Mandatory five-year electrical checks are required

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There are heavy fines for those landlords who fail to have their rental properties tested by a qualified electrician before letting, and for existing tenancies, or if they fail to comply with any of the important recommendations made in a test report. The landlord will ordinarily have 28 days to make good any reported defects or needed improvements, unless the issue is dangerous, in which case it may be recommended the remedy is made sooner.

This article is
based on English law and is not a definitive statement or
interpretation of the law; rules change and every case is different –
ultimately only a court can decide. Other jurisdictions are similar
but there are important differences. Always seek expert advice before
making or not making decisions.

Local authorities have the power to issue a fine of up to £30,000 and where necessary may carry out any recommended remedial work itself and charge the landlord for this work.

The electrical safety regulations bring electrical testing in-line with the gas safety check regime in England and Wales and the electrical regulations already operative in licensed Houses in Multiple Occupation (HMOs), as well as the electrical testing regulations in operation in Scotland.

Not all tenancies are affected by the regulations, excluded ones include:

• social
  landlords
• resident
  landlords, where the tenant lives in the same building.
• Landlords with
  lodgers
• long leaseholds
  and tenancies in excess of seven years or more.

• student
  lettings in halls, hostels, refugee care homes, hospitals or
  hospices.

Included in the checks are all electrical wiring and all fixed electrical installations. The checks must be carried out by a competent person, usually a qualified electrician, who will produce an Electrical Installation Condition Report (EICR)a report which must be shown to tenants on entry to the property, or in the case of existing tenants, up to 28 days following the 5-yearly checks.

What the regulations require

Landlords of privately rented accommodation must:

• Ensure national standards for electrical safety are met. These are set out in the 18th edition of the ‘Wiring Regulations’, which are published as British Standard 7671.
• Ensure the electrical installations in their rented properties are inspected and tested by a qualified and competent person at an interval of at least every 5 years.
• Obtain a report from the person conducting the inspection and test which gives the results and sets a date for the next inspection and test.
• Supply a copy of this report to the existing tenant within 28 days of the inspection and test.
• Supply a copy of this report to a new tenant before they occupy the premises.
• Supply a copy of this report to any prospective tenant within 28 days of receiving a request for the report.
• Supply the local authority with a copy of this report within 7 days of receiving a request for a copy.
• Retain a copy of the report to give to the inspector and tester who will undertake the next inspection and test.
• Where the report shows that remedial or further investigative work is necessary, complete this work within 28 days or any shorter period if specified as necessary in the report.
• Supply written confirmation of the completion of the remedial works from the electrician to the tenant and the local authority within 28 days of completion of the works.

New checks and a new report will need to be produced on or before the fifth anniversary of the previous checks, unless the landlord makes changes to the electrical wiring or installations in the rental, in which case earlier checks will be needed.

As with gas safety checks, landlords will need to produce and supply to tenants the correct documents, including the electrician’s report prior to any lettings, otherwise they may be unable to peruse a possession claim if the need arises and the landlord’s insurance may be invalid. Similarly, agents will refuse to let properties lacking the correct documentation.

Landlords need to plan ahead to balance their cash flows in case remedial action is needed to bring electrical systems up to current standards, with the potential cost involved.

Most landlords will appreciate the importance of having their wiring and installations, just as their gas systems, safe and free from defects. Most will be brought up to modern safety standards relatively inexpensively.

These new regulations replace the previously existing regulations for houses in multiple occupation (HMO) to have the electrical installations tested.

Should tenants refuse landlords access for inspections and any required remedial work, as with gas checks, the landlord could be considered to have breached this duty, even where the landlord has tried repeatedly to have the work done. It is important therefore to keep the local authority informed if this is the case, preferably in writing.

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Council makes extraordinary request asking landlords to pay for student mess

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Durham city’s parish council has taken the unusual step of asking student landlords to make a voluntary donation towards the cost of cleaning up street waste and discarded furniture.

It will ask for a contribution of £52 towards its precept from student landlords to match the amount paid by ratepayers.

More than 4,340 properties are registered as student properties in the city and therefore exempt from paying council tax; the authority reports that these exemptions cost it £8.7 million in lost council tax revenue.

The move comes after mounds of discarded waste and furniture were dumped in the streets when students left their homes last year.

Chairman, councillor Alan Doig, says: “This parish council has the responsibility of helping to maintain our beautiful parish on behalf of every resident, student and non-student alike.

“This is why we are asking all student landlords to share with us a shared commitment to maintain the attractiveness of our environment by making a contribution to our precept, so helping us deliver these vital projects for our community.”#

Landlord support

The plans are also supported by student landlord and fellow parish councillor, Helen Weston (pictured), who adds: “As a fellow student property owner myself, I fully endorse the work of the parish council to safeguard the residents of this city and to ensure that the city is kept clean and enjoyable for all.”

The money raised will be invested in projects such as paying for more neighbourhood wardens, according to The Chronicle.

The council will write to all landlords later this month with the request and will publish the contributions made to highlight good landlords.

View Full Article: Council makes extraordinary request asking landlords to pay for student mess

More landlords moving to limited companies as list tops 60,000

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The number of VAT and/or PAYE enterprises operating in the UK’s residential and commercial rental sectors climbed 2% in the past year, despite the government’s best efforts to deter investment.

Analysis of government data by debt advisory firm Sirius Property Finance reveals that there are now 60,000 businesses in the sector, representing five-year growth of 12%.

