Our helpful guide to new lettings laws
Last year landlords were hit by a veritable landslide of new legislation, from the tenant fee ban to changes in mortgage interest tax relief. Here are the most important ones for landlords to make a note of.
Tenant Fee Ban
As of June 1st 2019, the tenant fee ban has come into effect. A tenant’s security deposit is now capped to 5 weeks worth of rent regardless if they have a pet. If the rent for the property is over £961.54 per week (£50,000 per annum) then the agent and landlord can ask for 6 weeks worth of rent. In addition, letting agents are no longer allowed to take more than a week holding deposit to remove the property from the market. These rules have made it more important to check tenant references and have contracts signed as soon as possible to minimise risk.
HMO Licensing
Laws for housing multiple occupants have changed drastically. Previous laws stated that a house must have shared facilities with at least 3 storeys and 5 tenants for it to be eligible for an HMO license. As of October 2018, the requirement of having 3 storeys has been removed. Depending on the borough that your property is located in, some councils also require you to obtain an HMO license if you’re renting to two or more households.
Homes Act
From March 20th, the Homes Act will amend the existing Landlord and Tenant Act 1985. It requires landlords to ensure their home is free of hazards and fit for human habitation. If your property breaches this legislation, then you could be taken to court by your tenants.
Eco-Friendly Standards
On April 1st, legislation passed that requires all new private properties for rent to have a minimum of an E on their Energy Performance Certificate rating scale. After April 1st 2020, all rental properties with F or G ratings will be considered unlawful. When discovered, a rectification order will be issued and legal action with fines will follow if ignored. Fines are expected to be £5,000 per failure.
Client Money Protection Scheme
On April 1st, the client money protection scheme came into effect. This means all private sector agents must join an approved government CMP scheme or else they’ll face a fine. Agents have to meet several standards set by the government in order to be a part of the scheme.
Mortgage Interest Tax Relief
Before 2017, landlords were able to deduct 100% of their mortgage payments from their rental incomes, reducing their income tax liabilities. Since then, the government has started phasing out these reductions. For full details and numbers, check out the full article where we break down the changes per year and the proposed changes for 2020-2021.
As a professional estate agent with years of experience, Lurot Brand takes laws and regulations seriously. If you’ve got any questions regarding the purchase or sale of a home, feel free to get in touch and we’d be glad to assist you.