In the wake of covid and with new rules and regulations on the cards, we look at four issues for landlords in 2022.
It’s been a strange couple of years for landlords, and while demand for rental properties is rocketing, many property investors are reassessing their position in the market. Here are four key considerations for landlords in 2022.
Buy or sell?
Many landlords recently decided to sell properties due to factors including the need to recoup covid losses, the cost of complying with new energy requirements, tighter licensing legislation, and increased tax liabilities, with mortgage interest no longer an allowable expense. On top of that, the rise in house prices has led many landlords to feel that now is a good time to make a profitable exit. However, buy to let is still a good investment, especially with demand for rental properties far outstripping supply and rental prices on the rise. And while energy efficiency rules can be a headache, many lenders are now offering favourable rates on “green” mortgages on properties with a high energy efficiency rating, making it easier to invest in properties that will fare well under the tightening energy efficiency rules.
New energy efficiency requirements have got many landlords worried about expenses: since April 2020, rental properties have been required to have an EPC rating of E or above, unless they have a valid exemption – and by 2025, the Government proposes that the bar should be raised to an EPC rating of C or above. Failing to meet these requirements is set to become far more costly: from 2025 the penalty for not having a valid EPC is set to rise from £5000 to £30,000.
Towards the end of 2021 the government announced that all rental properties must have smoke alarms and all homes with gas boilers or fires must be fitted with carbon monoxide alarms. The cost of installing and maintaining alarms will fall to property owners. It’s therefore more important than ever to make sure that alarms are fitted and to check that they are all working properly. In Wales, the Renting Homes (Wales) act 2016, which will be implemented from July 15 2022, will require interlinked, wired smoke alarms to be fitted on every floor of a rental property and a carbon monoxide alarm to be placed in every room with a gas, oil or solid burning fuel appliance. A home will also be deemed unfit for habitation if it doesn’t have a valid electrical safety certificate.
Prior to the pandemic the government said it was aiming to abolish Section 21 – the clause that enables landlords to end rolling tenancies with two months’ notice and with no requirement to give a reason. This looming ban on ‘no fault’ evictions looks set to make it more costly and time consuming to evict a tenant. There are different rules for England and for Wales. In Wales, the Renting Homes (Wales) act 2016, which will be implemented from July 15 2022, stipulates that the minimum notice period for a ‘no fault’ eviction will be six months.
By placing your property with us Morgan Jones, you’ll benefit from expert advice on all aspects of being a landlord, and from our keen understanding of the market, which enables us to secure the best possible prices for your properties,
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