This post was last updated on September 12th, 2022 at 04:32 pm

Most landlords aren’t asking for much. They want a professional service, from competent people, for a reasonable price. Delivering what’s promised is the least a person should expect from any service they pay for – so why are so many landlords being let down by their agents?

The average UK tenancy is just over four years. This is a long time – and could be even longer if you have a good tenant in place – so choosing the right agent is very important.

Have you felt frustrated with your letting agency recently? Or heard a friend of yours moaning about their agent? When you think about it, how often do you hear anyone say good things about a letting or estate agent? Not often.

Perhaps you feel like you can rarely get hold of anyone. Maybe the agency never updates you or knows what’s happening. Or you’re not even sure what you’re actually paying for. You’re not alone.

Signed, sealed…undelivered

Many landlords I speak with every day are fed up with their agents. They’re tired of talking to answer phones, being left in the dark, and having to deal with people who “ain’t got a bloody clue” (landlord’s words, not mine) all whilst being charged an arm and leg.

Of course, not all agents are like this. There are some fantastic agencies out there, but if they’re not providing the service they initially sold to you – it’s time to look elsewhere.

You may be thinking “That’s easy to say but I can’t leave until my contract is finished” – or maybe your agency terms are so complicated you wouldn’t even know where to begin.

‘Breaking up’ with your agency may seem difficult because the endless pages of terms are a garbled jungle of jargon, but the key is fully understanding your legal position and your rights – so you know what options are available to you.

Breaking up with your agent

I know it might be tempting to screw your terms of business into a ball and let your dog play with them until they are a shredded, slobbery mess. Then you can simply tell your agent “my dog has eaten the terms”, freeing you from your contract. Unfortunately, this won’t work, and is clearly not the best way to deal with a contract or service dispute.

A far better approach is to look through your terms and find the termination or cancellation contract clause.

There can be multiple elements of the contract that require different notices, and these can differ if you’re serving notice for the ‘fully managed’ or ‘introduction/let only’ part of the contract. Legal wording can make this seem complicated, so take your time and ensure you understand what you’ve agreed to.

You may find something along the lines of:

Our appointment will continue until the end of the fixed-term Tenancy Agreement

This is a simple one and means you’re bound to pay the letting agency until the initial fixed term AST expires, which is usually six or twelve months. To terminate your contract, you must give the agency the required notice, which will be outlined in the terms too.

Regarding ending your contract early, you may find something like:

If, after the 14-day cancellation period has expired, you let us know that you want to end the contract, and this is before we have received a sum equivalent to £X in fees, we will charge you £X.

This is another easy-to-understand clause, and it’s written in layman’s terms. It just means you need to pay a certain amount of money to your agency if you wish to end their service.

Another similar one is:

If, after the 14-day cancellation period has expired, you let us know that you want to end the contract, and this is before we have received a sum equivalent to four months’ rent + VAT in fees, we will charge you two months’ rent + VAT.

In this instance, if your rent is £1,000, you’ll need to have paid £4,800 in fees before you can leave without paying anything else. If not, you still owe 2 months’ rent + VAT.

So, if your letting fee is 10% + VAT (12%), you’ll be paying £120 monthly. It would take 40 months / 3.3 years before you have paid equivalent to £4,800 in letting fees and therefore before you can serve notice without having to pay any further fees.

At first I was afraid (but mostly confused)

Unfortunately, not all terms are as simple and easy to understand. Many landlords are stuck with their agents for years because the terms are so misleading or haven’t been explained properly.

Here’s another example if you’re getting a fully managed service with your agency:

Either party may end this agreement by serving not less than 3 months’ written notice on the other, provided that such notice does not expire less than 6 months after commencement of the Services.

The agency has outlined that after three months, you can serve three months’ notice, so there is a full six months of service. Simple, right? Not quite.

The terms then say:

For the avoidance of doubt, in the event that you terminate the management services under this clause, you shall still be liable to pay Fees in respect of lettings services in accordance with these Terms.

If you wanted to end your contract in this circumstance, you’d have to look through the terms to find out what “lettings services” you have agreed to. A lot of landlords I speak to are actually unsure what service they’re paying for – especially if they’ve been with their agency for several years.

In some instances, although the landlord has been paying a ‘management fee’ of X% each month, if they want to leave, they’re now liable to pay an additional percentage ‘letting service’ – this could refer to the introduction or tenant find service at the start of the tenancy. In this case, it was equivalent to 13.2% of the annual rent.

Find out how much you could save in lettings fees with our free Lettings Calculator.

My tenancy will go on…and on

You must also ensure you won’t be liable for further costs should the tenant renew the term.

The clause could look something like this:

In the event that the tenant renews, extends, or enters into a new agreement for which rental income is received, a renewal commission of X% of the rent received becomes payable. You will not be liable for Renewal Commissions relating to any period beyond the end of the second year from the expiry of the Initial Agreement.

You should also look out for clauses when your service is ‘introduction only’, also known as a ‘find a tenant’ – meaning the agent doesn’t manage the property or collect the rent. Some terms require a renewal fee every year, even if the agent isn’t managing the property – so watch out for this.

Here’s an example:

The tenancy management service and the fees payable continue for the tenants we have introduced throughout the entire original period of the tenancy agreement and any renewal of it or for its extension by any form of periodic tenancy (this, therefore, includes but is not limited to any period when tenant we have introduced remains in the property).

In this example, it’s made clear that the only way you’re ending your contract, or moving letting agency, is by saying goodbye to your tenants.

If you have really good tenants, the last thing you’ll want to do is ask them to leave. Even if you’re frustrated with the agency’s lack of responsiveness or sneaky hidden costs – a good tenant who pays their rent on time and respects your property may outweigh your frustrations.

Should I stay or should I go now?

Sometimes, the cancellation terms and notice periods are vague or not included in the terms at all.  It may say, “if you wish to serve notice, please email the letting agency” to which you could be met with a whopping fee, conveniently omitted from your contract.

Luckily for you, any ambiguity in a contract goes in favour of the person who did not write it. As such, you can challenge it.

When you’re faced with some of these extortionate termination fees, you may think ‘is it even worth changing agencies?’ If this is the case, start by weighing-up the pros and cons.

If the agency has not breached the contract in any way, and you’re just looking to increase your revenue, it might be worth calculating your costs over the next two years. If you stand to save a substantial amount, even after paying the terminations costs (high rental value and a management fee of 12% + VAT (14.4%) of the rent, for example), it might make financial sense for you to switch now.

Always double-check what you’re getting for your money with the next agency and take note of the features included within their plan – every agency is different. Negotiate. If it’s purely down to the fee, and the agency you’re with is professional, responsive, transfers the rent in a timely manner, and you’re impressed with their service, you could look at negotiating the fee with them instead of moving away. The grass may not always be greener, so give it a try.

Already torn, but not quite out of faith

Now let’s say you are irritated with your agency because they don’t seem to care about your property, never do what they say they will or haven’t delivered on what was promised.

This is more serious than just trying to save money. Fortunately, contracts are legally-binding agreements, so when either party fails to meet their obligations, the contract can come to an end. There are different breaches to understand and different consequences too.

Material breach

A material breach occurs when one party receives significantly less benefit or a significantly different result than what was specified in a contract. Material breaches can include a failure to perform the obligations laid out within a contract or a failure to perform contracted obligations on time.

You should look to retain evidence if this is the route you wish to take.

Breach of service

A breach of service is like the contract stating two mid-term inspections a year will happen, but you only get one – or none at all. You need to give notice of the breach and they would normally have 30 days to rectify it (depending on the terms of the contract). If nothing changes, then you can serve notice of a material breach.

The courts have ruled that a series of minor breaches of a contract could constitute a material breach. An agency has a duty of care and should always be delivering what they promise in the agreement. You agree to pay the fees every month, and they agree to deliver a service. Simple.

You may find that you have quite a few ‘smaller issues’ going on, but nothing that mounts to a material breach. In this instance, you should complain to the agency and detail exactly what the issues are. You could say: “I have been contracted with you for X time, and I can count X amount of service issues. This now breaches your duty of care and contractual duties.”

Sorry seems to be the hardest word

Sometimes you may feel that the agency has breached the contract, and they disagree. They may say you’re bound to their termination fee, and you want to dispute it. The good news is you can.

Firstly, check if your agency is a member of The Property Ombudsman. If so, there is a strict code of conduct they should be following, and if they’re not, you can make a complaint. Sometimes, just raising this to the agency will ring alarm bells, and the agency may start to open up negotiations with you instead of letting it get to complaint level. Or they could start performing better. It’s a win win.

