New landlord rules and announcements are on the cards for 2022. Tax changes, licensing for short-term Scottish lets and amended rules for smoke and carbon monoxide alarms are confirmed – but what other property-related news can owners and investors expect this year?
Latest article: Renters Reform Bill White Paper – What You Should Know
- Capital Gains Tax
- 6-month evictions ending (Scotland)
- Temporary Right to Rent checks ending (England)
- Making Tax Digital
- Renting Homes (Wales) Act 2016
- Short-term let licensing schemes for (Scotland)
- Regulation of holiday lets consultation (England and Wales)
- Changes to smoke and carbon monoxide alarms (England)
- Renters’ Reform Bill: Section 21 and Lifetime Deposits (England)
- Changes to Minimum Energy Efficiency Standards (England)
- Introduction of Regulation of Property Agents (RoPA)
- Pet-friendly tenancies and new landlord rules
Extended reporting time for Capital Gains Tax
Changes to the reporting deadlines for Capital Gains Tax were announced in the chancellor’s Autumn Budget last year.
Property sellers will now have 60 days to file and pay their Capital Gains bill, rather than the previous 30 days. This change has been welcomed by many and was influenced by a report from the Office for Tax Simplification stating the 30-day deadline was proving difficult for taxpayers.
This officially came into effect on 27 October 2021 and applies to any properties sold after this date.
Related article: Levelling Up for Landlords 2022: Government White Paper for Landlords and Renters
March – End of 6-month eviction notices in Scotland
Under the Coronavirus (Scotland) Act 2020, landlords must give six months’ notice to evict their tenants. This is set to end on 31 March 2022 but could be extended to September 2022. Alternatively, the temporary measures could be ended early if the Scottish parliament agrees it’s no longer required, though this is unlikely.
When the measures do end, notice periods will return to their original length. For most tenancies in Scotland, this will be 28 days when less than six months into a tenancy, or 84 days after six months.
April – End of temporary Right to Rent checks in England
In March 2020, the rules on Right to Rent checks were changed to help landlords and tenants stay safe during the pandemic.
To reduce in-person interactions and physical contact, tenants have been allowed to show their original Right to Rent documents over video call and share scanned or photographed copies with landlords and agents.
The online Right to Rent service has also been made available for tenants with:
- Non-EEA citizens with a current biometric resident permit or card
- EEA citizens and their family members with status granted under the EU Settlement Scheme
- A digital Certificate of Application to the EU Settlement Scheme issued on or before 30 June 2021
- those with status under the points-based immigration system
- British National Overseas (BNO) visa; or
- Frontier workers permit
The online service allows tenants to view their own Home Office right to rent record, then share it with the landlord via a share code. The landlord can enter the code and the tenant’s date of birth and view their right to rent information here: GOV.UK View a tenant’s right to rent in England.
The temporary changes to Right to Rent measures are scheduled to end on 5 April 2022 – but may be extended further. The government is intending to move all Right to Rent checks to the online service, but this is currently only available for non-British citizens. There has been no announcement as to when the online service will be available for all nationals – but the government may choose to extend the temporary COVID measures until the online service is ready for everyone.
April – Making Tax Digital for VAT
On and after 1 April 2022, all VAT-registered businesses with a taxable turnover of less than £85,000 will be required to keep tax records and submit their VAT returns digitally. This is already the case for businesses with taxable turnover above £85,000 – but will be rolled out to all businesses in April 2022.
Learn more about Making Tax Digital.
July – New landlord rules and Renting Homes (Wales) Act 2016
The Renting Homes (Wales) Act 2016 will come into effect on 15 July 2022. The law aims to increase protection for renters and make it easier to rent a home in Wales.
Changes include the replacement of assured shorthold and assured and secure tenancies with new occupation contracts, as well as the dual categorisation of landlords: community landlords (council and housing association) and private landlords (any other landlord).
There will also be new rules for serving notice:
- The notice period for ‘no fault’ evictions (currently known as Section 21) will be six months
- Evictions on ‘no fault’ grounds will not be permitted until 6 months after a contract starts
- Landlords must meet certain obligations to serve a ‘no fault’ eviction notice, such as registration, licensing, deposit protection and health and safety provisions
- Break clauses will only be allowed for fixed-term occupation contracts of 2 years or more and the break clause cannot be exercised for the first 18 months
October – Short-term let licensing schemes for Scotland
The Scottish government is introducing local licensing schemes for short-term rental properties. The move has come as a response to the increasing rents and complaints of disruption in popular tourist areas with many holiday lets.
Legislation allowing local councils to create “control areas” for short-term lets has been passed, with one proposed for Edinburgh. The city is home to a third of Scotland short-term lets and has seen a significant rise in the past five years – particularly with online platforms like Airbnb.
Under the new proposal, property owners must get permission to run a short-term let. The council will decide the suitability based on density, residential amenity and housing shortages in the area. It’s not known when exactly Edinburgh’s “control area” will launch, but the new bill (if passed) will see local councils drawing up short-term licensing schemes by October 2022.
Existing hosts and property owners will have until April 2023 to apply for a licence per property. All short-term lets in Scotland will require a licence by July 2024.
Consultation on the regulation of holiday lets for England and Wales
A government consultation regarding the regulation of holiday lets in England is expected this year. The consultation will look at the impact of short-term lets and will discuss the concept of a mandatory register for holiday rentals in England.
