What to look out for in 2022 - Landlord Rules

In 2022, the post-pandemic era, we can start to expect big changes to rules and regulations surrounding Buy-to-Let properties.

Capital Gains Tax

Changes to reporting deadlines were announced in Autumn last year. Essentially, Property sellers now have 60 days to file and pay capital gains tax, from the previous 30 days' notice. This has been overly welcomed by many and applies to any property sold after 27-Oct-2021.

Digitised VAT

After 1st April 2022, all VAT-registered businesses with a taxable turnover LESS than £85,000.00 will be required to retain all records (receipts, TAX invoices etc) and submit their returns digitally. This has always been the case with VAT registered businesses with a turnover OVER £85,000.00 (the VAT threshold) however, from this year, it applies to all VAT-registered businesses.

Fire Safety

Later this year, amendments to the smoke and carbon monoxide alarm rules are expected to be rolled out. Currently, private landlords are required to ensure all alarms are working at the start of the tenancy, have a smoke alarm on every floor, and a carbon monoxide alarm in ANY room with a solid fuel appliance. The amendments will include social landlords' properties, and, a carbon monoxide alarm in ANY room with a fixed combustion appliance.

NOTE: Tenants will still be required for testing alarms during the tenancy, but landlords will now be required to fix/replace faulty alarms as soon as the defect is known.

Progression of Renters' Reform Bill: End of Section 21

The announcement of a whitepaper expected to be published in Spring of 2022, has many intrigued of the longer-term outcome of the proposed changes, that effectively end the current bill of Section 21.

Section 21 allows tenants to be evicted in a rolling periodic tenancy or at the end of a fixed-term tenancy without giving a reason. Instead, the proposed bill proposes strengthening the grounds of section 8 - thus improving the grounds of possession of the property.

The general consensus is that should this bill be passed and we see introduced a reformed section 8, Landlords will get all, or the majority of their money/deposits back. In addition, this could also fix the court system, seeing expert judges in specialist housing court making the process more consistent.

Lifetime deposits for tenants have also been proposed as part of the bill, allowing tenants' deposits to be movable or, "transferred" from one landlord to the next without undue delays.

Change of Energy Efficiency Rating in Rental Properties

An official announcement is expected to be made later this year for the minimum energy rating standard, currently at "E" or above, to be raised to "C" for new tenancies in England from 2026, followed by all existing tenancies in 2028.

The current standard has a spending cap of £3,500.00 for improvements. The spending gap from 2026 is expected to be increased to £10,000.00 per property, allowing landlords to take advantage of improving the energy rating of their properties. However, this may also require landlords to undertake significantly bigger remedial works to meet the new minimum standards.

With an expected change in energy efficiency standards, Landlords are encouraged to seek funding and start remedial works to their properties in good time prior to the deadline.

Pet-friendly Tenancies in England

2020 saw the Government launch an updated model tenancy agreement that prevents Landlords from issuing blanket bans on tenants with pets. Allowing pets is now considered the standard (Default) option for all new tenancies'. However, should a landlord wish NOT to have their tenant to own a pet, the Landlord must object in writing within 28 days with good cause.

The model agreement bill was proposed last year in an effort to protect domestic animals and tenants with pets. This proposal works in conjunction with the proposed Dogs and Domestic Animals Accommodation Bill, requiring owners of animals to obtain a certificate of responsible animal guardianship. The certificate would be issued subject to a responsible ownership assessment, conducted by a registered auditor.

Although this is subject to further review, it could see animal owners being submitted to an ownership database offering a better practice of animal welfare and ownership.