New legislation being introduced this year is set to present landlords and their tenants with new regulatory and financial challenges on top of the financial burdens of Covid-19, says independent property management agent.
There is a mix of new legislation being introduced early in 2022, and confirmation of other regulations that will be introduced over the following few years. Some of the new legislation that is due to introduced will not only add unwelcome costs to landlords' overheads, and subsequently impact rents, but they are also likely to change the working practices of many landlords.
2022 will see the introduction of several new pieces of legislation and confirmation of Minimum Energy Efficiency Standards that will present some serious challenges to landlords and their tenants
Robert Burdett, MD at James Leigh Property Management
February 2022: Energy Price Cap announcement expected
The energy price cap rise is due to be announced in February 2022 and to take effect in April 2022. This means that tenants' energy bills will rise. Landlords should be aware of this, and tenants are likely to ask why their energy bills are increasing. Understanding the changes means that landlords can provide the answers to their tenants, albeit unpopular. For landlords, it could be an opportunity to give some advice to tenants on how they can lower their energy consumption.
April 2022: Changes to Right to Rent Checks announced
Temporary measures announced to keep the rental market moving in the early stages of Covid-19 are due to end on the 1st April 2022. These included checks by video, use of photocopies and photos. the Government has already indicated that it wants to introduce a digital system, but has not provided any more information yet on what this will include.
April 2022: Making Tax Digital for VAT
This is due for introduction in April 2022, and while many businesses are already submitting VAT returns digitally, all businesses will be required to submit VAT returns using a suitable software package, and keeping digital VAT records.
These changes mean that the beginning of 2022 will be challenging for landlords. Most have already made numerous changes to look after their tenants who may have been suffering financial hardship, alterations to the way properties can be marketed and access requirements to keep people safe during Covid-19.
Announcements expected for future changes in regulation in the New Year include:
Early 2022: Confirmation on increase to Minimum Energy Efficiency Standards
There has been speculation over what these changes are likely to be, but it is expected that these will be confirmed during the early part of 2022. From April 2025 it is expected that new tenancies in rental properties will have to hold an Electrical Performance Certificate (EPC) rated C or above, and that from April 2028 the new standards will apply to all tenancies. Whatever the changes, they remain unclear at the moment, but it seems likely that they will be part of the drive to a net-zero economy.
Early 2022: Renters' Reform Bill White Paper
This is a significant piece of legislation that will affect the way landlords operate, and include the abolition of Section 21, the reinforcement of Section 8, Lifetime Tenant Deposits, and could include a Landlords' Register. This is a major change to the legislation governing the property rental market, including how landlords can evict their tenants. Landlords should keep an eye on this so that they are prepared for changes when they pass onto the Statute Book
Landlords are facing some major changes during 2022. It's important that they take the time to assess their businesses and ensure that they are taking the correct professional advice to implement new rules correctly. That's no small ask after all the emergency changes to legislation and the extra support that they have offered tenants, many of whom have suffered financial hardship, during Covid-19
Robert Burdett, MD, James Leigh Property Management
