There are many lessons to be learned from 2022. Most prominently, and extremely sadly we heard about the tragic circumstances within the private rental sector in Rochdale, where a young child died from mould infestation in 2020, despite numerous complaints by his parents to the landlord. This led to action from Housing Secretary Michael Gove, and subsequently a number of changes to legislation and new regulations came into force. Here, we highlight those that will gain prominence in 2023.
- White Paper
A white paper on a fairer private rented sector was introduced to the House of Commons on 3November 2022. It calls for a need to address the unaffordability of housing and raise the housing security for tenants, by reducing the reasons why people lose their tenancy and become homeless. It’s seeking to introduce a simpler tenancy structure, abolish Section 21 ‘no fault’ evictions, apply the Decent Homes Standard to the private rental sector and ensure landlords understand their obligations, among other factors.
- Renters Reform Act
The Renters’ Reform Bill is a proposed piece of legislation that has the potential to transform renting for good. The main proposals in the bill are to:
- scrap Section 21 ‘no fault’ evictions
- create a register of landlords
- introduce a privately rented ombudsman to help enforce renters’ rights
- make it illegal for landlords and agents to refuse to rent properties to people who receive benefits
- give local authorities more power to enforce and protect renters' rights
We can expect the Renters’ Reform Bill to be debated and voted on in parliament before May 2023.
- Making Tax digital
In April 2024, the HMRC’s vision to digitise the UK tax system over 5 years from 2019, comes into full use. Making Tax Digital (MTD) is something landlords whose annual rental income from properties over £10,000 per annum, need to be aware of as landlords will need to submit a total of five tax returns over the course of 12 months – quarterly tax returns and the final combined annual tax return. There is a penalty system for late submissions and this can accrue over time. Do study the details or ask the team at Maddisons Residential for advice.
- Rental stock
2022 saw a reduction in rental stock and an increase in rental prices. In the last few weeks of 2022, these somewhat stabilised, and we hope to see more supply coming to the market in 2023, with rentals prices settling down, and a lessening of the severe spikes in these prices, that was seen in 2022.
Over 80% of professional landlords (those who use their rental property/portfolio as their main income) wanted to grow their rental portfolio and still see it as a great return on their investment, with 49% of those wanting to do so to provide more housing in their local area. Nonprofessional landlords however, with 2 -3 houses and accidental landlords, wanted to retract from the market due to increased regulation, especially those who have Houses of Multiple occupancy (HMO).
- Legislation and regulations
We can’t predict what changes in legislation we might see in 2023, but what we saw in 2022 included changes to carbon monoxide and smoke alarm requirements. Throughout the year, it’s critical that we keep an eye out and be aware of any changes as they come about.
Legislation can be complicated and private landlords need to be better informed about these. Our lettings team are adept in keeping track of any changes and alerting our clients to their responsibilities. HMO’s legislation, for example, is very complex and often landlords are unaware that they are in breach of the rules and are subsequently fined without realising they were breaking the rules, especially as the regulations can vary between local authorities across the UK.
The private rental sector is becoming more regulated and better managed, and we welcome changes to make it fairer for all. We are looking to support smaller non-professional landlords so that they remain in the market and as mortgages rates steady somewhat over buy to let mortgage rates, we are optimistic that we will see a better rental market in 2023.
Do get in contact with us as we can help with any letting related business you might have.
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