5 Changes for Landlords in 2021
The coronavirus had a significant impact on the property market and the economy. As a result, many landlords have felt the need to temporarily reduce rents, while some other have found it difficult to evict non-paying or anti-social tenants because of the ban on evictions, which was effective from September 2020.
For landlords in particular, there are a few important key dates to note in 2021 so that you can prepare for any future changes.
Eviction Legislation Changes
Given the situation with the pandemic, landlords are currently legally obliged to give six months’ notice for all evictions. Although there are certain circumstances where there are caveats for this, such as in cases where there is domestic abuse, anti-social behaviour, or where a tenant is owing more than six months’ worth of rent arrears, this new law has made it more difficult for landlords to evict tenants.
This law is stated to be effective until at least 31st March in 2021, so this is an important date for landlords to note down.
The Renters’ Reform Bill
As part of the Queen’s speech on 19th December 2019, the Renter’s Reform Bill was announced which will introduce significant changes to the lettings process, including:
- Removing Section 21 from the Housing Act 1988 - Currently, landlords are able to regain possession of their rental properties by issuing tenants a Section 21 notice at the end of their fixed term tenancy or a periodic tenancy. The Section 21 notice will give the tenant a certain amount of time to vacate the property. Under the new rules that have been introduced during the pandemic, tenants have six months. The new bill means that ‘no-fault’ evictions and the Section 21 notice from the Housing Act 1988 will be removed. As a result, landlords would need to regain possession of their rental property through the court system.
- Lifetime Deposits - The lifetime deposits will replace the individual security deposits which means that tenants will be able to transfer their deposit from property to property. When moving rental homes, tenants won’t have to save up for a new deposit.
- Accessible Rogue Landlords Database - This bill also proposes to make the government’s database of rogue landlords to be accessible to agents, landlords, tenants, employers, and professional bodies.
New Stamp Duty Rates for Overseas Investors
There will be new rules coming into force on 1st April 2021, affecting both freehold and leasehold properties. These new rules will mean that overseas investors who do not reside in the UK will need to pay an additional 2% in stamp duty on residential properties in the UK.
Currently, non-UK residents are paying the same Stamp Duty rate as UK residents. This additional fee has been introduced in order to raise more money to help deal with homelessness and rough sleeping in the UK.
You can read more information about the new rates of Stamp Duty for non-UK residents here.
New EICR Rules Become Mandatory
Since the 1st July 2021, landlords with properties in England have been required to conduct electrical installation condition reports (EICR) before they can let their properties. The report needs to also be given to all tenants and any remedial work that is needed should be carried out.
These electrical checks ensure that all of the electrical installations in the property are safe for use before a tenant moves in, such as the light fixtures and wall sockets. Properties that successfully pass the EICR will be able to keep the certification for give years. Once this period has expired, a new certificate will be needed.
This requirement will become mandatory for all tenancies from 1st April 2021.
‘Making Tax Digital’ System
The new system, ‘Making Tax Digital’ is an essential component to the government’s plans for making it easier for individuals and businesses to get their tax right.
At some point in 2021, Landlords with a rental turnover of more than £85,000 will be required to switch over to the Making Tax Digital (MTD) system. The mandatory switch date for landlords with turnovers of more than £85,000 has not been confirmed yet, but is expected to take place in 2021.
Essentially, this system means that landlords would file four quarterly submission on their income and expenses, rather than an annual tax return.
Contact Hadleigh Estate Agents for Properties To Let
If you’re looking for a property to let in Birmingham, then please get in touch with our property experts. With years of experience in lettings, we are a market leader in the Harborne and Edgbaston area. Our friendly, experienced, and qualified team of estate and letting agents like to take the time to understand your needs to find out exactly what you’re looking for in a property.
Call our lettings team on 0121 426 3220 or you can send us an email here.