3 things your agency needs to know in May 2022
Alongside the Queen's Speech 2022, which will determine the programme of legislation for the next parliamentary session, this is what your agency needs to know in May.
The amount of new information that agents and landlords will need to take on board in May all hinges on what's announced in the Queen's Speech. Will it include any insights into the Renters' Reform Bill White Paper or will we have longer to wait for this highly anticipated publication?
What we do know for the coming month is that property portals will include new fields that agents and landlords will need to complete for property listings by the end of May. Agents and their landlords will also need to start to prepare for the Renting Homes Wales Act 2016 before it comes into force in July this year.
What you need to know in May 2022
- The Queen's Speech 2022
- Material information rules to be in place by May
- Agents and landlords need to prepare for the Renting Homes Wales Act 2016
What you needed to know in previous months
The Queen's Speech on 10 May 2022
Agents and landlords should keep an eye on what's announced as the Queen's Speech 2022 will outline the programme of legislation of what the government aims to achieve in the coming parliamentary session.
A former advisor to number ten, Nikki da Costa, says that the speech will "herald the last major legislating session of this parliamentary term". She highlighted one of the "likely new bills" to be introduced this session is a Private Rented Sector Bill, covering the Decent Homes Standard in the Private Rented Sector, a National Landlord Register, abolishing Section 21, and so on.
However, she also highlights that the programme to cover this session is packed, which may cause the government to "wield the red pen" in what's carried over or newly proposed. Da Costa also highlights that, because the Renters' Reform Bill white paper is yet to be released, this makes legislation on the topic this parliamentary session "ambitious".
Material information rules to be implemented
The recently announced changes to material information should be in place across all property portals come the end of May 2022, helping tenants to make more informed decisions when renting a property.
The National Trading Standards launched the project to bring more clarity and a more defined list of basic material information included in property listings.
The first step of the project is Part A, which covers the "unavoidable costs" for the tenant or house buyer: the tenure information (for a sales listing), council tax band, and price of the property or the rent, including any deposits.
Parts B and C will soon follow, covering other information available for all properties - such as utilities - and additional information which is established on a more case-by-case basis - such as flood risk.
Agents and landlords should see the Part A fields in property portals by the end of the month. Adding this information won't be mandatory for agents and landlords until all three parts of the new material disclosure rules are completed - and the government has said that it will legislate on the guidance "if necessary".
>Read our guide to the new material information rules in full.
Agents and landlords need to prepare for the Renting Homes Wales Act 2016
The Renting Homes (Wales) Act 2016 will come into effect from 15 July 2022.
With a new occupation contract for tenants replacing assured shorthold tenancies, much is changing for letting agents and their customers.
The act will extend notice periods for a no-fault eviction to six months in most cases. Tenants on periodic contracts will also be protected from no-fault evictions for the first six months of their tenancy.
Landlords and agents will also need to follow new rules around the condition of properties, including electrical safety testing and ensuring working smoke alarms and carbon monoxide detectors are fitted.
Terminology will change too - from "tenant" to "contract holder", "property" to "dwelling", and more - meaning that many of the documents currently used will need to be updated in line with this new phrasing.
With so many considerations, agents will need to consider the implications in relation to the needs of their entire customer base. Whether an accidental landlord with one property, or a portfolio landlord or investor with multiple properties, all will need to be kept in the loop in the next two months to ensure everyone stays compliant.
Things to know from April 2022
"Homes for Ukraine" scheme underway
The government has announced details of how its "Homes for Ukraine" scheme will work, with sponsors able to welcome refugees into their homes or other properties that they own, rent-free.
Although the scheme is initially only for people that have a "named individual" to sponsor, the government is expected to release more details soon on how anyone with an appropriate space to offer can get involved.
Your landlords and tenants may come to you with questions around how this works. You should read up on what the scheme involves so you can be prepared to answer those questions, if any of your customers were to wish to become sponsors.
Zero-rate VAT on the installation of energy efficient materials
The biggest takeaway for agents and landlords from the Spring Statement 2022 is that zero-rate VAT comes into play this month on the installation of certain energy saving materials in homes, including solar panels and ground pumps, with wind and water turbines also reinstated on the list of applicable technologies.
With the new energy price cap now in effect, energy efficient properties are becoming ever more popular, something that agents and landlords should consider when deciding on how to best navigate the proposed increase to energy efficiency standards and EPC ratings.
New support measures in the Spring Statement 2022
Alongside the energy efficiency announcement came a recognition from the government of the impact of the rising cost of living in the Chancellor's Spring Statement 2022. As such, the funding available for councils to support vulnerable households will double.
Plus, fuel duty on petrol and diesel will be cut by 5p per litre until March 2023. These new measures sit alongside those already announced to support households. Agents need to be aware of the government support available and share details with their landlords and relevant tenants.
Changes to right to rent checks for Biometric Residence Cards and Permits
From 6 April, landlords and agents in England will no longer be able to check biometric residence cards or permits to prove an applicant's right to rent.
Your applicants will need to provide you with a share code and their date of birth, which you can then check via the online checking service to verify their right to rent.