Some landlords want to cut and run if the agency doesn’t agree with them. If this happens, you might end up at the small claims court, which really isn’t as scary as it sounds. You will build a case against the agency, and the agency will build a case against you. You’ll pay a fee between £45 – £200 (not recoverable, even if you win) and you’ll sit in front of a judge who will decide if you’re liable to pay or if the letting agency is in the wrong. For more information about small claims court, please click here.

Some landlords are nervous they will have a CCJ if they are taken to small claims court.  But this would only be the case if the judge finds in favour of the agency, orders that you pay what is owed, and then you fail to comply with that Court Order. If you lose but pay what the court orders within one month of the judgement, then a CCJ will not be registered against you. However, if you lose the case, you may be ordered to pay the court fees incurred by the claimant.

Most letting agencies won’t have the time or inclination to take you to court, so they may just chase you a couple of times then you’re in the clear. It’s also bad business to spend too much time and energy on one property or landlord, especially when they want to leave due to bad management. The agency will typically want to minimise damage and avoid official complaints, poor reviews, or negative public comments. I’ve seen agencies get threatened with bad reviews, due to lack of care, and allow landlords to break free from their agreement.

However, be careful as they may also want to make an example of you. For the avoidance of doubt, if you choose to serve notice and end the contract, you could be in breach of contract – consequences.

Time to say goodbye

My biggest suggestion is always to read your terms of business before signing them. This blog is not legal advice and is simply our shared experience and guidance. 

If you’re unsure of your position or are struggling to understand your terms of business, we would recommend you speak to a specialist solicitor. They can review your contract and clauses, determine if your agency is in breach of contract, discuss options with you, and help you to serve notice. We would recommend Stephensons Solicitors LLP, who can be contacted on 0333 999 7155 or by emailing commercialenquiries@stephensons.co.uk. More details of their services can be found here.

The Smoke and Carbon Monoxide Alarm (England) Regulations are changing. The regulations, originally enforced in 2015, will be amended from 1 October 2022 and apply to both private and social rental properties.

• What are the new rules for smoke and carbon monoxide alarms?
• What type of smoke and carbon monoxide alarm do I need?
• Where should I put my smoke and carbon monoxide alarms?
• What is a fixed fuel appliance?
• What properties and tenancies fall under the regulations?
• What are the rules for smoke and carbon monoxide alarms in Wales?
• Who’s responsible for smoke and carbon monoxide alarms?
• What if I don’t have a smoke or carbon monoxide alarm?
• How can landlords show they are compliant?
• What other safety responsibilities do landlords have?

What are the new rules for smoke and carbon monoxide alarms?

From 1 October, both private and social rentals must have at least one working smoke alarm on each storey where there is a room used as living accommodation. This has been a legal requirement for private rental properties since the first regulations in 2015, but will now apply to social housing as well.

There must be a carbon monoxide alarm in any room used as living accommodation which contains a fixed combustion appliance. This is any appliance that uses fuel to generate heat, but excludes gas cookers.

Perhaps the biggest change for landlords is that they will be responsible for repairing or replacing any smoke and carbon monoxide alarms once they are informed by their tenant. Before the amended regulations, landlords are currently responsible for installing and testing the alarm at the start of the tenancy – but it is the tenant’s default responsibility to repair or replace it during the tenancy.

What type of alarm is required for the smoke and carbon monoxide rules?

There is no specific alarm type stipulated in the regulations for either smoke or carbon monoxide alarms.

It’s up to the landlord to decide based on the needs of their building and tenants. Mains powered (hard wired) or battery powered are perfectly fine, as long as they are compliant with British Standards BS 5839-6 (smoke alarms) and British Standards BS 50291 (carbon monoxide alarms).

Where battery-powered alarms are selected, alarms with ‘sealed for life’ batteries rather than alarms with replaceable batteries are the better option. Heat detectors are not considered a replacement for smoke alarms.

Landlords should consider their tenant’s individual circumstances when choosing the best alarm. For example, if residents are deaf or hard of hearing, alarms which alert by vibration or flashing lights (instead of sound) would be more suitable.

Where should smoke and carbon monoxide alarms be located?

At least one smoke alarm should be installed on every storey which is used as living accommodation. The regulations do not stipulate where exactly they should be fitted or placed, but they are generally fixed to the ceiling in a circulation space, i.e. a hall or a landing.

There is no stipulation for carbon monoxide alarms other than ensuring they are installed in every room which is used as living accommodation containing a fixed combustion appliance (excluding gas cookers).

Carbon monoxide alarms should be positioned at head height, either on a wall or shelf, approximately 1-3 metres away from a potential source of carbon monoxide. Individual manufacturer’s instructions should be followed for both smoke and carbon monoxide alarms.

What is a fixed combustion appliance?

Carbon monoxide alarms must be installed in any room containing any fixed combustion appliance, except gas cookers. This means a fixed apparatus where fuel of any type is burned to generate heat.

These appliances are typically powered by gas, oil, coal, wood, etc. such as gas or oil boilers, or log-burning stoves. A non-functioning decorative fireplace would not be considered a fixed combustion appliance.

What tenancies do the regulations apply to?

The regulations apply to tenancies for all homes rented by private landlords or registered providers of social housing in England. The following tenancies are excluded:

• shared accommodation with a landlord or landlord’s family
• long leases
• student halls of residence
• hotels and refuges
• care homes
• hospitals and hospices
• low-cost ownership homes
• other accommodation relating to health care provision

If the occupier shares the accommodation with the private landlord or the private landlord’s family, these regulations will not apply. The regulations do not apply to owner-occupiers or owner-occupiers living in shared-ownership homes.

What are the smoke and carbon monoxide alarm rules in Wales?

These regulations do not apply to Welsh properties, but the Renting Homes (Wales) Act 2016 has similar provisions regarding carbon monoxide alarms.

To ensure all properties are fit for human habitation, a carbon monoxide alarm must be placed in every room with a solid fuel-burning appliance and a smoke alarm is required on every storey. This law will come into place on 1 December 2022. Read more about the Renting Homes (Wales) Act here.

Smoke and carbon monoxide alarms: what are landlords responsible for?

Landlords are responsible for ensuring the correct alarms are installed and in working order. Landlords must test the alarm on the day the tenancy begins and repair or replace any faulty alarms reported by the tenant during the tenancy.

Tenants are responsible for reporting issues with smoke or carbon monoxide alarms, but it is wise for landlords to check them during mid-term inspections or other routine visits. For battery-powered alarms, tenants should replace the batteries themselves. If the alarm still doesn’t work, or the tenant is unable to replace the batteries, they should report this to the landlord.

How are the alarm regulations enforced?

The regulations will be enforced by local housing authorities. If landlords are made aware that they are not compliant, they should take action to install or repair the alarms as soon as possible.

The local housing authority may serve a remedial notice to landlords found in breach of the regulations. Failure to comply with each remedial notice can lead to a fine of up to £5,000 per breach, rather than per landlord or property.

How can landlords prove compliance?

Landlords should keep a record of when alarms are installed, tested and repaired. If queried, the local housing authority will decide whether the evidence proves that the landlord met the requirements.

Carrying out an inventory on the first day of the tenancy is a good way to keep a record. The landlord – or the inventory clerk – can note that alarms have been tested and are working, then the tenant can sign the inventory to confirm it’s correct.

What other safety responsibilities do landlords have?

Ensuring the rental property has a smoke and carbon monoxide alarm is just a small part of a landlord’s safety responsibilities. They must also ensure their property has the following:

• Annual gas safety check and record
• Electrical check and EICR every five years
• Valid energy performance certificate

What do you think?

What do you think about the amended smoke and carbon monoxide alarm regulations? Share your thoughts in the comments below.

When you’re investing in property, you want to spend your money wisely and get a worthwhile return. The property market is not for the faint-hearted, especially when it comes to a buy to let. If you are planning on renting out your home, you may be torn between a holiday let or the long-term residential route. There are a number of factors to consider in this decision, and this article may help you choose.

• The difference between short-term and long-term rentals
• Airbnb vs rentals: pros and cons
• Advantages of a long-term let
• Airbnb vs Renting: Which should you choose?

What’s the difference between short-term and long-term rentals?

Short-term rentals are typically based on tourism, where people rent the property for a short period of time, such as a couple of days, weeks or even three months. Platforms like Airbnb charge money to property owners in return for them listing their property and marketing it to users around the world.