London continues to be the rental investment capital with 12,160 rental businesses, accounting for one fifth of the UK total, while the South East (13%) and North West (10%) are also among the most prominent regional markets.

Sirius reports that the North East is home to the lowest proportion of buy-to-let enterprises, accounting for just 2%. In the past 12 months, Wales has seen the biggest increase in businesses (3%), while the North West leads the way in terms of five-year growth at 15%. 

Tax and CGT

Head of corporate partnerships, Kimberley Gates, says the UK’s buy-to-let sector continues to grow despite recent changes to capital gains and tax allowance rules. 

She explains that although demand for rental homes remains profitable, many landlords have decided to set up their own businesses in order to further improve profitability, which is driving the increasing number of companies operating in the sector.

“It would be bold to predict anything other than continued growth in the buy-to-let ecosystem over the coming months and years,” adds Gates, “especially in densely populated urban areas, because as long as home ownership continues to be so incredibly expensive, rental demand will always be strong.”

View Full Article: More landlords moving to limited companies as list tops 60,000

Revealed: The most appealing cities for young renters

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The most appealing cities for young renters to enjoy jobs, socialising and low rents have been revealed – and there are some unlikely destinations in the top 10.

The research from Comparethemarket found that Nottingham, Southampton and Coventry are the UK’s most appealing cities for young adults.

View Full Article: Revealed: The most appealing cities for young renters

Council tries AGAIN to start UK’s most controversial licencing scheme

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Luton Council is making yet another attempt to bring in two new licensing schemes after a string of false starts amid landlord opposition.

Its overview and scrutiny board has agreed to recommend a town-wide additional scheme as well as a selective scheme in South ward, which now need executive approval and could be up and running by July.

The authority tried to introduce a scheme in 2018 after its previous additional licensing scheme ended, but faced significant local opposition and went silent about its plans until December 2019.

But campaign group Luton Landlords and Letting Agents Ltd – made up of agents, landlords and concerned residents – launched a legal challenge, forcing the council to admit errors and the scheme was put on hold. It last announced new plans in January 2022, but they failed to materialise.

Service director housing Colin Moone told the board meeting there were 4,500 HMOs in the town, with more than 3,800 falling outside of the mandatory licensing scheme, reports Luton Today.

Legal challenge

Although he said it had got everything right, there was likely to be another legal challenge.

“There are landlords vehemently against licensing who believe we’ve got powers currently and don’t need this scheme,” he explained. “This is the third attempt in the last three years. A core set of landlords definitely aren’t supportive.”

Moone (pictured) told councillors that fees of £488 would remain the same because it did not want to put more pressure on private tenants. He also assured them that the council had sufficient resources to enforce take-up of the schemes.

He added: “If we have to do a blitz one day or one evening around HMOs, we’ll consider how. If not enough landlords register, we’ll need to decide how we go about getting those HMOs.”

View Full Article: Council tries AGAIN to start UK’s most controversial licencing scheme

Renting Done Right manifesto is officially launched

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A manifesto calling on the government to rapidly step up its support for the lettings sector has officially been launched.

It’s the brainchild of rentech firm Goodlord and is called Renting Done Right.

The firm says the manifesto has been created after discussions with focus groups and roundtables involving more than 1,500 agents

View Full Article: Renting Done Right manifesto is officially launched

Slide in house prices is accelerating

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The UK’s house prices fell for the third consecutive month as prices slumped 0.3% between January and February, the Office for National Statistics (ONS) says.

Its data also reveals that average house prices grew 5.5% in the year to February – that’s down from January’s figure of 6.5%.

View Full Article: Slide in house prices is accelerating

BREAKING: ‘Reinstate mortgage interest tax relief for landlords’, report urges Ministers

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Landlords and letting agents have told a new poll that the Government must reverse its Section 24 mortgage interest relief tax changes as a priority to get the private rental sector ‘back on track’.

Rent tech platform Goodlord conducted the research among some 1,500 agents, landlords and tenants and has today published it within its report Renting Done Right.

The report calls for more industry support from Government, a simpler approach to compliance, more clarity on regulation and when it’s being introduced and to reward effective landlords with tax incentives.

Some three quarters of landlords said financial incentives should be the Government’s top priority to keep landlords in the sector, although HMRC recently defended its ‘levelling-up’ tax relief changes.

As regulatory requirements build across the sector, landlords – especially those with only one or two properties – are seeking additional support, the report says.

Nearly two thirds of letting agents surveyed said they are seeing more landlords turning to them for support with compliance.

Thorny issue

But the thorny issue of ‘overbidding’ on properties is also raised by the report, in which 83% of tenants said there should be a cap on how much homes can be bid for above the listed price, something half of the agents canvassed agreed with.

Tenants also reckoned rent controls were a ‘good idea’ but 40% of landlords and agents said it would be damaging not helpful to the sector.

The manifesto is being officially unveiled at an industry event in London this evening.

The findings will then be shared with decision makers at the Department for Levelling Up, Housing and Communities.

William Reeve, CEO at Goodlord, says: “This manifesto is the result of months of work and in-depth discussions from across the letting industry.

“We hope this manifesto helps unlock conversations that help make renting better. The time to act is now.”

Read the full manifesto here. 

View Full Article: BREAKING: ‘Reinstate mortgage interest tax relief for landlords’, report urges Ministers