With 10% of landlords planning to expand their portfolios and benefit from the Chancellor’s stamp duty holiday, Brexit looming on the imminent horizon and stamp duty surcharge set for a review in April! There are a number of key dates for 2021 that Landlords should be aware of;
- 1 January 2021 – Brexit: Whilst COVID-19 cast a shadow over the property market for much of 2020, the UK left the European Union on 1st January 2021. Some of the changes Brexit brings will be welcomed by landlords, such as the end of the EU Mortgage Credit Directive; meaning this will make it easier and cheaper for you to get a mortgage as a landlord. Although we’re keeping a careful eye on interest rates!
- 29 January 2021 – The Dogs and Domestic Animals Bill: Put forward by Conservative MP, Andrew Rosindell, and supported by a number of animal welfare charities including the RSPCA, The Dogs and Domestic Animals Bill is up for its second reading. The proposed new law would allow tenants to have a pet without their landlord’s approval.
- 31 January 2021 – Online tax return: One definitely not to be missed! You’d be surprised at how many people forget about this key date, and the fact you’ll need to pay what you owe by the same date!
- 5 February 2021 – New Scottish smoke alarm law: From February 2021, all homes in Scotland must have a smoke alarm in living rooms, hallways and landings, heat alarms in kitchens, and carbon monoxide alarms near boilers or wood burners.
- 6 March 2021 – Changes to eviction legislation: Under the current ruling landlords are legally obliged to give tenants six months’ warning for all evictions! Whilst there are caveats for some circumstances, such as anti-social behaviour or more than six months’ worth of rent arrears, the current law has made eviction much harder and lengthier for landlords. However, this is set to change in March 2021.
- 1 April 2021 – Stamp duty changes: A 2% stamp duty surcharge will apply to all non-UK residents purchasing property in this country. However, if the surcharge is paid and they go on to become a UK resident, this could then be refundable.
- 1 April 2021 – Client money protection: Whilst this has been pushed back for a couple of years now, the deadline of 1st April makes it mandatory for all agents to be compliant with the client money protection legislation.
- 1 April 2021 – Deadline for electrical compliance: Any landlord without an electrical safety compliance certificate after 1st April will be breaking the law. A certificate will be required for every property on a portfolio.
- 30 June 2021 – Changes to Right to Rent: It is imperative as a landlord that you check your tenants’ immigration status if they are not UK nationals, ensuring that they are legally allowed to rent your property. With Brexit bringing in a points scoring system, landlords have been advised to continue using passports and national ID cards as an interim measure until 30 June. After that? We’ll have to wait and see!
- No fixed date – Changes to planning regulations: Whilst no fixed date has been confirmed yet, the proposed law will target developers using PDR (permitted developers rights). This is a fast-tracking process which currently allows developers to transform buildings into homes without applying for full planning permission. The new law will ensure minimum space and light requirements and ensure homes are built with enough space and natural lighting!
- No fixed date – Amendment to Renting Homes (Wales) Act 2016: Whilst there is no fixed date, the amendment will see a few amendments to the bill:
- Tenants will be given a minimum of 12 months’ protection from eviction at the start of a new tenancy – provided they are not in contravention of their tenancy agreement.
- The minimum notice period will be extended from two months to six months.
- A legal obligation for landlords to provide functioning smoke alarms and carbon monoxide detectors, and gas and electricity safety certificates to be in place for every property.
- No fixed date – Deadline for landlords to implement MTD: If you are a landlord with a turnover of more than £85,000 you should be using MTD! You must send the HMRC quarterly updates of income and expenses via your digital tax account. Automatically calculating your tax as you go, so at the end of the year, rather than completing a tax return, you just sign a declaration to say the numbers are accurate. Whilst it has been moved, the deadline is set for some time in 2021 – with an additional deadline of 2022 for all businesses to sign up, irrespective of turnover.
- No fixed date – Abolition of Section 21: As it stands, Section 21 allows landlords to evict tenants with a notice period of six months either after a fixed-term tenancy ends, or during a tenancy with no fixed end date. As part of the Government’s planned Renters’ Reform Bill, the abolition of Section 21 would essentially mean that all evictions would need to go through the courts.
- No fixed date – Potential increase in capital gains tax! Whilst Rishi Sunak made no mention of it in the November mini-budget, he did say tax increases in 2021 were now ‘inescapable’. It’s led many of us to believe that CGT may be imminent, or certainly to be adjusted later in 2021.
Insurance Updates / Exclusions to be Mindful of
The impact of the pandemic on the insurance market was not going to be without ramifications, and the insurance industry has now entered what is known as a ‘hard market’. This means insurers are imposing more restrictions in their terms, reductions in policy cover, increasing of premiums and applying much more scrutiny in respect of claims. To ensure you are fully covered in the event of a claim, please see the list below for the types of changes you must notify your insurers of:-
- Any vacant or currently closed properties
- Any changes in tenants
- Any extensions or structural works taking place or planned
- If the activities of your business have changed
- If the number of directors or employees have changed including significant wage roll changes
- Any incidents that could give rise to a claim
- Any changes to the sums insured
So there you have it! Despite the challenging circumstances, the rental market is still booming, and whilst we can’t predict the future, being prepared for all eventualities will definitely help us navigate our way through 2021.