Landlord’s Key Dates for 2020

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Rental Rules:

Here is a handy
guide to some key legal dates all landlords should have in their
diaries for 2020.

As the big build up
to Christmas begins, many landlords will be hoping for some
much-needed downtime over the festive period.

But, according to
Paul Barnes, Head of Dispute Resolution at Kirwans law firm, those
who can spare some time to look at the forthcoming regulatory changes
before the end of the year could safeguard themselves against
potential problems in 2020.

Paul says:

“From minimum
energy efficiency standards to tax relief, a number of legal changes
will take effect in 2020.

“For some
landlords, little work will be required to ensure they comply with
the new regulations, while for others, wholescale changes will be
required.

“Those who
familiarise themselves with the new rules now should have ample time
to put measures in place that will keep them on the right side of the
law.”

Here, Paul looks at
the top four legal changes to affect landlords next year:

1) Minimum energy
efficiency standards (MEES)

Most of us are by
now familiar with the minimum energy efficiency standards (MEES) that
came into effect in April 2018, which stated that new tenancy
agreements and renewals (other than some HMOs such as bedsits) must
have an energy performance certificate (EPC) rating of E or above.

By April 1, 2020,
however (or April 1, 2023 for commercial property) the regulations
will be extended to also cover existing tenancies. This means that,
under the new legislation, properties with an energy performance
certificate (EPC) rating of F or G will be classed as unrentable from
that date on.

But landlords can’t
rest on their laurels at that point; there are already whispers that
these standards could rise again in another couple of years, at which
point ‘D’ will be the minimum EPC rating, so it’s worth getting
your properties up to scratch now to prevent even more work later.

2) Electrical
installation checks

Last January, the
Ministry of Housing, Communities and Local Government (MHCLG)
announced that mandatory five-year electrical installation checks on
private rented housing in England would be introduced over a
transitional period of two years. The first year would see all new
private tenancies subject to the checks, while the second year would
encompass all existing tenancies too.

However, the
implementation date has not yet been clarified so, while it is still
unconfirmed as to exactly when this will begin, there is a good
chance that the legislation could be introduced at some point in
2020.

3) New tax relief
rules

There was a time
when private and individual landlords could claim tax relief on
mortgage interest payments and fees, as well as fees and interest
incurred on loans to buy furnishings.

Then, in 2015, the
government made property rentals a much less viable option for many
when they announced that this was to be phased out.

In 2017-18 the
process began, with claimable tax relief reduced to 75 per cent, and
so the reduction continued through 2019-20. In 2020-21, landlords
won’t be able to claim any tax relief on mortgage interest payments
at all.

Instead, from April
2020, landlords will receive a 20% tax credit on their interest
payments; not great news for those in the higher tax bracket –
which could now include landlords who will have to declare the rental
income that they previously used for interest payments.

Many landlords are
now setting up limited companies when buying new rental properties in
order to avoid the higher individual rates, but there’s no
guarantee that the rules won’t change to affected limited companies
in the future.

4) Changes to
Private Residence Relief

From April 2020,
changes to Private Residence Relief mean that landlords will lose
nine months’ worth of Capital Gains tax relief when they come to
sell.

While at the moment
landlords can claim Private Residence Relief for all the time they
lived in their property before letting it to tenants, plus an extra
18 months after moving out, this final exemption period will be
reduced next April to the time they lived in their property plus just
nine months post-moving out.

In addition,
landlords who rent out a property that was once their main home will
see the £40,000 worth of lettings relief they currently enjoy
scrapped as, from April, only landlords who share an occupancy with
their tenants will be able to claim. The deadline for payment of the
Capital Gains Tax bill will also change from April 2020, from January
31st in the year after the tax year they made the sale, as it is now,
to within 30 days of the completion of the sale.

So, if you’re a
landlord thinking of selling up, it might be worth seeking legal
advice about doing so sooner rather than later.

Kirwans Solicitors

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Leasehold risk for over 55s

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More than half of older homeowners who own one of the 2.3 million leasehold properties in England and Wales would consider buying the freehold or extending the lease suggests new research* from independent equity release adviser Key.