Long-term rentals on the other hand are let for at least six months or more. Landlords typically advertise on Rightmove to find long-term tenants, sign a legal tenancy agreement and collect rent every month.

Airbnb vs renting: pros and cons

Holiday lets have the potential to be extremely lucrative since they command a far higher rate than a long-term rental. In fact, some properties can make as much in one week than the property could make in a month from a long-term lease, especially if your property is in a popular tourist destination. However, holiday lets rely heavily on the tourist seasons.

There’s high demand for short-term lets, not only for holidaymakers but also for digital nomads and people who want to enjoy a more relaxed experience on a business trip. Since your tenants are constantly changing, there’s the opportunity to meet new people all the time. It certainly delivers some flexibility, as tenants can extend their stay easily, there’s no requirement to serve notice, and you can use it for yourself, friends or family when you like.

Void periods

However, this flexibility also comes with risky void periods. As the pandemic has shown, unforeseen events could leave you without an income for long periods, particularly if your property relies on seasonal tourism. If you’re relying on your rental as our primary source of income, this may be a risky option.

Cancellations can be an issue too. If your next guests cancel last minute, it’s unlikely someone else will book in with such short notice, leaving you out of pocket.

Hosting and maintenance

With many guests passing through every week, your property will also undergo more wear and tear. This may increase your maintenance costs, and if you’re managing the property yourself, it can be a time-consuming task to keep the property clean and well-maintained.

As an Airbnb host, you’ll have to spend time messaging your guests, sharing the property location details, and handing over the keys. If they have queries, you need to be available to answer them quickly too. Whilst Airbnb and other platforms do does provide some protection, any claims or losses are at the discretion of Airbnb (or whoever you’re renting with) which may not go in your favour. 

Airbnb vs renting: Advantages of a long-term let

A long-term rental generally required less involvement than a holiday let. There’s a bit more to do before they move in, but once they’re in they could stay for a few years at least.

Once you have found a tenant and sorted the admin (referencing, agreements, deposit security) you’ll only need to visit the property for routine inspections or maintenance. Most landlords carry out an inventory at the start of the property, then a mid-term check about six months in to keep an eye on things.

Your tenant may contact you regarding maintenance and or emergencies, but it’s up to you how you’d like to handle it. A lot of landlords like to take care of maintenance themselves, particularly if they live close by and know people in the trade, or are handy themselves. Others prefer to hand the keys to an agent who sorts maintenance issues on their behalf – but this is usually more costly than the former.

Find the right tenant

One of the biggest advantages of a long-term rental over a holiday let is that you have the ability to screen your tenants and select the right people to rent your home. At viewings, you’ll be able to meet your tenants and get a feel as to whether they’re the right fit for your property.

Tenant referencing provides credit and employment checks, as well as a reference from their previous landlord, giving you the peace of mind that your tenant has a good renting history and can afford the rent.

Legal responsibilities

The biggest difference between short-term and long-term lets are the legal responsibilities. Long-term lets have a lot more rules to follow, including safety inspections, Right to Rent checks other regulations specific to private renting.

You’ll need a buy-to-let mortgage or consent to let if you want to rent out your home. Even if you’re looking for a short-term let, you’ll need to check it doesn’t go against your mortgage terms.

Mortgage Broker and MD, Pete Mugleston from Online Mortgage Advisor explains: “Renting out a property you do not own outright without a buy-to-let mortgage will likely be a violation of your mortgage’s terms and conditions. If you’re caught, your mortgage lender could request that the full loan amount is paid in one go and you’ll end up with black marks on your credit file, jeopardising future applications for finance”.

Renting with the wrong mortgage or without consent to let is a breach of your mortgage contract.

For this reason, you need to ensure your plans to rent out the property are clearly outlined when you apply for your mortgage, or contact your lender to get consent to let to switch your mortgage over.

A consistent income

A long-term rental provides you with more financial stability and a consistent income. This can help with annual tax planning and makes it easier to budget as you’ll know how much money is coming in every month. 

Just like Airbnb, there can be void periods, but the risk is far less. If you find a good tenant that wants to stick around, a long-term rental is a less time-consuming income generator.

Of course, you’ll have some repairs and safety checks to pay for over time, and there is the risk of your tenant not paying rent, but rent protection provides a financial safety net.

Tenants may not live in your property forever, but the turnaround will be far less frequent than a holiday let. Plus, if you market your property correctly, and keep it well-maintained, you may be able to boost your rent and maximise your ROI even further. 

Airbnb vs Renting: Which should you choose?

The benefits of short and long-term lets depend on a range of factors. Location, costs, maintenance and flexibility are just a few of the things to consider. If you’re still pondering which is best for you, ask yourself these questions:

How much free time do you have?

Do you have the free time to prepare the property for new guests each week, or do you need something less frequent?

Where is your property located?

Is the property nearby for you to maintain, or will you need someone to clean, host and maintain it on your behalf? Does the area get a lot of tourists, or is it a residential location?

What kind of income do you want?

Do you need a regular income you can depend on every month, or could you manage a seasonal influx? Are you happy to deal with many different people and payments, or would you prefer one person or family for a longer period?

Can you get a buy-to-let mortgage?

Could you qualify for a buy-to-let mortgage? Or get consent to let and switch your residential mortgage? Some mortgages state there needs to be an AST. Does short-term letting go against your mortgage terms or your head lease if you’re in a flat?

Have you checked your insurance?

Are there any clauses that may go against your insurance when renting short term?

Who do you want living in your property?

Probably the most important question of all. Do you want to know who’s living in your home and be reassured by reference checks, or are you happy to have many different guests over time?

Airbnb vs renting: Which one’s for you?

Both Airbnb and long-term renting have their advantages and drawback, but which one is right for you?

Residential lets are generally less time-consuming, cheaper to maintain and provide a more consistent income. The demand for rental properties remains high, making it easier to secure tenants – but there’s no denying that holiday lets have a unique appeal.

What are your thoughts on Airbnb vs renting? Share in the comments below.

Still not sure what investment is right for you? Book a free call with our property experts today.

This post was last updated on June 21st, 2022 at 10:26 am

The Renters Reform Bill was announced on Thursday 16 June, detailing big changes for landlords and tenants in the UK.

The bill is part of the government’s latest white paper – A Fairer Private Rented Sector. The paper summarises their commitment to “delivering a fairer, more secure, and higher quality Private Rented Sector” and is said to be the “biggest shake-up of the rented sector for 30 years”.

Originally proposed back in 2019, the Renters Reform Bill was mentioned in the recent Queen’s Speech and the government’s Levelling Up White Paper – including plans to “reset the relationship between landlords and tenants” by abolishing Section 21 under the Renters Reform Bill and “end[ing] the unfair situation where renters can be kicked out of their homes for no reason”.

The white paper includes many “robust and comprehensive changes to create a Private Rented Sector that meets the needs of the diverse tenants and landlords who live and work within it”.

• Abolishing Section 21
• New mandatory ombudsman
• Outlawing blanket bans on benefits
• Tenant pet requests and pet insurance
• Changes to rent increases and advance payments
• New Decent Homes Standard
• Reforming eviction grounds for possession
• New property portal for landlords and tenants

Renters Reform Bill – Section 21 Evictions

The Renters Reform Bill will remove ‘no fault’ Section 21 evictions to “provide greater security for tenants while retaining the important flexibility that privately rented accommodation offers”. Currently, a Section 21 notice can be served to tenants on a rolling periodic tenancy or at the end of a fixed-term tenancy to evict with no stated ‘reason’.

Instead, the Renters Reform Bill will abolish Section 21 evictions and simplify tenancy structures. To do this, the government will move all tenants who would previously have had an Assured Tenancy or Assured Shorthold Tenancy onto a single system of periodic tenancies.

Tenants will need to provide two months’ notice when leaving a tenancy, ensuring landlords recoup the costs of finding a tenant and avoid lengthy void periods. Landlords will only be able to evict a tenant in reasonable circumstances, which will be defined in law, supporting tenants with fewer unwanted moves.

Student properties will be included in this reform in order to give students the “same opportunity to live in a secure home and challenge poor standards as others in the PRS”. Purpose-built student accommodation will be exempt.

The government has said they will implement the system in two stages, allowing time for a smooth transition and giving landlords, tenants and agents time to adjust. The white paper has no date for the first stage, but it states that at least six months’ notice will be provided, and there will be twelve months between the two stages.

A new mandatory Ombudsman for landlords and renters

The bill will introduce a single government-approved Ombudsman covering all private landlords who rent out property in England, regardless of whether they use an agent.

