Key changes for renters in 2021

Key changes for renters in 2021

A number of changes continue to take shape in the second half of 2021 impacting the rental sector. Here’s what you need to know if you’re a tenant or looking to find a rental home before 2022.

A Renters’ Market

The ongoing COVID-19 pandemic has led to a significant change in the rental market – most notably what renters are looking for in a property, with people now prioritising homes with gardens or balconies, and those in rural locations over those that are in cities or close to good transport links. This has resulted in an increase in rental prices in rural and out of city areas.

But the Stamp Duty Holiday (ending in September 2021) has sparked an increase in investors purchasing buy-to-let properties. This is good news for renters as it means renters should have more choice in the year ahead and a higher supply of available property will help keep rates lower. However, with extension ending on 30th June 2021 (extension from the previous deadline of 31st March 2021) the threshold will drop to £250,000 until 30th September 2021. Stamp duty thresholds will return back to normal levels from 1st October 2021.

Changes to Right to Rent

Currently in the UK, if you’re a Landlord, you must check all tenants’ immigration status to find out whether they can legally rent their property. This applies to all tenants, irrespective of ethnicity or nationality.

With Brexit bringing in a points-based system from 1 January 2022, Landlords have been told to continue using passports and National ID cards as an interim measure until 30 June. What happens then? We still don’t know but will keeping an eye out.

Your Money – Protected

All Letting Agents in England must belong to a Client Money Protection Scheme. This means your money, such as a deposit or monthly rent, is protected if the agent goes into administration. Agents must display a certificate showing which scheme they belong to, as well as including this information on their website.

Renters Reform Bill

Tenants are set to have more security as the government looks to end no-fault evictions (where a landlord doesn’t need to give a reason to evict their tenant) through the introduction of the Renters’ Reform Bill.

Delayed due to the Covid-19 pandemic, The Renters’ Reform Bill is officially back on the agenda with the Queen’s Speech last month confirming the Government’s intention to “enhance the rights of those who rent”. In the briefing notes to the speech, the Government announced that it would outline its reform package for the private rented sector in Autumn 2021- which is set to include abolishing Section 21 and the introduction of lifetime deposits – with legislation to follow in due course.

It contains several measures that would help tenants, including ending “no-fault evictions”, the introduction of a lifetime deposit scheme, and enabling tenants to transfer their deposit from one property to another. This is good news for tenants, as it gives them more security that they will not lose their home at short notice, while it should also help to ensure that all landlords meet high standards.

Changes to Planning Regulations

In a bid to stop developers from building homes without enough space or natural lighting, the Government is planning new legislation for minimum space and light requirements.

The proposed law will target developers using PDR (permitted developers rights), a fast tracking process which currently allows developers to transform buildings into homes without applying for full planning permission.

Deadline for Landlords to implement MTD (Making Tax Digital)

If you’re a landlord with a turnover of more than £85,000, you should be using MTD (making tax digital). The system requires you, the Landlord, to send HMRC quarterly updates of income and expenses via your digital tax account. This works out your tax as you go, so at the end of the year, rather than completing a tax return, you simply sign a declaration to say the numbers are accurate.

  • April 2022: MTD will be compulsory for businesses with a turnover below the £85,000 VAT threshold.
  • April 2023: MTD will apply to all taxpayers who file Income Tax Self-Assessment returns for business or property income of more than £10,000 a year

HMRC says that Making Tax Digital was introduced to get small businesses and the self-employed to keep and complete digital tax records and submit digital returns using compatible software. The eventual goal is for HMRC to go completely paperless.

Pets Welcome

Your right to have a pet as a tenant looks set to move closer in 2021, as the Dogs and Domestic Animals Bill continues to work its way through Parliament – currently in Stage 2 of the reading.

This Bill, if approved by parliament, would give tenants the right to keep dogs and other animals in rented accommodation as long as they are a responsible owner. There are plenty of stages for this to go through, so this will more than likely come nearer the end of 2021 or 2022.

If you’re keen to discuss any of these upcoming changes, please feel free to

Watsons Property

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