Increasing council tax rates for short-term rentals have been proposed – and are already being considered by the Welsh government, who ran a similar consultation in 2021.
New landlord rules for smoke and carbon monoxide alarms in England
Amendments to the smoke and carbon monoxide alarm rules for landlords are expected this year. 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, such as a log burner.
The new landlord rules – in force from 1 October – will require social landlords to have a smoke alarm on every floor, not just private landlords, as well as a carbon monoxide alarm in any room with a fixed combustion appliance (such as a gas boiler or fire).
Tenants will still be responsible for testing alarms during the tenancy, but landlords will now be required to fix or replace any faulty alarms as soon as they are informed.
It is fundamentally right for people to feel safe in their own homes – an issue I’ve advocated for many years.
Around 20 people are killed each year in accidental carbon monoxide poisoning, and many more through house fires – but we know that simple interventions can stop these needless deaths.
I’m proud that the new rules being proposed will ensure even more homes are fitted with life-saving alarms. Whether you own your home, are privately renting or in social housing – everyone deserves to feel safe and this is an incredibly important step in protecting those at risk.Eddie Hughes, MP, Minister of Rough Sleeping and Housing
Progression of Renters’ Reform Bill: End of Section 21 and introduction of lifetime deposits
A white paper on the Renters’ Reform Bill originally planned for autumn last year is expected in spring. The bill is set to abolish Section 21 of the Housing Act 1988 which currently allows tenants to be evicted in a rolling periodic tenancy or at the end of a fixed-term tenancy without giving a reason.
Read the Renters Reform Bill White Paper.
Instead, the bill proposes strengthening the grounds of Section 8 – improving the grounds possession and the overall court process.
David Cox, Legal and Compliance Director of Rightmove, commented:
“Depending on what the government come forward within the Renters’ Reform white paper, [the abolition of Section 21] might actually be better for us going forward.”
“We hold onto Section 21 because that’s what we’ve had, but it’s not the best system. It hasn’t ever been the best system because you basically have to take the view of ‘I’m going to lose all my money, I’ve just got to get the tenant out”.
“Whereas if we have a reformed Section 8, where the landlord gets their money back or at least gets some of their money back, that could be better going forward, providing they fix the court system alongside fixing the law.”
If all goes well, the Renters’ Reform Bill could mean a specialist housing court with expert judges, making the process more consistent, quicker and less costly to landlords.
Lifetime deposits for tenants have also been proposed as part of the Bill. This will allow tenants to have a moveable tenancy deposit or “deposit passport” that is transferred from one landlord to the next without being returned to the tenant.
Announcement of expected energy efficiency changes
As part of the government’s 2050 net-zero emissions target, it’s expected that the minimum energy efficiency standard for rentals will be raised to ‘C’ by 2030.
This information was leaked in October last year, but an official announcement is expected at some point this year.
It’s anticipated that the minimum energy standard will be raised to ‘C’ for new tenancies in England as of April 2026, followed by all existing tenancies in April 2028.
The current standard is ‘E’ or above – with a spending cap of £3,500 for improvements. The spending cap will be increased to £10,000 per property – meaning landlords may have to undertake bigger works, such as external solid wall insulation, to meet the energy requirements.
The new landlord rules could prove costly, particularly those in rural areas and in the north – where there are many pre-1919 properties with low energy performance ratings. Landlords may be able to seek funding from local authorities, energy companies and charities, such as National Energy Action and Energy Savings Trust.
This information has not been formally released by the government, but an announcement this year is highly likely.
Introduction of Regulation of Property Agents (RoPA) in England
In 2019, a regulatory framework for property agents was published. The Regulation of Property Agents: Working Group Report examined a model for an independent property-agent regulator to raise the standards in the sector, including a Code of Practice and minimum entry requirements for property agents.
Government response to the report has been delayed over the last two-and-a-half years due to coronavirus regulations, but is still expected. A white paper could be published by the end of the year but may be delayed until 2023.
Recommendations in the report include:
- Individual licenses for practising agents
- Licensing for companies
- CPD requirements for agents
- To be licensed, companies must be compliant in CMP, redress, insurance, ICO and AML (for sales)
For lettings, RoPA will only apply in England as Scotland already has Letting Agent Registration and Wales has Rent Smart Wales. RoPA will be UK wide for sales and auctioneering.
Pet-friendly tenancies in England
Last year, the government launched a new model tenancy agreement preventing landlords from issuing a blanket ban on pets. Allowing pets is now the default position and if a landlord doesn’t want their tenant to have a pet, they must object in writing within 28 days of a written request from the tenant. The landlord must provide a good reason, such as in smaller properties where owning a pet would be impractical.
Alongside the model tenancy agreement, a bill was proposed to parliament last year that will help responsible pet-owning tenants. The Dogs and Domestic Animals Accommodation Bill hopes to protect domestic animals by proposing a certificate of responsible animal guardianship requirement for all pet owners.
The certificates would be issued subject to a responsible ownership test, conducted by a registered vet, including:
- Microchipping (for dogs and cats)
- De-worming and de-fleaing
- Required vaccinations
- Ability to respond to basic commands
The Bill also proposes that all information regarding an animal and its ownership be entered into a database – including mandatory microchipping for all dogs and cats.
Currently awaiting its second reading, the Bill has not been passed but may move forward this year.
What are your thoughts?
How do you feel about the expected changes coming for the private rented sector? Share your thoughts in the comments below.