The Ombudsman will allow private renters and landlords to settle disputes quickly without going to court. This method will be cheaper than the court and provide landlords and tenants with a “fair, impartial and binding resolution to many issues”.

The new Ombudsman will provide a streamlined service for tenants and landlords, and hopes to tackle the root cause of problems, address systemic issues, provide feedback and education, and offer support for vulnerable people.

Ombudsman membership will be mandatory for landlords. Tenants can put forward complaints and the Ombudsman has the power to “put things right”, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.

Renters Reform Bill – Blanket bans on benefits

The Renters Reform Bill will outlaw ‘blanket bans’ to families with children or people receiving benefits. ‘No DSS‘ or ‘No benefits’ policies – in which letting agents or landlords would refuse to accept applicants receiving benefits – were ruled as unlawful discrimination by the court.

The court ruled that these blanket bans go against the Equality Act and discriminate against women, disabled and vulnerable people – making it more difficult for them to rent.

The Bill is taking this court ruling a step further, by making it illegal to have blanket bans on renting to families with children or those in receipt of benefits. The government states they will enforce this by:

• Supporting landlords to make informed decisions on individual circumstances rather than relying on blanket bans
• Working with the insurance industry to address landlord and agent misconceptions that it is difficult to arrange insurance for properties where tenants are in receipt of benefits
• Exploring improvements to welfare support information for both tenants and landlords and helping to ensure that those who are unable to manage their rent payments can arrange direct payments of housing costs to their landlord through their Universal Credit (Managed Payments)
• Boosting awareness of the range of local services available to help people who are living on a low wage or are receiving benefits

Renters Reform Bill – Tenants’ right to keep pets

The bill will make it easier for tenants to have pets in their homes. All tenants will have the right to request a pet in their house, which the landlord must consider and cannot unreasonably refuse.

If a landlord denies the tenant’s request, they can challenge this decision, but there are currently no details on how this will be enforced.

The Tenant Fees Act 2019 will be amended to include pet insurance as a permitted payment. This means landlords will be able to require tenants to have pet insurance so that any damage to their property is covered.

Dogs and Domestic Animals Accommodation Protection Bill

Last year, the Dogs and Domesticated Animals Accommodation Protection Bill was put forward to parliament to help responsible pet owners find suitable rental properties. The bill has not been progressed, but included plans to ensure all pet owners have a certificate of responsible animal guardianship.

The idea is that tenants can’t have a dog or domestic animal in their rental property unless they hold a responsible animal guardianship certificate and can care for the animal. If living in the rental accommodation puts the animal at risk, or causes danger or nuisance to people nearby, they will not be allowed.

Whilst this bill has not been approved by parliament, the proposed right to request pets in the Renters Reform Bill is a step in the same direction.

Renters Reform Bill – Changes to rent increases and rent in advance

The Renters Reform Bill will end the use of rent review clauses and only allow rents to increase once per year. Landlords must give 2 months’ notice of any rent change.

These changes hope to “prevent tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price”.

If a tenant pays multiple months’ rent in advance, landlords will be required to repay any upfront rent if a tenancy ends earlier than the period that tenants have paid for.

The Renters Reform Bill will also limit the amount of rent that landlords can ask for in advance. This power will be used if the practice of charging rent in advance becomes widespread or disproportionate.

A Decent Homes Standard for the PRS

The Decent Homes Standard is a regulatory standard in the Social Rented Sector, but does not currently apply to the PRS. The white paper states that private rented homes will be required to meet the Decent Homes Standard, as part of the government’s Levelling Up mission to halve all non-decent homes by 2030. Under this new standard, private rental properties must have:

• No serious health and safety hazards, such as risks of fall, fire, or carbon monoxide poisoning
• Adequate kitchen and bathroom facilities
• Decent noise insulation
• Clean, appropriate and usable facilities
• Adequate heating and be warm and dry

The Department of Levelling Up, Housing and Local Communities hope that the Decent Homes Standard will “raise standards and make sure that all landlords manage their properties effectively, rather than waiting for a renter to complain or a local council to take enforcement action”.

The Housing Health and Safety Rating System (HHSRS) is also being reviewed and will conclude in autumn 2022.

Renters Reform Bill – Eviction and gaining possession

The Renters Reform Bill will improve the grounds for possession so they are “comprehensive, fair and efficient”.

Recognising that landlords’ circumstances change, the government is introducing new mandatory grounds for eviction for landlords who want to sell their property and/or move (themselves or family) into the rental property. This cannot be used for the first six months of the tenancy (similar to how Section 21 now works).

New mandatory grounds for repeated serious arrears will also be introduced. This aims to help landlords who have tenants that pay off a small amount of arrears, keeping them under the mandatory repossession threshold of two months’ arrears.

Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at the hearing. This supports landlords facing undue burdens, while ensuring tenants with longstanding tenancies are not evicted due to one-off financial shocks that occur years apart.

The notice period for the existing rent arrears eviction grounds will increase to four weeks and will retain the mandatory threshold at two months’ arrears at the time of serving notice and hearing. This will make sure that tenants have a reasonable opportunity to pay off arrears without losing their home.

Renters Reform Bill – New property portal for landlords and tenants

The government will introduce a new Property Portal to make sure that tenants, landlords and local councils can access the information they need.

The portal will provide a single ‘front door’ for landlords to understand their responsibilities, tenants will be able to access information about their landlord’s compliance, and local councils will have access to better data to crack down on criminal landlords.

They also intend to incorporate some of the functionality of the Database of Rogue Landlords, mandating the entry of all eligible landlord offences and making them publicly visible.

What do you think of the Renters Reform Bill?

What are your thoughts on the proposed changes in the Renters Reform Bill? Share your take in the comments below.

This post was last updated on August 8th, 2022 at 09:14 am

Renting in Wales is changing this year. The original plans were for July 2022, but have been postponed to December 2022. The Renting Homes (Wales) Act will come into force, aiming to make renting easier for everyone. The law brings various changes across the rental process, including new occupation contracts, changes to evictions and increased safety requirements for rental properties.

• What is the Renting Homes (Wales) Act?
• What are the new occupation contracts in Wales?
• When do I need to switch to an occupation contract?
• What are the new rules for joint contracts in Wales?
• What are the new rules for succession?
• How are Welsh evictions and notice periods changing?
• What are the new rules for abandoned properties?
• What are the new safety requirements in the Renting Homes Wales Act?
• What are the legal requirements for EICRs in Wales?
• How will the Act affect supported accommodation?
  

What is the Renting Homes (Wales) Act?

The Renting Homes (Wales) Act 2016 is a new housing law coming into force in December 2022. The legislation, originally planned for July 2022, seeks to ‘simplify renting’ for both landlords and tenants, clarifying rights and responsibilities and increasing protection for renters.

The government considers it “the biggest change to housing law in Wales for decades”, including changes to tenancy agreements, eviction notices, safety requirements, and even getting rid of the word ‘tenant’.

Renting in Wales – Tenancy agreements replaced by occupation contracts

One of the main changes the Renting Homes (Wales) Act will bring is the replacement of tenancy agreements. Instead of a tenancy agreement or licence arrangement, there will be occupation contracts.

Landlords will be split into two types. Registered social landlords and local authorities will be referred to as community landlords. All other landlords will be deemed private landlords.

Tenants and licensees will now be collectively referred to as contract-holders and will have an occupation contract. There are two types of occupation contracts.

Standard contract

This will be the default contract for private landlords but can be used by local authorities or social landlords in certain situations

Secure contract

For community landlords.

What will the new Wales occupation contracts include?

Occupation contracts will function in the same way as a tenancy agreement. There are four types of terms that can be included.

Key terms

These are the names and addresses of all parties and must be included in every contract.

Fundamental terms

These are all the legal requirements and procedures that apply to the contract, such as eviction processes and the landlord’s safety responsibilities.

Supplementary terms

These are related to practical, day-to-day matters. For example, the contract-holder must notify the landlord if the property is going to be empty for longer than a month.

Additional terms

These are terms that relate specifically to this contract, such as keeping pets or parking restrictions. These terms must be reasonable and fair, in line with the Consumer Rights Act 2015.

The occupation contract will be set out in a written statement and must be signed. Landlords (or their managing agents) are responsible for presenting the written statement to all contract-holders.

When do I need to switch to a Renting Homes (Wales) Act occupation contract?

For new rental contracts after December 2022, the written statement must be issued to the contract-holder within 14 days of occupying the property.

