 2020. Papering over the cracks isn’t advised either, as current word is that MEES will rise again in 2022, making a ‘D’ rating the new minimum.
Obligatory electrical safety checks
It’s looking increasingly likely that an obligatory 5-year electrical safety check will be put in place sometime soon, so this is another area landlords will need to be aware of as we move further into 2019.
While nothing concrete is in place yet, those who have not had a full electrical check carried out on their property in the last five years should definitely consider hiring a decent electrician to do so sooner rather than later.
Homes (Fitness for Human Habitation) Act
The Homes Act 2018, as it is now called, will come into force on March 20th. This will likely only affect a very small number of landlords, as councils and local authorities can already take action on substandard properties, but it’s still worth pointing out.
The new Bill means tenants will be able to take legal action against their landlord themselves, should they fail to maintain their property to what is broadly described as a ‘good condition’, without having to rely on their local authority getting involved.
Rogue landlord database goes public
Although London tenants have been able to access the capital’s Rogue Landlord and Agent Checker since December 2017, the rest of the country has been stuck with a system that has been widely regarded as useless as the general public were unable to access it. This looks set to change at some point this year, with public access soon to become available.
That’s it. Seven changes for landlords to be mindful of in 2019. If you have any property related questions or queries, get in touch. We’re always happy to help.
Please call asap to find out more….020 3000 6787
Speak to George Sifonios or Yianni Aresti for more information.