As if the property market doesn’t have enough to keep up with, it seems that 2018 is going to be the year for legislation changes, many of which will have a considerable impact on landlords.
Here’s an outline of what I know and can share with you:
Minimum Energy Efficiency Standards (MEES)
I’ve talked about this a few times over the past year and tried to remind everyone as the time approached that the rules have changed. A short recap is that as of the 1st of April 2018, any properties rented in the private rented sector will need a minimum energy performance rating of E on an EPC certificate. The rule change relates to all new lets and renewals. It will be further extended to all existing tenancies on 1st April 2020.
Failure to comply could lead to fines of £30,000. For more information, you can read my previous updates or refer to the government website which has detailed landlord guidance available.
As part of the Housing and Planning Act 2016, a new banning order was introduced on 6th April 2018 to try and tackle criminal landlords and agents. A banning order can effectively bar an individual who has been convicted of specified offences, from renting out properties. A new database of criminal landlords and agents has also been created as part of the revised legislation.
I think it’s fair to say that this will be welcomed by the majority of landlords. Those who want to provide an excellent service and great quality accommodation, who are law abiding and conscientious managers, have long been tarred with the legacy of bad landlords giving our industry a bad name. This will hopefully a step towards eradicating that legacy and improving standards for tenants.
More information about the Banning Order Regulations are available on the government website.
Up next is GDPR which is a hot topic for most businesses at the moment. The Data Protection Act is to be replaced by General Data Protection Regulations from 25th May 2018. Landlords must make sure their businesses are GDPR compliant with robust data management processes that will include a data protection policy and privacy notice for customers.
My companies data is processed through CRM systems which fully comply with the incoming GDPR regulations, and our staff are trained on how to handle personal data. We are also registered as a data controller with the ICO.
It looks like the rules around annual gas safety checks will also be improved, in that landlords will be able to carry out the compulsory checks any time in the two months leading up to the renewal date, without impacting the review date for the next year.
This will allow landlords a lot more flexibility when scheduling compulsory checks. This can be really helpful where access to the property or inspector availability is limited.
Extension of mandatory HMO licensing
This is another one that I’ve mentioned several times. My HMO management company Home-Share has been following this closely, as the impact for the landlords we work with could be considerable.
Back in 2015 the Government suggested extending the mandatory licensing of houses in multiple occupation (HMO) to remove the requirement that they must be 3 or more storeys high in order to be licensed. The removal of the 3 storey requirement means any HMO that is occupied by 5 or more people, will require a mandatory licence.
The legislation change will come into force from 1st October 2018 and could affect up to 200,000 properties as the scope of licensing extends to a much wider variety of properties.
HMO room size regulations
At the same time as the HMO licensing extension, new laws will be implemented to set a national minimum bedroom size for all HMOs, whether licensed or not.
The new conditions state a minimum room space of 6.52 square metres for one person and 10.23 square metres for two people. This will undoubtedly lead to better conditions for tenants, something which I am strong advocate of. To my mind, well-managed and well-maintained properties provide better homes for tenants, and therefore better yields for landlords.
Extension of Section 21
And finally, the extension of Section 21 which all landlords should be aware of but shouldn’t be greatly impacted by. This relates to what landlords are legally be required to supply their tenants with before the start of a tenancy. Previously the ‘prescribed documents’ (including tenancy deposit information, property EPC certificate, valid gas safety certificate and a copy of the Government’s latest ‘How to Rent’ guide), had to be provided for tenancies or renewals that started on or after October 1st 2015. As of October this year, this extends to all tenancies including those established before 1st October 2015.
As standard, we provide all of these documents to our tenants and require electronic signature proving they have seen them. Furthermore, these are re-served when a tenancy is renewed or becomes periodic.
There’s quite a lot to digest there. What are your thoughts about all of these changes? Personally, I feel all the regulations will bring further administration for landlords, which emphasises the need for a good quality specialist letting agent and professional advice. If you’d like to contact me about anything I’ve mentioned here, you can email me at firstname.lastname@example.org, connect with me via LinkedIn or join our discussion group over on Facebook.