2019 was a volatile year for landlords. Between the Tenancy Fees Act 2019, the introduction of the Homes (Fitness for Human Habitation) Act 2018 and the Section 21 controversy, it was almost impossible to keep up with changing legislation.
The current political climate doesn’t make things easier, either. What will happen now that there's been another General Election? Will Brexit impact landlord rights in the UK?
In this blog post, we get you up to speed with the changes to landlord legislation in 2019 and prepare you for an even more unpredictable 2020.
1. Minimum energy efficiency standards
The private rented sector has the largest proportion of energy inefficient homes in the UK. 6.3 percent are F and G rated properties, compared to around 0.7 percent of social housing.
As of 1st April 2019, landlords of properties banded F or G on an Energy Performance Certificate will have to invest up to £3,500 to improve the insulation of a property before they can rent to new tenants or renew an existing tenancy agreement.
This means that if you own a property banded F or G, you’ll have no choice but to spend on improvements or face fines up to a maximum of £5,000.
Make sure to be proactive here. From 1st April 2020, this will begin affecting existing tenants, too. The sooner you improve your energy standards, the better. Don’t risk losing your tenants.
2. The Homes (Fitness for Human Habitation) Act 2018
As of 20th March 2019, the Homes (Fitness for Human Habitation) Act 2018 has been in effect. This act adds in a new section to the Landlord and Tenant Act 1985.
In short, it implies that a landlord agrees a property is fit for human habitation at the time the lease is granted or otherwise created, and that it will remain fit for human habitation during the term of the lease.
Whilst this is now the minimum legal requirement, it usually benefits landlords to go above and beyond. After all, creating comfortable homes for tenants to live in means fewer problems later on, a better standard of tenant, and the potential to charge a little extra on rent.
3. The Tenant Fees Act 2019
With 2019 came the ban on charging tenants letting fees. Plus letting agencies and landlords can now only charge tenants a deposit of up to five weeks’ rent (or six for tenancies that cost more than £50,000 a year).
The Tenant Fees Act 2019 applies to all tenancies in England who signed on or after 1st June 2019. From 1st June 2020, the bill will affect pre-existing tenancies, too.
For landlords, there’s a chance that estate agents' fees will increase as they try to cover this cost (some are already doing this). If your agent does increase your fees then you should question your existing relationship and shop around, or look for an alternative managed service platform - perhaps one that offers lower fees, a higher quality vetting process, and who delivers perks such as free property furnishings (like us here at Residently!).
4. Section 21
Section 21 gives landlords the right to take back possession of their property at the end of a fixed-term tenancy, or during a periodic tenancy, without needing a specific reason. Since 21st July 2019, however, the Government has been planning to abolish it.
The Section 21 debate is still undetermined, and no final decisions have been made. But following the announcement of a Renters Reform Bill in the Queen's speech on 19th December 2019, it looks likely that the abolition of Section 21 will go ahead.
This Renters Reform Bill promises to entirely reform the process for evicting tenants - so both landlords and tenants should keep a close eye on any further developments in 2020.
What to do about political uncertainty and changing legislation
Rental legislation changed dramatically last year, but these changes are just the tip of the iceberg. 2020 brings with it a new government, which means that legislation will continue to change.
As a landlord, it’s your job to keep up. If you’re an overseas landlord or someone working alone, this can be tough, especially when there are agencies out there who are ready to help you through this change.