|We are writing during our third national lockdown with a hope that this mail finds you all safe and well. |
There are a number of items relevant to you as a landlord that have been in the news, and some that haven’t, so as part of our client base we would like to share them with you.
At the date of writing, the housing market remains open for business under instruction from the Government, and therefore we as much as we can be, business as “normal” (whatever normal looks like during a global pandemic. Obviously, all relevant precautions are being taken, the safety of our staff and clients is at the forefront of our minds at all times.
Here at SWR we continue to work through the pandemic, with several team members working from the office and the rest working from home. We thank you all for your patience during this time; balancing family life/home schooling, the ongoing logistical issues surrounding the pandemic and the needs of our clients is no mean feat but thankfully we have a good time and we are all working hard to ensure it is as much as possible “business as usual”.
Mortgage Payment Holidays
The mortgage payment holiday has been extended to 31st March 2021, if you have not used this facility yet you will be entitled to a six month holiday.
Changes to the eviction process
Late last year, in response to the pandemic, we saw a change to the notice periods under section 21 of the Housing Act (from 2 months to 6 months’): a change which is in place until at least 31st March 2021.
Following this, we then saw the introduction of a straight ban on enforcing a possession order (provided by the court) until 11th January 2021, and this was subsequently extended to 21st February 2021.
There is every expectation that it will be further extended and we will keep you updated on this. This ban applies in all but the most serious cases. These rules are known as the Public Health (Coronavirus) (Protection from Eviction and Taking Control of Goods) (England) Regulations 2020 – just if you feel in the mood for a google.
Notices can still be served during this time; they just cannot be enforced.
There are a couple of exemptions, the ones that are most relatable are where there are grounds of anti-social behaviour and/or domestic violence, or if there are substantial rent arrears. Initially “substantial” meant nine months’ rent, this has thankfully been reduced under the newest legislation change to six months’, and does take into account arrears accrued prior to COVID-19.
There is also nothing stopping you going to court and gaining possession order, you just can’t enforce it…. However, be aware there is now a lengthy backlog at the courts. If you need to ensure your tenant leaves the property on time, you may have to think outside the box for at least the next 12-18 months.
The government have also mentioned the introduction of a new “mediation pilot” in February. We will share more information when we have it.
A piece of legislation known as the Dogs and Domestic Animals (Accomodation and Protection) Bill is slowly making its way through parliament. If approved, this would mean tenants would have a right to have a pet without to approval of their landlord.
We will keep you updated as progress occurs.
This may be a good law for tenants, but we can see this may be the final “nail in the coffin” for a number of landlords.
For our Block Management clients, an exciting development in leasehold law has been announced, with the housing secretary set to overhaul the whole leasehold system.
Currently, leaseholders are able to extend their leases by a 90-year period, this is proposed to change to 990 years.
The government is also looking at the option of Commonhold, an idea that was originally introduced in 2002 but never really “took off” as well as restrictions in how ground rent is able to be increased by freeholders.
We will be watching this legislation with interest.
Green Homes Grant
The “green homes grant” was announced by the government on 30th September 2020 and it is said to the biggest proposed upgrade to the nation’s buildings in a generation.
If you are eligible, you will be able to apply for a voucher worth up to £5000 per rental property to help with the cost of improving the energy efficiency of your rental property and you have until 31st March 2021 to apply.
The grant is non-repayable, and includes labour, materials and VAT costs – of up to 2/3rds of the total renovation costs.
Improvements are split into “primary” and “secondary” measures.
Primary includes works such as insulation to walls and flooring, secondary includes works to windows and doors.
You must use the grant for one primary measure before you are able to use it for any secondary measures.
The full list of measures can be found here: https://www.gov.uk/guidance/apply-for-the-green-homes-grant-scheme#what-the-voucher-can-be-used-for
You can apply here: https://www.gov.uk/apply-green-homes-grant
You can find registered tradespeople here: https://www.trustmark.org.uk/
A gentle reminder that your tax return is normally due by 31st January 2021 but has just been extended to 28th February 2021. Don’t miss the date!
As you will be aware, the UK has now left the European Union. Whatever your opinion on “Brexit”, it will undoubtably have an impact on the UK housing market and subsequently on you as a landlord.
Since the beginning of this year we have seen an unprecedented demand for property so at this point the impact does not look to have been negative, but we are watching the market closely.
It is worth noting that the process of checking a tenants’ Right to Rent prior to the start of a tenancy has changed substantially over the past 12 months.
A new code of practice was released on 2nd November 2020 under the new legislation The Immigration (Residential Accomodation) (Prescribed Requirements and Codes of Practice) (Amendments) Order 2020, which brought in the following changes:
1. A streamline to the process for B5JSSK nationals (USA, Canada, Australia, New Zealand, Japan, Signapore and South Korea).
2. The introduction of an online right to rent process
3. Changes to time limits on checking Right to Rents prior to a tenancy start
At this point, EEA nationals are still recognised as having a right to rent in the UK until 30th June 2021. You can sign up for regular updates here: https://www.gov.uk/check-tenant-right-to-rent-documents or we will update you as more information becomes available.
Electrical Safety Standards
The date by which your property requires a satisfactory 5-year fixed wire test (Domestic Electrical Installation Condition Report) is quickly approaching.
As of 1st April 2021, any tenanted property in England must have a certificate in place, and this should have been provided to the tenants.
There is a common misconception that this will only apply to “new lets” after this time: it will apply to ALL tenanted properties.
The government will be introducing a new debt protection scheme on the 4th May 2021 known as “Breathing Space”.
There are two types of breathing space.
Under a normal “breathing space”, a landlord will not be able to pursue rental arrears for 60 days (this includes any contact regarding the debt or enforcement action).
The second type is a “mental health crisis breathing space”, which is available for those people during a mental health crisis and will remain in place until the end of treatment, plus 30 days.
If you would like to read this legislation, have a look at The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium (England and Wales) Regulations 2020.
A breathing space can only be initiated by a debt advice provider registered with the Financial Conduct Authority or a local authority.
This will likely be a worrying development for most landlords but we of course will keep you updated as we know more. The introduction of the scheme hammers home the important of thorough pre-tenancy referencing checks and a risk based approach to offering contracts to tenants going forwards.
We hope you have found this update useful. Please do not hesitate to get in touch with us if you have any questions or comments!