The past few years have been busy for the rental sector. From the announcement of electrical regulations for rental properties in 2020, to the recent Renting Homes (Wales) Act coming into force in December 2022, plus a whole host of emergency pandemic legislation in between.
More significant changes for landlords and renters have been proposed through the likes of the Renters Reform Bill and Minimum Energy Efficiency Standards, but what can the property sector expect from 2023?
March 2023 – End of rent freeze in Scotland
The rent freeze and eviction moratorium brought in by The Cost of Living (Tenant Protection) Bill 2022 is meant to come to an end on 31 March.
The rent freeze was announced in September 2022, preventing private and social landlords from increasing rent during a tenancy.
This is a provisional end date and (as we’ve seen before) it could be extended for a further two six-month periods.
April 2023 – End of second home tax ‘loophole’ in England
Second home owners can currently pay business tax instead of council tax for their property if it is advertised as a holiday let for at least 140 days a year – even if it’s not let at all.
This ‘loophole’ has been criticised as it reduces the property’s tax liability to zero if it has a rateable value of less than £12,000. The government launched a consultation in response back in 2018 to limit the number of properties qualifying for small business rate relief.
From April 2023, properties will be assessed for business rates only if the owner can provide the following evidence:
- The property is available for commercial let, as self-catering accommodation for short periods for a minimum of 140 days in the coming year
- The property was available for commercial let, as self-catering accommodation for short periods for a minimum of 140 days in the previous year
- The property was actually let commercially for at least 70 days as self-catering short-period accommodation in the previous year
April 2023 – Short-term let licence deadline in Scotland
On 1 October 2022, the laws around short-term lets changed in Scotland, requiring hosts to apply for a short-term let licence before receiving guests. In December, the Scottish government announced a one-off six-month extension to the legislation due to the pressures that the cost of living crisis has created for hosts and small businesses.
Existing hosts must apply for a short-term let licence by 1 April 2023 and can continue operating whilst their application is being processed. The application is made to the local authority, some of which have been given powers to create control areas to manage the number of short-term lets.
Find out whether you need a licence for your short-term let: Scotland Short-term Let Checker.
More information: Short-term Let Licensing: Guidance for Hosts
April 2023 – Increase in minimum EPC rating for commercial lets
From 1 April 2023, all commercially rented properties must have a minimum energy performance rating of ‘E’ or above.
The Minimum Energy Efficiency Standards increased the rating requirement for private rentals back in 2018. At the moment, only new commercial leases and renewals must have a rating of ‘E’, but this will apply to all commercial lets from April 2023.
The government have plans to raise the minimum to ‘C’ from December 2025 for new tenancies, and all tenancies from 2028, so landlords will be gearing up to make energy improvements to their properties soon.
June 2023 – Deadline for written statements under the Renting Homes (Wales) Act
On 1 December 2022, the Renting Homes (Wales) Act came into force, bringing major changes for landlords and tenants in Wales.
This includes the replacement of assured shorthold tenancies with occupation contracts, that must be issued as a written statement to the tenant. All new occupation contracts from 1 December must have a written statement.
Existing tenancies automatically converted to an occupation contract on this date. Landlords have until 1 June 2023 to issue a written statement of the converted occupation contract and are advised to do so sooner rather than later.
From 1 June 2023, landlords of Welsh properties must also ensure their properties have a professional electrical inspection and Electrical Installation Condition Report (EICR), smoke alarms on every floor and carbon monoxide alarms where required.
The new legislation has also changed the abandonment procedures, notice periods, rules regarding fitness for human habitation, and more. Read the full changes here: Renting Homes Wales Act: Guidance for Welsh Landlords and Tenants
Changes for landlords: Renters Reform Bill
The Renters Reform Bill was announced in June 2022, as part of the government white paper: A Fairer Private Rented Sector.
The white paper details the government’s commitment to “deliver a fairer, more secure, and higher quality Private Rented Sector” and is expected to be the “biggest shake-up of the rented sector for 30 years”.
The Bill proposes some major changes, including a new mandatory Ombudsman for landlords and renters, improving property safety with the Decent Homes Standard, and the abolition of Section 21.
There are no dates for when these changes will come into force, but further announcements from the Department of Levelling Up, Housing and Communities are expected in 2023.
Changes for landlords: Increasing licensing schemes
Selective and additional licensing schemes ensure landlords must apply for a licence to rent out properties in certain areas. More and more schemes have been introduced over recent years, with over 50 new schemes and consultations launched in 2022 alone in Greenwich, Oxford, Leicester and other areas.
Birmingham City Council is set to introduce a selective licensing scheme in June 2023, applicable to over 40,000 rented properties and becoming the largest scheme in the UK. The scheme is set to target areas where rentals make up over 20% of properties or there are high levels of deprivation and crime.
What do landlords think?
What do you think of the changes in store for landlords and renters in 2023? Share your thoughts in the comments.