Existing tenancy agreements will automatically convert to the relevant occupation contract on 1 December. Landlords and managing agents have a maximum of 6 months to issue a written statement of the converted occupation contract to their contract-holders. This can be a hard or digital copy.

The government have provided a guide on how to convert your tenancy agreement. If you’re with LettingaProperty.com, we’ll contact you regarding creating and issuing your written statement.

Renting in Wales and joint contracts

When the Renting Homes (Wales) Act comes into force, a joint contract-holder will be able to leave a contract without ending the entire contract. New joint contract-holders can also be added to an existing contract, without ending it and starting a new one.

Renting in Wales and succession rights

The new legislation enables contract-holders to have a ‘priority’ and ‘reserve’ successor to take on their occupation contract if they pass.

A person is a priority successor if they are a spouse or live with the contract-holder like a spouse and they occupy the property as their only home.

If the contract-holder takes on the property as a priority successor, then there is no further priority successor in relation to the occupation contract.

A person is a reserve successor if they are not the priority successor, but are a family member, live in the property as their main home, or occupied the property during the 12-month period before the contract-holder’s passing. Successors must be over the age of 18.

Carers can also be reserve successors. To qualify, a person must either be a carer for the contract-holder or for someone who lived with the contract-holder. They must also live at the property as their main home at the time of the contract-holder’s passing.

Read more about Renting Homes Wales Act and succession rights.

Renting Homes (Wales) Act – Changes to evictions and notice periods

Ending a tenancy is also changing. If a contract-holder breaches the occupation contract, the minimum notice period a landlord can give is one month. The notice period can be shorter for serious rent arrears or anti-social behaviour.

No-fault evictions, previously known as a Section 21, have a minimum notice period of six months. No-fault notices cannot be issued until six months after the contract starts.

Landlords will not be able to issue a no-fault notice if they haven’t complied with certain requirements, including registration and licensing with Rent Smart Wales and correctly protecting the deposit.

Read the full legislation on terminating a contract here.

Renting in Wales and break clauses

As of 1 December 2022, break clauses can only be added to occupation contracts with a fixed term of 2 years or more. Landlords will not be able to exercise the break clause within the first 18 months of occupation.

Renting Homes (Wales) Act and abandoned properties

The Renting Homes (Wales) Act will make it easier for landlords to gain possession of their abandoned properties. If a contract-holder abandons a property, the landlord can serve a four-week warning notice and will not need a court order to get the property back.

The warning notice must:

• State that the landlord believes the contract-holder has abandoned the dwelling
• Ask the contract-holder to inform the landlord in writing if they have not abandoned the property before the end of the warning period
• Inform the contract-holder that the landlord will be ending the contract at the end of the warning period if the landlord is satisfied that the contract-holder has abandoned the property

Landlords must make necessary investigations to determine whether the contract-holder has abandoned the property. The warning notice must also be provided to any lodger or sub-holder of the contract-holder.

Fitness for human habitation and the Renting Homes (Wales) Act

The Renting Homes (Wales) Act places clear responsibilities on landlords to keep their rental properties safe and fit for human habitation. Rent will not be payable for any period during which the property is not fit for human habitation.

The structure and exterior property must be kept in good repair, and water, gas and electricity installations must be in good working order.

To meet these requirements, landlords must also:

• Have working smoke alarms fitted on every floor
• Have working carbon monoxide alarms fitted
• Arrange electrical testing and get a valid EICR

If a landlord issues a no-fault possession notice in response to a repair request from the contract-holder (otherwise known as a retaliatory eviction) the court can refuse the possession order and another cannot be made until 6 months on.

Renting in Wales and electrical inspections

As of 1 December 2022, all rental properties will require a valid electrical installation condition report (EICR). The Renting Homes (Wales) Act is making electrical inspections mandatory every five years. This involves a qualified electrician visiting the property, assessing the wiring and installations, then issuing a report.

If the property fails the inspection, the landlord must arrange the recommended remedial work to make the property safe and receive a valid EICR. The EICR must be given to tenants within 7 days of being issued – or at the start of the contract if they’re a new contract-holder.

For tenancies turning into occupation contracts, landlords have a year to comply with electrical safety and smoke alarms requirements.

Renting Homes (Wales) Act and supported accommodation

If you provide supported accommodation, sometimes referred to as ‘supported living’, you will not have to issue an occupation contract for the first six months of occupancy.

Supported accommodation must include support services in the form of advice, training, guidance or counselling. Support services include:

• Support in controlling or overcoming addiction
• Support in finding employment or alternative accommodation
• Supporting someone who finds it difficult to live independently because of age, illness, disability or any other reason

After six months, they will become entitled to a ‘supported standard contract’. The supported standard contract will operate in a similar way to a standard contract, however, can include terms relating to:

• The ability to relocate the contract-holder within the building; and
• The ability for the landlord to temporarily exclude the contract-holder from the dwelling for up to 48 hours, a maximum of three times in six months

What do you think?

The Renting Homes (Wales) Act will be making significant changes for landlords and renters in Wales, but what are your thoughts on the new legislation? Let us know in the comments below.

This post was last updated on June 28th, 2022 at 11:26 am

Knowing how to buy to let in the UK can be daunting. If you’re a first-time investor, you may not know where to begin. Even for experienced landlords, the buy-to-let process can be overwhelming as the rules and regulations regarding letting out a property are changing all the time.

If you’re thinking of becoming a landlord, there are a few things you should know beforehand. From mortgages and deposits to calculating your monthly rent and return on investment – this article gives you everything you need to start your buy-to-let journey.

• What is a buy-to-let?
• What is a buy-to-let mortgage?
• How much can I borrow for a buy-to-let?
• How much is a deposit for a buy-to-let?
• What are the buy-to-let mortgage fees?
• What taxes will I pay as a landlord?
• Where’s the best place to buy a rental property?
• Who should I rent to?
• How much rent should I charge?
• How do I calculate my buy-to-let rental yield?
• Do I need a licence for a buy-to-let?
• Do I need insurance for a buy-to-let?
• Do I need property management?

What is a buy-to-let?

A buy-to-let (BTL) property is a residential property purposely bought to be rented out. Most buy-to-let properties will require a buy-to-let mortgage – a mortgage specifically created for the purchasing a property to let.

Not all rental properties are initially bought as a buy-to-let. Some landlords inherit a property, or buy a property to live in, but decide to rent it later on. In this case, the landlord must make their mortgage lender aware – and switch their mortgage to a buy-to-let.

Read the latest: 12 Things Landlords Can Expect from 2022

What is a buy-to-let mortgage?

A buy-to-let mortgage is a mortgage designed for buying a property with the intention of renting it out. The borrowing amount on a buy-to-let mortgage usually depends on the rental income you expect to earn, and the deposit amount is typically higher than a residential mortgage.

If you already have a property on a residential mortgage but want to start letting it – you must contact your mortgage provider to get consent to let or switch to a buy-to-let mortgage. Even if you’re looking for a short-term let, you’ll need to check it doesn’t go against your mortgage terms. Mortgage broker Sheryl Kirk from Buy to Let Direct explains:

“A residential mortgage is secured against the home in which you and your family will reside, where as a buy to let mortgage is for investment purposes. The mortgage will be secured against the property in either scenario, but the terms of the mortgage will differ depending on the type of mortgage. The requirements are different: a buy to let mortgage is assessed based on the estimated rental income it will receive, whereas a residential mortgage is based on personal affordability.“

Renting with the wrong mortgage or without consent to let is a breach of your mortgage contract.

“It’s very important to make sure you have the right mortgage in place for your circumstances. If you were to rent out a property on a residential mortgage without the lender’s permission, then you are likely to breach the terms of the mortgage. Lenders will view this as mortgage fraud. In this instance, the lender could demand you repay the mortgage in full or repossess the property.“

For this reason, you need to ensure your plans to rent out the property are clearly outlined when you apply for your mortgage, or contact your lender to get consent to let to switch your mortgage over.

How much can I borrow for a buy-to-let?

Most mortgage lenders will require your rental income to be more than your monthly mortgage payments by at least 25% to 45%. This is also known as ‘rental cover’ – ensuring you have extra cash to pay your mortgage during potential void periods. 

The amount you can borrow will also depend on your income, affordability and financial history. If you have some outstanding debts, your available borrowing amount may be lower. 

You should consider how much you want to borrow in comparison to the property’s value, otherwise known as loan-to-value or LTV. Mortgages with an LTV over 75% are difficult to come by – and usually require a hefty deposit. 

