Legislative Update – Goodbye 2018, Hello 2019

The landscape for buy-to-let landlords has seen a number of changes over the last few years and this is set to continue. In this New Year blog, we summarise the changes from last year and those we can expect to see in 2019.

2018

Last year saw major changes for those landlords who operate mainly on a room-by-room basis. HMO licensing rules changed, and thousands of properties would have been, and will be, subject to additional fees and requirements from their respective councils.

Summary of Changes

  • Mandatory HMO Licensing. The previous definition of 5 occupiers or more from 2 or more separate households on 3 or more storeys has changed. The storeys test was scrapped in October. Watch out for Selective and Additional license criteria; it’s a complex area where your property may fall into a new catchment area overnight.
  • Minimum room sizes for sleeping rooms in mandatory licensing. Mandatory HMO licensing comes with these new room size requirements:
    • 6.51m2 for 1 person over 10 years of age
    • 10.22m2 for 2 persons over 10 years of age
    • 4.64m2 for 1 child under the age of 10
  • Minimum Energy Performance Standards (MEPS). New or renewing tenancies must have an EPC rating of E or above.
  • How to Rent Guide. This guide was updated three times in 2018, the last time in July. If you made a mistake and sent the wrong version, or didn’t send a guide at all, don’t worry. Simply send any tenants who moved in after July the latest copy.
  • Section 21 notices. A prescribed Form 6A was introduced and became effective immediately for all tenancies. New rules say it cannot be issued in the first 4 months of the original assured shorthold tenancy and is only valid for 6 months from the date it is served.
  • Gas Safety Certificate renewal made easier. Some good news here – you can renew up to 2 months earlier and no longer on the date it expires. So, if your CP12 expires on 1 April 2019, you could renew it from 1 Feb 2019, with it expiring not on 1 Feb 2020 but on 1 April 2020. You will need to keep an accurate record of this as a gas engineer may not give you a new date beyond 1 year. A good explanation and discussion of this change can be found here.
  • Data Protection (GDPR). Commitment to data protection of anyone in your database, i.e. tenants. For compliance, you will need to register with the ICO and prepare a privacy notice.

2019

The professionalisation of the private residential sector will continue. There are some major changes heading our way as agents but there will also be increased protection for tenants.

Summary of Changes

  • Homes (Fitness for Human Habitation) Act. The latest legislation was passed on 20 December 2018 and created an obligation on the part of the landlord to ensure a property is fit for habitation at the commencement of the tenancy and that it remains so throughout. It applies to all areas of a building “in which the landlord has an interest”, including communal areas of leasehold flats and HMOs.
  • Tenant Fees bill. A proposed ban on upfront letting fees and capping tenancy deposits to 5 weeks’ rent for rent less than £50,000 per year. The latest government announcement regarding this can be found here.
  • Client Money Protection (CMP). Mandatory for all agents.
  • Mandatory electrical checks. Landlords are already responsible for electrical safety, but according to the most recent data, tenants in the privately rented sector face a higher risk of electrical shock and fires caused by electrical faults in their homes compared to social housing tenants. Tougher standards and penalties of up to £30,000 are expected to come into force.
  • Section 24 marches on. Landlords cannot deduct all their finance costs from their property income to arrive at their profit figure. From 2019 to 2020, you can claim a 25% finance costs deduction. To find out more, we recommend you read the explanation of Section 24 found here at Which?.

If you are a client of ours, or are with a reputable estate agent, the coming changes should not cause you any concern. However, if you are a DIY /self-managing landlord, it is important, now more than ever, to stay up to date.

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Disclaimer: Marybow Property takes all reasonable care to ensure that the information contained on this website is accurate. However, we cannot guarantee its accuracy or completeness of content. Our website, including the blogs, are not legal or financial advice and should not be construed as such.  We reserve the right to change the information on this website at any time.