6 things your agency needs to know in January 2023

9 January 2023

From the Renters' Reform Bill publication to short-term let changes and confirmation on whether the rent freeze in Scotland will end - or be extended - here are 6 of the top things your agency needs to know in January.

We're into a brand new year, so let's start afresh with an overview of what's on the horizon. Here's a breakdown of some of the top things that your agency and landlords need to know in January and beyond, from the changes to tax for short-term lets, to when the Scottish rent freeze and current energy price guarantee will end - and more.

What you need to know in December 2022

Open letter attracts nearly 400 signatures from industry stakeholders

The open letter to government, written in collaboration with a number of business leaders and addressing the unsustainable pressures on the Private Rented Sector, has gained nearly 400 signatures.

It urges the government to consider how it can help improve supply through ensuring the sector remains attractive to investors - and thus reduce the risk of drastic rent increases.

If you wish to add your name to the letter, you can read and sign it on our site.

Late 2023 introduction for the Renters' Reform Bill ?

Although the industry awaits a concrete date for implementation, the government has previously reiterated on different occasions that the Renters' Reform Bill will be introduced in 2023.

From the abolition of section 21 to a single system of periodic tenancies, how the proposals will be prioritised and when they will become law has yet to be determined - although Robert Bolwell, Senior Partner at Dutton Gregory, gives his predictions, based on comments from Secretary of State, Michael Gove.

"The long-awaited Renters Reform Bill based on Michael Gove’s recent White Paper, should finally be published in late 2023," says Robert Bolwell, Senior Partner at Dutton Gregory. "As well as abolishing section 21 notices, the bill will also suggest giving Ministers executive powers to cap rent increases for existing tenants, along the lines of the legislation recently introduced in Scotland.

"Although the new measures will be welcomed by London’s Mayor, Sadiq Khan, it will be criticised by Labour’s front bench as not going far enough and will divide backbench Tories between those who are for the measure and those who are steadfastly opposed."

Free e-book: Your guide to the"A Fairer Private Rented Sector" white paper  proposals


Making Tax Digital for Income Tax pushed back to 2026

Only a few short weeks ago, the government announced that it would push back the planned changes under Making Tax Digital for Income Tax Self Assessments by two years - and will now be introduced in a phases.

From 6 April 2026, landlords with a property income over £50,000 will need to submit quarterly income tax returns using MTD compatible software - and those in the £30,000-£50,000 income bracket will join them from 6 April 2027.

Read more in our guide to Making Tax Digital.

Changes on the horizon for short-term lets

Governments in England, Scotland, and Wales have taken on board the criticism levelled at the holiday lets sector and its impact on the supply of homes in certain regions.

In England, business rate relief rules for short-term lets will change in April 2023, while homes left empty could be eligible for higher council tax rates.  

In Wales, a consultation is open on a licensing scheme and register for holiday lets until March 2023, while in Scotland a new licensing scheme has been introduced. Existing owners of properties let out on a short-term basis will need to apply for a licence on each property by 1 April 2023.

Rent freeze in Scotland to end - or renew - on 31 March 2023

The rent freeze in place in Scotland will expire on 31 March 2023 - although it will be reviewed before this deadline to see if there is sufficient reason to extend it for another six months.

In Wales, its Labour party recently voted down calls to consider freezing rents, highlighting unintended consequences of implementing a freeze, such as driving landlords out of the sector.

In England, the "A Fairer Private Rented Sector" white paper stated that "this government does not support the introduction of rent controls to set the level of rent at the outset of a tenancy" - suggesting that this is unlikely to happen in England under the current leadership.

However, Labour leader Kier Starmer recently announced his plans for devolution in his New Year's speech, with "new powers" to local authorities, including over housing. Although light on detail at this stage, this could herald the introduction of rent controls under a Labour government.

The Mayor for London, Sadiq Khan, has historically campaigned for the power to freeze rents in London, though these powers have not yet been granted.

Energy Price Guarantee to downgrade in March

The current Energy Price Guarantee aims to save households £900 a year on average, reducing energy bills to around £2,500 a year on average. A new guarantee will come into play from April 2023 until April 2024, meaning the average household will pay £3,000 a year.

The government has also committed financial support to the most vulnerable households in the UK, including low income households on certain benefits that will receive a payment of £650 to support through 2022-2023 - with a second payment of up to £900 in the 2023-2024 financial year.

You can use our email and questionnaire templates to learn more about the financial circumstances of your tenants - and share a free overview of the financial support available.

A recap of the past three months

Things to know in December 2022

New measures to crack down on rogue landlords

Following the death of Awaab Ishak due to the condition of his social rented home, the government has announced new measures to crack down on rogue landlords in both the social and private rented sectors.

These measures include reduced funding through the Affordable Homes Programme for non-compliant social housing while providing additional funding to seven local authorities with poor quality private rented homes.

This sits alongside the proposals to include the rogue landlord register through the property portal, as outlined in the A Fairer Private Rented Sector white paper.