How much is a deposit for a buy-to-let?

Deposits for buy-to-lets tend to be bigger than a standard residential mortgage. Most lenders ask for a minimum of 20-25%, whereas some require up to 40%.

Buy-to-let mortgages with smaller deposits are available, but the interest and fees will be considerably higher.

What fees are there to pay with a buy-to-let mortgage?

There are a few fees that come with a buy-to-let mortgage:

• Mortgage broker fees
• Lender arrangement and booking fees
• Valuation fees
• Legal fees
• Early repayment fees
• Mortgage exit fees

Buy-to-let mortgage broker fees

Some mortgage brokers charge for their services. This includes searching the market to find a buy-to-let mortgage that suits you and securing a mortgage offer. Some brokers don’t charge at all, whereas some will only charge once a successful offer is received. 

Typical fees range from £400 to £1,000 depending on the loan, product and whether you already have a mortgage. Fees for second mortgages tend to be higher than a standard residential mortgage. 

Lender arrangement and booking fees

Lender arrangement fees are usually charged by the bank or building society before your application. Some lenders have a flat fee, whilst others work on a percentage – usually between 0.5% and 2%. Some lenders will allow you to add the arrangement fee to the loan, whereas some will not charge at all. 

Some banks and building societies charge a booking fee, which allows you to secure a specific mortgage rate for a period of time. 

Buy-to-let valuation fees

Valuation fees usually depend on the value of the property. Mortgage lenders require a valuation to ensure the property value exceeds the loan amount you’re requesting.

Some lenders include a free basic valuation in the mortgage package, whilst others charge a percentage based on the value and size of the property.

Legal fees

As with any property purchase, there will be solicitor conveyancing fees. This includes all the legal administration for the property, including searches and registration with the Land Registry. These fees can vary, depending on the solicitor you’re using and the level of service they provide – typically ranging from around £1,200 to over £3,000.

Buy-to-let early repayment fees

Early repayment charges for a buy-to-let mortgage are a calculated percentage, based on the amount you’ve borrowed and how far you are into your mortgage. The usual fee is between 1% and 5%. The further you are into your mortgage deal, the lower the fee tends to be.

Buy-to-let mortgage exit fees

If you decide to close your account with your mortgage provider, you may be charged an exit fee. This covers the administrative costs of closing your account. The fee is determined by the provider and can range from £75 to £300, although some are free.

What taxes will I pay with a buy-to-let?

All landlords must pay tax on their rental income. The rent must be declared in your Self Assessment tax return and the amount of tax you pay depends on how much you earn. 

Rental income includes the rent, but also other payments from tenants, such as utility bills. For example, if you charge £1,000 rent inclusive of bills, this whole amount will be recognised as income – but some costs can be deducted as expenses.

Deductible expenses include:

• Landlord insurance
• Mortgage interest (soon to be phased out)
• Costs of contractors and services
• Letting agent or property management fees
• Accountant fees
• Ground rents and service charges
• Water, gas and electricity bills
• Council tax

Any deducted expenses should be incurred exclusively from letting your property. If you only let out part of your home or only let it during certain times of the year, you must apportion your expenses accordingly.

You can’t deduct expenses that add value to the property, such as an extension or renovation work, however, this could be deducted from Capital Gains Tax if you sell the property later on.

Buy-to-let taxes: Stamp Duty

When purchasing a buy-to-let, you will have to pay Stamp Duty Land Tax. The Stamp Duty rates for buy-to-let properties are:

• 3% up to £125,000
• 5% between £125,001 and £250,000
• 8% between £250,001 and £925,000
• 13% between £925,001 and £1.5 million
• 15% above £1.5 million

This also applies to second homes and holiday homes.

Learn more about Stamp Duty Land Tax.

Buy-to-let taxes: Capital Gains Tax

When selling a buy-to-let property, you may need to pay capital gains tax on the profit. This is a tax on the profit you make from the sale, not the amount you sell the property for.

To work out your total gain, simply take the sold amount, then deduct the price you paid for the property, plus any other costs incurred from buying or selling the property.

All taxpayers have an annual capital gains tax allowance of £12,300. This will stay the same for 2022-23. Basic-rate taxpayers must pay 18% on gains made from selling a property. Higher and additional rate taxpayers pay 28%. 

Where is the best place to purchase a buy-to-let?

Deciding where to purchase a property is as important as the property itself – if not more.

The ideal location firstly depends on how local you want to be to your property. If you want to hand the keys over to an agency, you can pick wherever you like. But if you want to be involved in choosing your tenant and conducting viewings – a 30-minute radius is a good starting point for your buy-to-let property search.

According to Aldermore’s Buy to Let Tracker, Bristol is the best city in the UK for buy-to-let investment. The tracker takes into account:

• Average total rent
• Short-term returns through yield
• Long-term return through house price growth
• Lowest number of vacancies
• Percentage of the population in the rental market

With all these factors considered, Bristol came out on top, followed by Oxford, Cambridge, Manchester and Luton. London has slipped down the ranks since 2020, but remains in sixth place due to its market potential and high proportion of private renters.

Top ten buy-to-let locations in UK

1. Bristol
2. Oxford
3. Cambridge
4. Manchester
5. Luton
6. London
7. Northampton
8. Brighton
9. Reading
10. Norwich

(Source: Aldermore’s Buy to Let City Tracker’s Top 10 Cities)

Who should I rent to?

Choosing your target tenants really depends on what your property has to offer and what local demand is like. If you’re in a student area with multiple universities, like Manchester or Birmingham, a 3 or 4-bed house could be a great HMO investment.

Research the renters in your area and determine what appeals to them. Families are likely to want larger properties, with a drive/garage, a garden in close proximity to schools. Students want to be central; near their University and local amenities, with good-size bedrooms and larger communal space.

How much rent should I charge?

You can calculate your monthly rent with a rental valuation. This takes into account current rents in your area, the condition and location of your property, and stand-out features your property has, such as gardens, garages and driveways. All these things are considered, along with the current rental market, to determine a realistic monthly rent.

As the landlord, the rent is ultimately up to you, but it’s good to know what you’re working with. Unsure what your property’s worth? Get a free rental valuation.

How do I calculate my rental yield?

Figuring out your rental yield is an important part of buy-to-let investment. There are two yields to consider: your gross yield and your net yield.

Gross rental yield

This is your yield without property expenses and is simple to calculate.

1. Multiply your monthly rental income by 12 to get your annual income
2. Divide that figure by the purchase price
3. Multiply that figure by 100

This will give you your gross rental yield percentage. Here is an example of a buy-to-let purchased for £250,000 with a monthly rent of £1,750.

£1,750 x 12 = £21,000

£21,000 ÷ £250,000 = 0.084

0.084 x 100 = 8.4

Gross rental yield percentage: 8.4%

Net rental yield

Your net rental yield includes the expenses of owning a buy-to-let, making it a far more accurate representation of your investment.

This includes all property-related expenses, such as mortgage payments, insurance, maintenance, accountants and letting agents’ fees.

1. Multiply the monthly rental income by 12 to get your annual income
2. Subtract the annual costs of owning the property
3. Divide that figure by the property’s purchase price
4. Multiple that figure by 100

This will give you your net rental yield percentage. Here is the same example as above, a buy-to-let purchased for £250,000 with a monthly rent of £1,750.

£1,750 x 12 = £21,000

£21,000 – £6,000 (expenses) = £15,000

£15,000 ÷ £250,000 = 0.06

0.06 x 100 = 6%

Net rental yield percentage: 6%

A rental yield anywhere between 5% and 8% is considered a good investment. Anything below this may not provide you with a reasonable return.

Do I need a licence to rent out my property?

Some areas of the UK require landlords to have a licence. You can check with your local council to find out if you need a selective licence to let out your property.

If your property is an HMO, you may require an HMO licence. An HMO, or House of Multiple Occupation, is typically defined as a property let to two or more households, sharing bathroom and kitchen facilities, however, different councils have varying HMO rules and licensing requirements. Check with your local council to see what the HMO rules are in your area.

Do I need insurance to rent out my property?

Building Insurance is required for most buy-to-let mortgages. This covers the cost of rebuilding your home if it’s damaged or destroyed, minimising the financial risk for the lender.

Building and Contents Insurance, covers the building and everything in it. This will not cover the tenant’s belongings. They will have to get their own insurance for that.