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Call of the week – Bailiff wait times

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Serving notice and the correct processes and procedures are among the most common topics dealt with by the RLA advice team. It may surprise some that even when you obtain the possession order, there is still another step to complete before you can regain possession of your property. This final step is to apply for […]

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Nationwide, Crisis, and Generation Rent support scrapping Section 21

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The Nationwide Building Society has reported on an event held by players in the rental and housing sector, with the main outcome being that organisations must work more closely together in order to effect meaningful change.

The industry roundtable was attended by representatives from across the private rented sector including Nationwide Building Society

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Landlord Law Training Bundles – Black Friday Deals

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Landlord Law are offering special online training discounts before Midnight on 29 November 2019 with savings up to 50% off the full price.

Click Here to see the offers available and download the courses

I have been taking Tessa Shepperson’s thoroughly well put together Landlord Law courses myself this month and I can confirm they are excellent.

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Cut through the noise to landlord issues

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On 12th December the British people will once again vote for who should lead our country and break the Brexit deadlock, which has dominated the headlines for the best part of three years. However, as one of the most unpredictable elections in recent history

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Deposits to be made transferable between landlords

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Tenancy Deposits:

In a move that would
help tenants who struggle finding deposits when moving to new
rentals, The Conservatives have announced they will bring in
legislation to enable deposits to be transferred, termed Deposit
Passporting.

It is estimated
there are around 4.7million tenants who have to find on average
around £1,000 to put down as a deposit each time they move and enter
a new tenancy. This money is required up-front, and often, because
of delays and getting an existing deposit paid back, they have to
find new money.

For those who
struggle to raise these large sums, and to pay for the first month’s
rent as well as the security deposit, sometimes running into
thousands in the capital, this news will provide them with a boost
and a relief.

The Tories are
anxious to do all they can and help renters, knowing they now
represent a growing cohort of young voters, so moves like this, they
think, will prove very popular.

The idea is that
tenants would be able to transfer their deposit from an existing
landlord direct to a new landlord, without having to find a new lump
sum themselves, apart from topping up any increase.

The Tories think the
main beneficiaries will be those on low incomes, students and
retirees who traditionally would find it hard to find these large
sums of money at the start of a new tenancy.

Landlord groups and
representatives have welcomed the move, but are concerned about the
mechanics of the scheme and how this would work out in practice. For
example, what if there’s a dispute over damage claims?

But landlords
acknowledge that anything that makes it easier for tenants to obtain
a new tenancy with sufficient and readily accessible funds, can only
be a good thing.

The Ministry of Housing, Communities and Local Government (MHCLG) opened a consultation on the necessary reforms to tenancy deposits that will help tenants move more easily which closed on 5 September 2019. The consultation exercise will be evaluating the feasibility of passporting deposits when tenants are changing tenancies.

The National
Landlords Association (NLA) has emphasised that deposit passporting
needs to be carefully designed to ensure that landlords are not
disadvantaged from making valid claims against their tenants’
security deposits.

Chris Norris,
director of policy and practice at the NLA, said:

“We must make sure
that adequate thought is given to the needs of both tenants and
landlords. Everyone agrees that moving between tenancies should be
made easier and cheaper, but we also need to recognise why landlords
take deposits. A deposit protects against damage or default, so
landlords must be confident their costs are covered before releasing
the tenants’ money.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Deposits to be made transferable between landlords | LandlordZONE.

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HMRC guidance on avoiding self-assessment tax scams

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As millions across the country will be completing their self-assessment tax returns soon in the run up to the 31 January deadline, HMRC has published guidance on how to avoid being scammed. Over the last twelve months, HMRC received nearly 900,000 reports from members of the public about suspicious HMRC contact, including phone calls, texts […]

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Wales: Holding deposit information regulations should be withdrawn and amended-RLA

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The RLA is warning that regulations that have been laid relating to the information landlords and letting agents must present to prospective tenants before taking a holding deposit are flawed. Last week, the Welsh Government laid regulations on holding deposits information. The Renting Homes (Fees etc.) (Specified Information) (Wales) Regulations 2019 ask for the “name, […]

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My campaign against Labour’s housing policies

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I have set up a Facebook campaign defending property rights and attacking Corbyn’s housing policy. I am worried that:

– Colossal borrowing will push up interest rates, making mortgages unaffordable for ordinary people
– Rent caps will destroy the private rented market
–

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