This post was last updated on January 26th, 2022 at 10:55 am
The past month has been a busy one for buy-to-let news. Stamp Duty extensions were announced in the Budget and the end of the eviction ban has been delayed yet again. Pre-pandemic, Spring has always been a hectic time for new laws and government updates, but what changes can the rental sector expect this year?
End of mortgage payment holiday applications – March 2021
Last year, mortgage lenders offered mortgage payment holidays to support property owners during the pandemic.
Applications for these mortgage holidays are currently expected to end on 31st March 2021. Up to this date, property owners who have not taken this holiday can apply for their mortgage payments to be deferred.
If you’ve already had or are currently on a mortgage holiday, you may be able to extend it – but your total holiday cannot exceed the maximum of 6 months. If your mortgage is due to end after 31st March, you can apply for an extension, but all mortgage deferrals will be ending 31st July 2021.
You should continue your mortgage payments if you can afford them. However, if you are experiencing financial difficulty, and have not taken the maximum six-month holiday on your mortgage yet, you can apply.
You can do this by contacting your mortgage provider directly. They should provide you with all the information you need and explain what is exactly covered by your holiday. Coronavirus-related payment holidays do not impact your credit report.
It’s important to know that a mortgage holiday does not automatically mean a tenant does not have to pay their rent. Landlords will still have to pay their mortgage, but the payments will be deferred to a later date.
Mandatory electrical reports for all tenancies – April 2021
From 1st July 2020, Electrical Installation Condition Reports (EICRs) became a legal requirement for all new tenancies in England. On 1st April 2021, this requirement extended to all tenancies, new and existing.
The new regulations hope to ensure all rental properties are electrically safe. A qualified engineer must visit the property to inspect and test all fixed-wirings and provide a report of their findings. If the report declares the property unsafe, remedial work must be carried out within 28 days.
Once you have an EICR, it’s valid for five years. Landlords will not need another electrical inspection until this point (unless the assessor has specified a sooner inspection is required).
A copy of the EICR must be provided to prospective tenants before they move in. Local councils can also request a copy of the report, which must be provided within 7 days. Failure to comply with the regulations could result in a civil penalty of up to £30,000.
Buy to let news: Client Money Protection (CMP) – April 2021
In April 2019, it became mandatory for letting agents in England to belong to a Client Money Protection scheme. This was introduced as a way for letting agents to protect their client’s money through a number of registered schemes and ensure all funds from tenants and landlords are completely secure.
There was initially a 12-month grace period for agents to comply with the regulations, however, the deadline has been pushed back to April 1st 2021.
Expected end of 6-month notice periods and eviction ban – May 2021
On 29th August 2020, the Ministry of Housing, Communities and Local Government announced that landlords were legally obliged to give tenants six months’ notice for all evictions.
Bailiff-enforced evictions are also banned in all but the most serious circumstances, such as incidents of fraud or domestic abuse. This was originally expected to end on 31st March 2021, however, another extension has been announced until at least 31st May.
The extension hopes to “ensure residents in both the private and social sector can stay in their homes and have enough time to find alternative accommodation or support as we move through the roadmap”.
Housing Secretary Robert Jenrick MP commented:
“It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported.
“We have taken unprecedented action to support both commercial and residential tenants throughout the pandemic – with a £280 billion economic package to keep businesses running and people in jobs and able to meet their outgoings, such as rent.
“These measures build on the government’s action to provide financial support as restrictions are lifted over the coming month.”
The government is set to introduce new legislation on 4th May 2021, including the Debt Respite Scheme (Breathing Space), which covers all debts, including rent arrears.
The COVID-19 pandemic has left some families struggling to pay their mortgage, rent, living costs and other bills. This new law will ensure they have some “breathing space”, giving them time to pay off their debts.
The new law will cover two types of breathing space. The “standard” breathing space will offer legal protection from creditor action for up to 60 days, with most enforcement action and contact from creditors paused and most interest and charges frozen.
The “mental health” breathing space will include the same protection but over a longer period of time. For people in need or undergoing mental health treatment, the breathing space will cover the whole treatment length plus an additional 30 days from when the treatment ends.
The guidance also notes that the breathing spaces must be approved by FCA-approved debt advisors. An approved mental health professional will also need to be involved in mental health-related cases. Debt cannot be enforced during this period and interest can’t be charged on it.
The scheme will be launching on 4th May 2021 and will work on an application basis. In order for a tenant to be eligible for a ‘breathing space’, they must not already have a debt relief order, an involuntary arrangement, or be an undischarged bankrupt at the time they apply.
Looks like a full-on season for buy-to-lets, doesn’t it?
There’s a lot for landlords to keep an eye on over the coming months – and more updates will no doubt be announced before the year is up.
Staying on top of every change in the property sector can be overwhelming – particularly during a global pandemic – but we are here to help.
If you’re a self-managing landlord (or want to become one) in the UK, talk to us. LettingaProperty.com can take can help you advertise on Rightmove, take care of your tenancy admin and protect your rental income.
5 Landlord Updates to Expect in Spring 2021: Buy to Let News, Eviction Ban and More
This post was last updated on January 26th, 2022 at 10:55 am
The past month has been a busy one for buy-to-let news. Stamp Duty extensions were announced in the Budget and the end of the eviction ban has been delayed yet again. Pre-pandemic, Spring has always been a hectic time for new laws and government updates, but what changes can the rental sector expect this year?