Many landlords opt for rent protection or rent guarantee insurance, but it’s not a requirement for a buy-to-let mortgage. This essentially covers the monthly rent if the tenant is unable to pay – which has become even more popular with landlords since the pandemic.

Rent protection is included in our Essential and Complete plans, from £79 a month (inc VAT)

Do I need property management for my buy-to-let? 

Deciding if you need property management depends on your budget, free time, the level of service you’re looking for and the amount of control you want.

If you want little to no involvement in your rental, you’ll need a comprehensive level of property management. Some landlords want to do it themselves and be involved in the process – particularly with choosing tenants. If this is you, you’d be suited to a mixed level of support where you have control, but can contact an expert when you need it.

This post was last updated on June 17th, 2022 at 12:10 pm

On 2 February 2022, Levelling Up Secretary Michael Gove unveiled the government’s Levelling Up White Paper. This document outlines plans to ‘transform the UK’ and change how the government system works. The levelling up for landlords and the private rented sector includes a new Decent Homes Standard to improve property conditions, a register for all landlords, and the aforementioned removal of Section 21, but how will these plans impact landlords and renters?

What is the government Levelling Up White Paper?

The Levelling Up White Paper is essentially a plan of the government’s commitments. The aim is to “spread opportunity and prosperity” to all parts of the country with 12 bold “levelling up missions” to shift government focus to “Britain’s forgotten communities”.

Prime Minister Boris Johnson has said that the White Paper “marks a significant milestone in ensuring his government deliver on the people’s priorities”.

The White Paper is set to:

• Be the biggest shift of power from Whitehall to local leaders in modern times announced – every part of England to get ‘London style’ powers and mayor if they wish to
• Begin a decade-long project to level up Britain, with radical new policies announced across the board
• Increase domestic public investment in Research & Development by at least 40% across the North, Midlands, South West, Scotland, Wales, and Northern Ireland

Read the latest Renters Reform Bill White Paper: A Fairer Private Rented Sector

How does the government Levelling Up White Paper impact the rental sector?

The 2022 Levelling Up The United Kingdom White Paper features “12 missions to level up the UK” – one of which is to give renters a secure path to home ownership.

By 2030, renters will have a secure path to ownership with the number of first-time buyers increasing in all areas; and the government’s ambition is for the number of non-decent rented homes to have fallen by 50%, with the biggest improvements in the lowest-performing areas.

Part of this plan to ‘transform’ the private rented sector includes the introduction of a Decent Homes Standard for all rental properties, as well as a landlord register and a ‘crackdown’ on fines and bans on rogue landlords. As anticipated, Section 21 will be removed with hopes to “end the unfair situation where renters can be kicked out of their homes for no reason”.

• Levelling up for landlords – Decent Homes Standard
• Levelling up for landlords – National Register for Landlords
• Levelling up for landlords – Removal of Section 21

Levelling up for landlords – Decent Homes Standard for rental properties

The government has pledged to improve the overall quality of housing in the UK by 2030.

Poor housing quality, overcrowding and reliance on temporary accommodation for vulnerable families also contribute to unnecessarily poor health and quality of life for many. We will take action on two fronts. First, building more housing in England, including more genuinely affordable social housing. Second, we will launch a new drive on housing quality to make sure homes are ft for the 21st century.

The government also intends to introduce new legislation to “Improve the quality and regulation of social housing” by giving residents performance information so that they can hold their landlord to account and take effective action to put things right.

The Decent Homes Standard will be introduced in a landmark White Paper this spring.

Levelling up for landlords – National Register for Landlords

The Department for Levelling Up, Housing and Communities has also announced plans to “explore a National Landlord Register”. There is no further mention of this topic, other than it being part of the government’s 2030 goal of decreasing the “number of non-decent rented homes” by 50%.

Related article: 12 Changes You Can Expect In 2022: New Landlord Rules & Regulations For Buy-To-Lets

Levelling up for landlords – Abolition of Section 21

The White Paper further affirms the government’s plans to abolish Section 21. This change is part of the government’s plans to “reset the relationship between landlords and tenants”, but no other details are included in the Levelling Up White Paper.

The removal of Section 21 will be part of the Renter’s Reform Bill – of which another White Paper is expected this spring.

Currently, tenants can be evicted in a rolling periodic tenancy or at the end of a fixed-term tenancy without giving a reason. Instead, the Renter’s Reform proposes strengthening the grounds of Section 8 – improving the grounds for possession and the overall court process.

David Cox, Legal and Compliance Director of Rightmove, commented:

“Depending on what the government come forward within the Renters’ Reform white paper, [the abolition of Section 21] might actually be better for us going forward.”

“We hold onto Section 21 because that’s what we’ve had, but it’s not the best system. It hasn’t ever been the best system because you basically have to take the view of ‘I’m going to lose all my money, I’ve just got to get the tenant out”.

“Whereas if we have a reformed Section 8, where the landlord gets their money back or at least gets some of their money back, that could be better going forward, providing they fix the court system alongside fixing the law.”

What other levelling up plans are there for the property sector?

Redirection of funding for housing

The ‘80/20 rule’ which leads to 80% of government funding for housing supply being directed at ‘maximum affordability areas’ – in practice, London and the South East – will be scrapped, with much of the £1.8 billion brownfield funding instead being diverted to transforming brownfield sites in the North and Midlands. The Metro Mayors will be allocated £120 million of this funding.

Boost for home ownership

Home ownership will be boosted due to a new £1.5 billion Levelling Up Home Building Fund being launched, which will provide loans to SMEs and support the UK government’s wider regeneration agenda in areas that are a priority for levelling up.

Energy efficiency

Poor energy efficiency will be tackled with targetted funding for the worst-performing homes and “those least able to pay”.

Commitment for social housing

The government will further commit to building more genuinely affordable social housing. A new Social Housing Regulation Bill will deliver upon the commitments the government made following the Grenfell tragedy in 2017.

What are your thoughts about the Levelling Up White Paper?

The White Paper has brought forward new measures and confirmed already-rumoured plans for the private rented sector, but what are your thoughts on the government’s plans?

This post was last updated on August 8th, 2022 at 09:15 am

New landlord rules and announcements are on the cards for 2022. Tax changes, licensing for short-term Scottish lets and amended rules for smoke and carbon monoxide alarms are confirmed – but what other property-related news can owners and investors expect this year?

Latest article: Renters Reform Bill White Paper – What You Should Know

• Capital Gains Tax
• 6-month evictions ending (Scotland)
• Temporary Right to Rent checks ending (England)
• Making Tax Digital
• Renting Homes (Wales) Act 2016
• Short-term let licensing schemes for (Scotland)
• Regulation of holiday lets consultation (England and Wales)
• Changes to smoke and carbon monoxide alarms (England)
• Renters’ Reform Bill: Section 21 and Lifetime Deposits (England)
• Changes to Minimum Energy Efficiency Standards (England)
• Introduction of Regulation of Property Agents (RoPA)
• Pet-friendly tenancies and new landlord rules

Extended reporting time for Capital Gains Tax

Changes to the reporting deadlines for Capital Gains Tax were announced in the chancellor’s Autumn Budget last year.

Property sellers will now have 60 days to file and pay their Capital Gains bill, rather than the previous 30 days. This change has been welcomed by many and was influenced by a report from the Office for Tax Simplification stating the 30-day deadline was proving difficult for taxpayers.

This officially came into effect on 27 October 2021 and applies to any properties sold after this date.

Related article: Levelling Up for Landlords 2022: Government White Paper for Landlords and Renters

March – End of 6-month eviction notices in Scotland

Under the Coronavirus (Scotland) Act 2020, landlords must give six months’ notice to evict their tenants. This is set to end on 31 March 2022 but could be extended to September 2022. Alternatively, the temporary measures could be ended early if the Scottish parliament agrees it’s no longer required, though this is unlikely.

When the measures do end, notice periods will return to their original length. For most tenancies in Scotland, this will be 28 days when less than six months into a tenancy, or 84 days after six months.

April – End of temporary Right to Rent checks in England

In March 2020, the rules on Right to Rent checks were changed to help landlords and tenants stay safe during the pandemic.

To reduce in-person interactions and physical contact, tenants have been allowed to show their original Right to Rent documents over video call and share scanned or photographed copies with landlords and agents.

The online Right to Rent service has also been made available for tenants with:

• Non-EEA citizens with a current biometric resident permit or card
• EEA citizens and their family members with status granted under the EU Settlement Scheme
• A digital Certificate of Application to the EU Settlement Scheme issued on or before 30 June 2021
• those with status under the points-based immigration system
• British National Overseas (BNO) visa; or
• Frontier workers permit

The online service allows tenants to view their own Home Office right to rent record, then share it with the landlord via a share code. The landlord can enter the code and the tenant’s date of birth and view their right to rent information here: GOV.UK View a tenant’s right to rent in England.

