Everything you need to know as a Landlord in 2023
It’s safe to say that 2022 was a turbulent year for the housing market. With three different prime ministers, a variety of economic budgets and an ever-changing influx of legislation, it can be hard as a landlord to know where you stand. This blog is aimed to prepare you for what’s to come in 2023. Of course, if you’re looking to take the stress out of letting a property entirely, take a look at our property management services.
The Renters Reform Bill
Probably the most important and wide-ranging piece of legislation to be announced is the renters reform bill, which will see the government taking more of an active role in the private rental sector. First pledged in 2019 by Theresa May’s government, the bill has yet to have been passed. However, after speculation that the bill was to be scrapped, in November 2022 it was stated by Michael Gove that the bill would be introduced in 2023.
Covering a number of issues, from keeping pets to outlawing blanket bans, this bill will be hugely influential if you are currently a landlord, or are looking to become one in the near future. Aimed at improving the quality of properties available to renters, this legalisation will provide more security, more flexibility, and a better standard of living for everyone.
What changes does the bill propose?
End of no-fault evictions
Under the new law, landlords would no longer be able to hand a section 21 notice to tenants at the end of a fixed term tenancy or during a periodic tenancy. This would mean that landlords can no longer remove tenants from their properties without cause unless their contract is finished. Tenants will be able to feel secure in their living situation without the worry of a surprise eviction.
Decent Homes Standard
This is an active policy, but one that only applies to social housing currently. The Renters Reform Bill would extend this to apply to private rentals as well. For landlords that have properties of a high standard, there won’t be any changes to be made. However, the new policy is designed to reduce the number of sub-par properties that are considered uninhabitable and a hazard to tenants’ health. The new rules would require properties to have adequate kitchen and bathroom facilities, heating and be warm and dry, to name a few aspects.
New Limits on Rent Increases
This change is especially poignant with the cost of living and energy crisis that has been affecting rent prices in the UK, and especially in London. The legislation is designed to protect tenants from unfair and arbitrary rent increases by making it illegal to increase the rent more than once per year. It also limits the amount of rent that landlords can ask for in advance at the beginning of the tenancy. When rent is being increased, a two-month notice will have to be given to the tenant(s).
EPC changes
EPC ratings for homes have been a hot topic, especially with many people attempting to save money by making their homes more energy efficient. As it stands, you can already apply for ‘green mortgages’, which offer better rates for properties with an energy rating of C or above. In the coming years, however, there will be more pressure on rental properties to keep up with environmental standards. By 2025, the minimum rating that landlords will legally have to achieve in order to rent out their properties will be C (whereas currently it is E). This will lead to higher standards in rental properties as landlords make renovations to improve their EPC rating.
Pet-friendly tenancies
One of the more surprising pieces of legislation to be introduced was regarding pet-friendly tenancies. If passed, landlords will no longer be able to prevent tenants from having pets in rental properties. However, if there is a valid excuse for not allowing one, such as allergies or certain furnishings, then an objection in writing can be made. A change to the Tenant Fees Act will allow landlords to request the tenant to take out pet insurance to cover any potential damages caused. Otherwise, every tenant will have a right to one. Landlords with furnished properties are advised to consider what measures they will need to take to accommodate for this change in legislation.
Any other changes?
Other pieces of legislation that are part of the Renters Reform Bill are an end to blanket bans, and a mandatory Ombudsman for any tenant-landlord disputes, which will make it much cheaper for both sides to settle issues.
With the huge rise in renting in London, the government saw the need to improve the quality of properties that tenants are living in, getting rid of the idea that a rental property will be in a worse state than a home that is owned and lived in. If you are a landlord yourself, and particularly a first-time landlord, it is important to keep up with the legislation changes being implemented, especially since many of them can be introduced without much fanfare.
Our advice is to prepare for these changes in legislation early to avoid getting caught out. For more information on landlord obligations, or on our property management services, contact us today.
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