Last year was a tough one for us all - not least landlords. As many tenants struggled to pay their rent, landlords often bore the brunt; unable to proceed with evictions or access financial support schemes. As we enter 2021, under increasingly tough lockdown rules, consumer organisation Which? highlights the key things landlords need to understand.
1 Most notice periods are longer
While the ban on evictions was lifted in September, longer notice periods were introduced in most cases. Landlords in England and Wales must give six months’ notice to vacate a property, except in certain circumstances such as anti-social behaviour, domestic abuse or pre-existing arrears. The change is currently set to last until 31 March - but check the government website to keep up with developments.
2 The abolition of Section 21 evictions hasn’t gone away
The government pledged an end to no-fault evictions in its 2019 election manifesto and has consulted on the issue. The Renters Reform Bill is likely to have brought in the change but was shelved during the pandemic. Other proposed changes in the bill include portable ‘lifetime deposits’ and a publicly-available rogue landlord database. It is possible the bill could return to parliament later this year.
3 A stamp duty surcharge for overseas buyers is coming
From 1 April, non-UK residents will have to pay an additional 2% in stamp duty when they purchase property in England - this is on top of the existing 3% second homes surcharge. UK residents are defined as people who spend at least six months in the country before or after buying the property.
4 A review of capital gains tax (CGT) is on the way too
The chancellor is currently reviewing CGT proposals by the Office for Tax Simplification, which could affect landlords who sell their properties. The changes would bring CGT rates in line with income tax and reduce the current tax-free allowance.
5 Electrical safety rules have changed
Stricter rules on electrical safety inspections were introduced for new tenancies in July. The change means your property’s electrics must be inspected and tested every five years and a copy of the report given to your tenants. It’s worth noting that from 1 April 2021 existing tenancies will be subject to these rules too.
Read more of the issues landlords should look out for in 2021 on the Which?