However, the original deadline for the temporary Covid-19 right to rent measures has been extended until 30 September 2022, to give agents extra time to get set up with a relevant IDVT provider and offer your British and Irish tenants the chance to prove their right to rent online.
Read this Q&A with David Smith, JMW Solicitors, for answers to your questions on the upcoming changes to right to rent.
Consultation to close on "A New Deal for Tenants" in Scotland
Covering everything from rent controls to a new Housing Standard, the draft of "A New Deal for Tenants" in Scotland aims to "improve accessibility, affordability choices and standards across the whole rented sector".
“Landlords and letting agents in Scotland have for a number of years been calling for certainty and strategic direction for the Scottish private rented sector," says John Blackwood, chief executive of the Scottish Association of Landlords. "We welcome any move towards that."
The consultation comes to a close on 15 April, and the final strategy is expected to be ready for publication by the end of 2022.
Things to know from March 2022
Temporary right to rent measures extended
This is the biggest update in February which will affect landlords and agents in the immediate future. The government has decided to extend the temporary right to rent Covid adjusted checks until 30 September 2022.
This is mainly to give landlords and agents more time to prepare for the new rules and cost implications around using Identification Document Validation Technology (IDVT) providers to conduct the checks, which will come into play from 6 April 2022.
The extension doesn't mean that you should sit back and wait for the new deadline. Your agency and landlords should be starting to consider how these new rules will affect your processes, and research the best ways to implement them to make them as effective as possible in the long term.
Making Tax Digital becomes mandatory for all VAT-registered businesses from 1 April
Up until now, only VAT-registered businesses with an annual turnover above the £85,000 threshold have had to file their VAT returns through Making Tax Digital - but this will expand to cover all VAT-registered businesses from 1 April 2022.
If this includes your agency, you've only got a few weeks left to ensure you are using the right software and that you understand all the details that you'll need to submit digitally. If your landlords manage a portfolio through a VAT-registered business, you should make sure they're aware of these changes too, so they aren't caught out.
Inflation and the energy price cap increase will affect the cost of living
In February, the government announced that the energy price cap will increase by 54 percent from 1 April 2022. Rent and other everyday costs are increasing with inflation, and the price cap announcement simply confirms that this is not going to be over any time soon as the energy crisis continues.
You've therefore got less than a month to share with your tenants - and landlords - any relevant information about the financial support available and answer other key questions about the energy crisis, using our free resources, before their energy costs jump - to help them avoid falling into rent arrears.
Low housing stock continues to impact the market
TwentyEA's research has shown that property stock available to let is down nearly 32% versus January 2019 - to lowest levels seen in 13 years.
Tenants looking for a flat may have more luck than renters looking for a house, as there are proportionately more flats available now than in 2019, presumably as a result of renters looking for more space post-pandemic.
This of course all means that rents are still reaching lofty heights, but may lead to fewer landlords available for agents - and homes for their tenants - or more effort needed to get landlords to consider your agency.
Agents will need to factor this into their strategies, look for alternate sources of revenue to bolster any dip in landlord instructions, and take a closer look at their conversations to make sure they're getting the most out of each and every one.
This shouldn't be left for the future. You need to be having those conversations and taking those actions now, as this problem doesn't have a short-term solution.
New material information rules announced for property listings
Agents will soon find new fields appearing in their property portals between now and May 2022, to share the property's price or rental amount, tenure, and council tax band in listings.
These changes to material information rules are only step one of three announced by the National Trading Standards, so agents should expect more updates in the near future.
Once all three steps are completed, with portals updated accordingly, that's when the guidance is expected to become mandatory. Before then, any of the new fields that agents leave blank will be flagged on the page for the tenant or home buyer.
However, once the new fields start to appear, you should ensure you provide this information each time as best practise, to get into the habit when it becomes a requirement.
The Levelling Up White Paper expands upon what's expected in the spring Renters' Reform Bill white paper
The Levelling Up White Paper is another step towards the Renters' Reform Bill becoming a reality, announcing further details of what will be debated and included in a further white paper in the spring.
A national landlord register, stronger redress for tenants, and abolishing Section 21 have all been confirmed - while proposals for new standards in the private rented sector will also be debated and outlined in the future white paper.
Spring's only a few weeks away. Your agency needs to start considering the implications of these changes and advising your landlords now so they understand how the new rules will affect them.
The debate around rent controls advances
Rent controls haven't been confirmed in England, Scotland, or Wales, but the debate is moving, slowly but surely, towards a definitive response on whether they will be implemented in the near future.
In England, calls for rent controls are cropping up regionally, with Sadiq Khan renewing his appeals for London and with new demands from Bristol.
In Scotland, a national consultation is currently underway to determine if rent controls are the right way to boost affordability while, in Wales, a white paper has been promised through a new cross-party collaboration between the current Welsh Government and Plaid Cymru.
The Scottish consultation is still accepting responses until 15 April 2022. If you're an agent in Scotland, now is the time to share your thoughts, and on the other proposals outlined in "A New Deal for Tenants".
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