The temporary changes to Right to Rent measures are scheduled to end on 5 April 2022 – but may be extended further. The government is intending to move all Right to Rent checks to the online service, but this is currently only available for non-British citizens. There has been no announcement as to when the online service will be available for all nationals – but the government may choose to extend the temporary COVID measures until the online service is ready for everyone.

April – Making Tax Digital for VAT

On and after 1 April 2022, all VAT-registered businesses with a taxable turnover of less than £85,000 will be required to keep tax records and submit their VAT returns digitally. This is already the case for businesses with taxable turnover above £85,000 – but will be rolled out to all businesses in April 2022.

Learn more about Making Tax Digital.

July – New landlord rules and Renting Homes (Wales) Act 2016

The Renting Homes (Wales) Act 2016 will come into effect on 15 July 2022. The law aims to increase protection for renters and make it easier to rent a home in Wales.

Changes include the replacement of assured shorthold and assured and secure tenancies with new occupation contracts, as well as the dual categorisation of landlords: community landlords (council and housing association) and private landlords (any other landlord).

There will also be new rules for serving notice:

• The notice period for ‘no fault’ evictions (currently known as Section 21) will be six months
• Evictions on ‘no fault’ grounds will not be permitted until 6 months after a contract starts
• Landlords must meet certain obligations to serve a ‘no fault’ eviction notice, such as registration, licensing, deposit protection and health and safety provisions
• Break clauses will only be allowed for fixed-term occupation contracts of 2 years or more and the break clause cannot be exercised for the first 18 months

October – Short-term let licensing schemes for Scotland

The Scottish government is introducing local licensing schemes for short-term rental properties. The move has come as a response to the increasing rents and complaints of disruption in popular tourist areas with many holiday lets.

Legislation allowing local councils to create “control areas” for short-term lets has been passed, with one proposed for Edinburgh. The city is home to a third of Scotland short-term lets and has seen a significant rise in the past five years – particularly with online platforms like Airbnb.

Under the new proposal, property owners must get permission to run a short-term let. The council will decide the suitability based on density, residential amenity and housing shortages in the area. It’s not known when exactly Edinburgh’s “control area” will launch, but the new bill (if passed) will see local councils drawing up short-term licensing schemes by October 2022.

Existing hosts and property owners will have until April 2023 to apply for a licence per property. All short-term lets in Scotland will require a licence by July 2024.

Consultation on the regulation of holiday lets for England and Wales

A government consultation regarding the regulation of holiday lets in England is expected this year. The consultation will look at the impact of short-term lets and will discuss the concept of a mandatory register for holiday rentals in England.

Increasing council tax rates for short-term rentals have been proposed – and are already being considered by the Welsh government, who ran a similar consultation in 2021.

GOV.UK – Government closes tax loophole on second homes

New landlord rules for smoke and carbon monoxide alarms in England

Amendments to the smoke and carbon monoxide alarm rules for landlords are expected this year. Currently, private landlords are required to ensure all alarms are working at the start of the tenancy, have a smoke alarm on every floor, and a carbon monoxide alarm in any room with a solid fuel appliance, such as a log burner.

The new landlord rules – in force from 1 October – will require social landlords to have a smoke alarm on every floor, not just private landlords, as well as a carbon monoxide alarm in any room with a fixed combustion appliance (such as a gas boiler or fire).

Tenants will still be responsible for testing alarms during the tenancy, but landlords will now be required to fix or replace any faulty alarms as soon as they are informed.

It is fundamentally right for people to feel safe in their own homes – an issue I’ve advocated for many years.

Around 20 people are killed each year in accidental carbon monoxide poisoning, and many more through house fires – but we know that simple interventions can stop these needless deaths.

I’m proud that the new rules being proposed will ensure even more homes are fitted with life-saving alarms. Whether you own your home, are privately renting or in social housing – everyone deserves to feel safe and this is an incredibly important step in protecting those at risk.

Eddie Hughes, MP, Minister of Rough Sleeping and Housing

Progression of Renters’ Reform Bill: End of Section 21 and introduction of lifetime deposits

A white paper on the Renters’ Reform Bill originally planned for autumn last year is expected in spring. The bill is set to abolish Section 21 of the Housing Act 1988 which currently allows tenants to be evicted in a rolling periodic tenancy or at the end of a fixed-term tenancy without giving a reason.

Read the Renters Reform Bill White Paper.

Instead, the bill proposes strengthening the grounds of Section 8 – improving the grounds possession and the overall court process.

David Cox, Legal and Compliance Director of Rightmove, commented:

“Depending on what the government come forward within the Renters’ Reform white paper, [the abolition of Section 21] might actually be better for us going forward.”

“We hold onto Section 21 because that’s what we’ve had, but it’s not the best system. It hasn’t ever been the best system because you basically have to take the view of ‘I’m going to lose all my money, I’ve just got to get the tenant out”.

“Whereas if we have a reformed Section 8, where the landlord gets their money back or at least gets some of their money back, that could be better going forward, providing they fix the court system alongside fixing the law.”

If all goes well, the Renters’ Reform Bill could mean a specialist housing court with expert judges, making the process more consistent, quicker and less costly to landlords.

Lifetime deposits for tenants have also been proposed as part of the Bill. This will allow tenants to have a moveable tenancy deposit or “deposit passport” that is transferred from one landlord to the next without being returned to the tenant.

Announcement of expected energy efficiency changes

As part of the government’s 2050 net-zero emissions target, it’s expected that the minimum energy efficiency standard for rentals will be raised to ‘C’ by 2030.

This information was leaked in October last year, but an official announcement is expected at some point this year.

It’s anticipated that the minimum energy standard will be raised to ‘C’ for new tenancies in England as of April 2026, followed by all existing tenancies in April 2028.

The current standard is ‘E’ or above – with a spending cap of £3,500 for improvements. The spending cap will be increased to £10,000 per property – meaning landlords may have to undertake bigger works, such as external solid wall insulation, to meet the energy requirements.

The new landlord rules could prove costly, particularly those in rural areas and in the north – where there are many pre-1919 properties with low energy performance ratings. Landlords may be able to seek funding from local authorities, energy companies and charities, such as National Energy Action and Energy Savings Trust.

This information has not been formally released by the government, but an announcement this year is highly likely.

Introduction of Regulation of Property Agents (RoPA) in England

In 2019, a regulatory framework for property agents was published. The Regulation of Property Agents: Working Group Report examined a model for an independent property-agent regulator to raise the standards in the sector, including a Code of Practice and minimum entry requirements for property agents.

Government response to the report has been delayed over the last two-and-a-half years due to coronavirus regulations, but is still expected. A white paper could be published by the end of the year but may be delayed until 2023.

Recommendations in the report include:

• Individual licenses for practising agents
• Licensing for companies
• CPD requirements for agents
• To be licensed, companies must be compliant in CMP, redress, insurance, ICO and AML (for sales)

For lettings, RoPA will only apply in England as Scotland already has Letting Agent Registration and Wales has Rent Smart Wales. RoPA will be UK wide for sales and auctioneering.

Pet-friendly tenancies in England

Last year, the government launched a new model tenancy agreement preventing landlords from issuing a blanket ban on pets. Allowing pets is now the default position and if a landlord doesn’t want their tenant to have a pet, they must object in writing within 28 days of a written request from the tenant. The landlord must provide a good reason, such as in smaller properties where owning a pet would be impractical.

Alongside the model tenancy agreement, a bill was proposed to parliament last year that will help responsible pet-owning tenants. The Dogs and Domestic Animals Accommodation Bill hopes to protect domestic animals by proposing a certificate of responsible animal guardianship requirement for all pet owners.

The certificates would be issued subject to a responsible ownership test, conducted by a registered vet, including:

• Microchipping (for dogs and cats)
• De-worming and de-fleaing
• Required vaccinations
• Ability to respond to basic commands

The Bill also proposes that all information regarding an animal and its ownership be entered into a database – including mandatory microchipping for all dogs and cats.

Currently awaiting its second reading, the Bill has not been passed but may move forward this year.

Learn more: Renting With Pets – What are the Rules for Landlords and Tenants?

What are your thoughts?

How do you feel about the expected changes coming for the private rented sector? Share your thoughts in the comments below.