Update: 12 Things Landlords Can Expect from 2022
End of mortgage payment holiday applications – March 2021
Last year, mortgage lenders offered mortgage payment holidays to support property owners during the pandemic.
Applications for these mortgage holidays are currently expected to end on 31st March 2021. Up to this date, property owners who have not taken this holiday can apply for their mortgage payments to be deferred.
If you’ve already had or are currently on a mortgage holiday, you may be able to extend it – but your total holiday cannot exceed the maximum of 6 months. If your mortgage is due to end after 31st March, you can apply for an extension, but all mortgage deferrals will be ending 31st July 2021.
You should continue your mortgage payments if you can afford them. However, if you are experiencing financial difficulty, and have not taken the maximum six-month holiday on your mortgage yet, you can apply.
You can do this by contacting your mortgage provider directly. They should provide you with all the information you need and explain what is exactly covered by your holiday. Coronavirus-related payment holidays do not impact your credit report.
It’s important to know that a mortgage holiday does not automatically mean a tenant does not have to pay their rent. Landlords will still have to pay their mortgage, but the payments will be deferred to a later date.
Mandatory electrical reports for all tenancies – April 2021
From 1st July 2020, Electrical Installation Condition Reports (EICRs) became a legal requirement for all new tenancies in England. On 1st April 2021, this requirement extended to all tenancies, new and existing.
The new regulations hope to ensure all rental properties are electrically safe. A qualified engineer must visit the property to inspect and test all fixed-wirings and provide a report of their findings. If the report declares the property unsafe, remedial work must be carried out within 28 days.
Once you have an EICR, it’s valid for five years. Landlords will not need another electrical inspection until this point (unless the assessor has specified a sooner inspection is required).
Read more: Mandatory Electrical Safety Inspections For Rental Property 2021
A copy of the EICR must be provided to prospective tenants before they move in. Local councils can also request a copy of the report, which must be provided within 7 days. Failure to comply with the regulations could result in a civil penalty of up to £30,000.
Now the deadline has passed, if you haven’t already, we recommend you sort your electrical inspection now.
Buy to let news: Client Money Protection (CMP) – April 2021
In April 2019, it became mandatory for letting agents in England to belong to a Client Money Protection scheme. This was introduced as a way for letting agents to protect their client’s money through a number of registered schemes and ensure all funds from tenants and landlords are completely secure.
There was initially a 12-month grace period for agents to comply with the regulations, however, the deadline has been pushed back to April 1st 2021.
Related article: 11 Changes Landlords Can Expect from 2021.
Expected end of 6-month notice periods and eviction ban – May 2021
On 29th August 2020, the Ministry of Housing, Communities and Local Government announced that landlords were legally obliged to give tenants six months’ notice for all evictions.
Bailiff-enforced evictions are also banned in all but the most serious circumstances, such as incidents of fraud or domestic abuse. This was originally expected to end on 31st March 2021, however, another extension has been announced until at least 31st May.
The extension hopes to “ensure residents in both the private and social sector can stay in their homes and have enough time to find alternative accommodation or support as we move through the roadmap”.
Housing Secretary Robert Jenrick MP commented:
“It is right that as we move through the roadmap, we ensure that businesses and renters continue to be supported.
“We have taken unprecedented action to support both commercial and residential tenants throughout the pandemic – with a £280 billion economic package to keep businesses running and people in jobs and able to meet their outgoings, such as rent.
“These measures build on the government’s action to provide financial support as restrictions are lifted over the coming month.”
Related article: Chancellor’s Spring Budget 2021- How Does It Affect The Property Market and PRS?
New Debt Respite Regulations – May 2021
The government is set to introduce new legislation on 4th May 2021, including the Debt Respite Scheme (Breathing Space), which covers all debts, including rent arrears.
The COVID-19 pandemic has left some families struggling to pay their mortgage, rent, living costs and other bills. This new law will ensure they have some “breathing space”, giving them time to pay off their debts.
The new law will cover two types of breathing space. The “standard” breathing space will offer legal protection from creditor action for up to 60 days, with most enforcement action and contact from creditors paused and most interest and charges frozen.
The “mental health” breathing space will include the same protection but over a longer period of time. For people in need or undergoing mental health treatment, the breathing space will cover the whole treatment length plus an additional 30 days from when the treatment ends.
The guidance also notes that the breathing spaces must be approved by FCA-approved debt advisors. An approved mental health professional will also need to be involved in mental health-related cases. Debt cannot be enforced during this period and interest can’t be charged on it.
The scheme will be launching on 4th May 2021 and will work on an application basis. In order for a tenant to be eligible for a ‘breathing space’, they must not already have a debt relief order, an involuntary arrangement, or be an undischarged bankrupt at the time they apply.
Looks like a full-on season for buy-to-lets, doesn’t it?
There’s a lot for landlords to keep an eye on over the coming months – and more updates will no doubt be announced before the year is up.
Staying on top of every change in the property sector can be overwhelming – particularly during a global pandemic – but we are here to help.
If you’re a self-managing landlord (or want to become one) in the UK, talk to us. LettingaProperty.com can take can help you advertise on Rightmove, take care of your tenancy admin and protect your rental income.
To find out more, you can visit our website or book a call with a member of our team.
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