More demand for insurance

Goodlord and Vouch data highlights that more letting agents are offering their landlords Rent Protection, to help support them against rent arrears or income disruption, compared with the same September/October period in 2021.

This change in behaviour demonstrates how agents aim to diversify their offering to landlords, under the current landscape of increased legislative challenges and economic pressures.

New Welsh lettings laws are now live

Promised since 2016, the Renting Homes (Wales) Act is now in force for landlords and letting agents across Wales - meaning new contracts, notice periods, and safety requirements, amongst other changes. This is touted as the "biggest change to housing law in Wales for decades". 

“A decent, safe and secure home is fundamental to people’s wellbeing. These changes will provide tenants with greater protection from eviction and ensure their home is safe to live in," says the Welsh Climate Change Minister, Julie James.

“At the same time, landlords will benefit from greater clarity in the law and the ability to repossess abandoned properties more quickly."

Things to know from November 2022

Making tax digital compatible software deadline for VAT returns

From 1 November, any VAT-registered businesses will only be able to use the Making Tax Digital (MTD) software to complete their VAT returns.

If your agency has not yet set up the right systems, you'll need to ensure you invest the time before you submit your next VAT return, to ensure you avoid any default surcharges and penalties for late submission.

Register for our free webinar on Making Tax Digital to learn about your business obligations and how you can support your landlords.

The Scottish rent freeze and moratorium on evictions

Emergency legislation to freeze rents and introduce a moratorium on evictions in Scotland has been passed.

This will be backdated to 6 September 2022 and will last until at least 31 March 2023. Any increases that your landlords issued after 6 September and before the legislation was passed will be void.

There will be exceptions to the rent freeze and the moratorium, and increased damages for any unlawful evictions during this time frame, as explained in our guide.

The new Prime Minister and renters' reform

You will of course be aware that we have a new Prime Minister, yet the impact of this on renters' reform and the property sector at large is still yet to be confirmed.

However, with Michael Gove back as Secretary of State for Levelling Up, Housing and Communities, that suggests a return to the initial rental reform trajectory, as outlined in the Renters' Reform Bill white paper.

Mortgage lenders are also starting to slowly show willing as more economic stability is anticipated under Rishi Sunak, with an average dip in the rates they offered in the days following Sunak's appointment.

A new short-term let licensing scheme in Scotland

Existing short-term let operators and hosts in Scotland will need to apply for a licence on each short-let property that they manage by 1 April 2023. New hosts will need to obtain a licence before they can accept bookings for paying guests.

The hosts will need to apply for the licence with their local authority, which may take up to 12 months to process the application for existing hosts, or nine months for new hosts.

Those properties would then need to meet certain criteria to obtain the licence, from meeting the Repairing and Tolerable Standards, to carrying out certain safety checks.

Things to know from October 2022

What the mini-budget included

The new Chancellor's mini-budget made some changes to corporation, national insurance, and income tax which saw the pound dip drastically and the Bank of England threatening to raise base rates once again to counter - a move that would have a knock-on effect for landlord mortgage payments.

However, a cut to the stamp duty threshold may once again support the sales market, and the government has also promised new measures to help boost housing supply, particularly across new investment zones UK-wide.

Energy prices and who gets the £400 energy grant

Whereas bills were expected to increase to an average of £3,549 per household in October, the government stepped in to announce an "energy price guarantee", estimating that the energy prices for the average houseshold will be capped at £2,500 a year.

Businesses also receive equivalent support, with a "Supported Wholesale Price" at a rate of £211 per MWh for electricity and £75 per MWh for gas - less than half the wholesale price expected over the winter months.

However, landlords that offer bills inclusive tenancies will have to pass on the £400 energy bill discount to their tenants, in new legislation announced by the government.

A rent freeze in Scotland

Scotland's First Minister, Nicola Sturgeon, announced a rent freeze and a moratorium on evistions in a new Programme for Government. Both will be temporary measures, expected to end in March 2023.

“The notion that this needed to be announced with no consultation with landlords highlights just how unaware the Scottish Government is of how their existing legislation operates and also their desperate need not to consult, not to be open, and to make decisions without any understanding of the consequences,” says David Alexander, Chief Executive of DJ Alexander.

Temporary right to rent measures have ended

The temporary right to rent checks announced at the start of Covid-19 have now come to an end.

This means that landlords and their agents will need to either complete these checks manually or using one of the relevant online services, such as the home office checking service, or one of the new Identity Software Providers.

You can read more about the different ways to check a tenant's right to rent in our guide.

The current sentiment of the industry revealed

Our State of the Lettings Industry Report 2022 has revealed some interesting insights from lettings professionals across the UK, with 75% of agents saying they were "very” and “somewhat” confident that their businesses were set up to cope with future legislation changes.

This contrasts with only 22% of landlords who said they were "very confident" about their ability to cope - a space where agents can step in to support their landlords.

You can find more insights in our State of the Lettings Industry Report 2022.

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