Whether you’re a new or existing property investor, keeping up with upcoming lettings changes can be difficult. Landlord Insurance provider Just Landlords has compiled a list of the lettings changes you must understand:
MEES (Minimum Energy Efficiency Standards)
In a bid to improve the energy efficiency of private rental housing in England and Wales, the Government is making it illegal for landlords to grant new leases on properties with an Energy Performance Certificate (EPC) rating of F or G from April 2018.
This means that if your property is currently rated F or G, you must bring it up to an E rating before you can grant a new lease (even to existing tenants). It’s important, therefore, to be wary when investing in a new property, as you don’t want to be hit with large improvement costs upon purchase.
You should also be aware that the MEES will apply to all tenancies, including existing agreements, from April 2020.
Letting agent fee ban
A ban on letting agents charging fees to tenants was confirmed by the new Government in June’s Queen’s Speech. This means that agents will not be able to charge fees to tenants for the services they offer when letting a property.
It is believed that the fees will instead be passed on to landlords, to ensure that letting agents’ profits aren’t hit too badly. This may make letting your property through an agent considerably more expensive, so you may want to self-manage your portfolio.
However, be aware of what letting agents do so that you can decide whether you’re able to take on this role to a high standard.
Tenancy deposit cap
The Queen’s Speech also confirmed the Government’s plans to introduce a cap on tenancy deposits of one month’s rent. This change was created to make moving home cheaper for tenants.
It will mean that landlords can only require a security deposit from tenants of up to one month’s rent, which may make it more difficult for higher-risk renters (such as those in receipt of benefits or with pets) to find suitable housing, as landlords generally require higher deposits from these tenants.
When letting a property under the deposit cap, it is more important than ever to have a contingency fund in place to cover potential damage.
Ban on new build leaseholds
So-called unfair charges levied on purchasers of new build homes could be banned in England under new Government proposals.
The plans would see leaseholds on new build properties banned, while ground rents could be dramatically reduced. Some new build buyers have found themselves having to pay large sums of money to change certain features of their properties, such as painting the garden fence.
If you’re considering a new build property purchase, you must understand how the current rules could affect you.
If you are thinking of entering the property investment market, or are already a seasoned investor, it is essential that you understand all potential and forthcoming lettings changes, to ensure that you stick to the law and are aware of the laws governing the sector.