The beginning of another year frequently implies new rules and lawmaking for landlords to get to holds with, and 2022 is no different. From the proposed Renters Reform Bill and energy ability to changes to limitations on pets and carbon monoxide alarms, this manual describes everything landlords need to know in 2022.
The Renters Reform Bill
The Renters Reform Bill has been marked as the most significant change to the private rented sector since the 1990s. Initially, the Bill was due to be heard in Parliament in the autumn of 2021, but this was postponed due to the Covid-19 pandemic.
Nevertheless, the Bill is likely to pick pace in 2022 as the talk continues. There are three primary elements to the proposed Bill, which was established as part of the Queen’s Speech in December 2019. Having a continuity plan will help you keep track of certain bill types.
The three primary elements of the Bill are:
The End of No-Fault Expulsions
Presently, landlords can retrieve guardianship of their rental properties at the end of a fixed-term residency or during a periodic residence by allocating residents with a section 21 notice. This gives the resident a period of not shorter than two months that the landlord needs guardianship of the property.
Under the Renters Reform Bill, nevertheless, ‘no-fault’ expulsions and section 21 of the Housing Act 1988 would be discarded, indicating you would need to retrieve guardianship of your property via the court procedure or a professional ‘tribunal’. As part of the submitted extract 21 reforms, the Bill contains plans to also improve the section 8 eviction process, improving landlords’ grounds for possession and enhancing the court procedure.
Lifetime Warranty
The Bill submits that residents should be capable to communicate their security assurance from property to property, indicating they don’t have to save for a new warranty when moving rental homes.
The Landlord Database
The government’s database of rogue landlords would be made unrestricted to residents, agents, landlords and professional bodies under the Bill. Carefulness is also being offered for a landlord register or a necessity for landlords to register with a redress system.
The Leasehold Reform Bill
The Leasehold Reform Bill is presently creating its way via parliament and is likely to become law in 2022. Under the Bill, backdrop rents for new leasehold properties would only be capable to be charged and expanded at a rate of ‘one peppercorn’.
The regulations would also involve existing leasehold properties where the lease is being developed and the freeholder has held the facility for at least two years. ‘Peppercorn’ ground rent is virtually zero, dating from the 16th or 17th century when although the spice was of high value, one single peppercorn was practically useless.
Mortgage Interest Tax Credits
The intro of a 20% tax credit to shield landlords’ mortgage interest has been phased in since 2017.
The 2020-21 tax year was the first where the recognition fully returned being able to offset mortgage interest contrary to income tax, and tax returns for that year must be pointed by the end of January 2022. Obtaining plan writers and a continuity plan will definitely help, in terms of keeping your tax organised and up to date on a regular basis.
Further Interest Rate Drifts?
After nearly two years of historic low-interest rates, the Bank of England boosted its ground interest rate from 0.1% to 0.25% in December 2021. When the bank rate rises, mortgage rates typically follow, so if your buy-to-let mortgage agreement is due to end this year, now is the time to start glimpsing for a new deal.
Although nobody can anticipate what the Bank will do, most points demonstrate further rate drifts will come this year, possibly to 0.75% by the summer.
Tax Modifications for Landlords in 2022
After so many tax-related modifications in prior years, 2022 is looking like a year when landlords will be able to unwind a little more when it comes to tax.
The personal tax allowance of £12,570 is anticipated to remain in place until 2026, while the capital gains tax allowance of £12,300 is also bound to stay fixed.
Making Tax Digital
VAT-registered landlords with a rental turnover of more than £85,000 will need to swap to the Making Tax Digital (MTD) system this year.
The system means you would send four quarterly offers on income and fees rather than an annual tax return and then sign a statement to verify their numbers. If your rental property business is VAT-registered and your turnover surpasses £85,000 per year, you’ll need to utilise the MTD system for your first tax return after April 2022. If you’re a self-employed landlord and your annual income surpasses £10,000, you’ll need to obey MTD rules from April 2024. If you’re a plan writer or want to obtain plan writers, then this section is definitely one to think about planning, as it will keep you organised for the foreseeable future.
Pet-Friendly Occupancies
The government has already taken steps to encourage more landlords to abide by pets by amending their model occupancy deal. The deal now offers approval for pets as a defaulting and if you wish to oppose, you’ll need to do so in writing, supplying a useful reason, within 28 days of the resident’s plea. Plan writers.
Of course, this only involves landlords who utilise the government’s model deal, but there could be further modifications to pets in rentals coming during 2022 through the Dogs and Domestic Animals Accommodation Protection Bill. This Bill is anticipated to have its second reading in parliament early in 2022 and could present further modifications to rules around pets in rental properties if it evolves into law.
Certificates of Custody
The Bill notes that residents who wish to keep a pet in their rental property will need to supply their landlord with a certificate of trustworthy animal custody.
The certificates will be administered by registered vets, who will also inspect that:
- The pet is microchipped if a cat or a dog
- The pet has been de-wormed and deflead
- The pet has had all demanded vaccinations
- The pet can answer to orders from its owner
- All pet attributes would also be stored on a database.
Pet Insurance
Under the Tenant Fees Act 2019, landlords or their letting agents are incapable to charge further payments to tenants, other than holding guarantees, warranties and rent expenses. Under the Bill, regardless, landlords would be capable to delegate tenants a pet insurance expense if they wish to maintain an animal.
No Automated Right to Keep a Pet
Residents don’t have an automated right to maintain a pet under the requests in the Bill.
But landlords would only be capable to reject submissions from tenants in control of a trustworthy guardianship certificate if the pet was considered a risk or annoyance to other people.
Landlord Exemption
Under the Bill, landlords would be capable to apply for an exemption certificate if:
- They, or another tenant, has a religious explanation for not experiencing domestic animals
- They, or another tenant, has a medical explanation for not experiencing domestic animals
- Their property is considered inappropriate for domestic animals
Rules on Carbon Monoxide Alarms
Under existing rules, your rental property must have a carbon monoxide alarm provided in every room where there is a solid fuel-burning device. Nevertheless, under suggestions disclosed at the end of 2021, the government is scrutinising to expand those rules to contain any room used as living housing where there is a gas boiler or fire.
Meanwhile, revamped rules in Scotland mean that every home north of the border must have connected fire alarms by February 2022, along with rental properties.
Conclusion
There is a lot to think about when it comes to buying your own property for the first time, but hopefully, this guide will help you with your budget and how much you would need to save if you were to find your desired property. B&F Services can help with anything to do with what information you need to pitch to landlords and guide you along when you’re ready to purchase your own property.
