Right to Rent fines increasing and what else your agency needs to know in February 2024
This month will see Right to Rent fines increasing, bills progressing, and consultations closing. Here's what letting agents and landlords should know.
Despite the government’s February recess, there will be changes this month that can affect landlords and letting agents both in the immediate and distant future. From the rise in Right to Rent fines to the Welsh Labour Leadership election, here is everything letting agents need to know that can affect their landlords.
What to look out for in February 2024:
- Right to Rent fine increases
- Government payments for communities affected by flooding
- Welsh Labour leadership election
- Greater Manchester Good Landlord Charter consultation closes
- The Leasehold and Freehold Reform Bill
And don't forget, you can download newsletter templates for your landlords to inform them of big changes ahead.
A recap of the past three months:
Right to Rent fine increases
As part of the Immigration Act 2014, landlords and letting agents have a legal responsibility not to home tenants who don’t have the right to live in England. Those who knowingly rent their properties to lawful immigration status holders can face a civil penalty.
On February 13, these fines will be increasing significantly. For first-time breaches, fines will increase from £80 per lodger and £1,000 per occupier, to now a maximum of £5,000 per lodger and £10,000 per occupier. Repeat breaches can now face a maximum fine of £10,000 per lodger and £20,000 per occupier.
To check a tenant's immigration status correctly, landlords must view original immigration documents, make copies and keep them for 12 months after the tenancy expires. Letting agents must check that all tenants who occupy their properties have a legal status to live in the UK.
This Right to Rent scheme fines can be served to landlords or letting agents and is only currently mandatory in England and for properties within that country.
Government payments for communities affected by flooding
Over 30 flood warnings were given from Storm Henk which damaged around 2,000 properties and caused over 150 million of insured losses.
The government is providing available help for:
- Flooded households can apply for up to £500 to help with immediate costs
- Households significantly affected will be eligible for 100% council tax relief for at least 3 months
- Eligible flood-hit property owners can apply for up to £5,000 to make their homes more resilient to future flooding
The government plans to deliver a £5.3 billion investment to protect properties to prevent future flooding damages. Support and further details on eligibility are available through your councils.
Welsh Labour Leadership Election
With the news that Mark Drakeford stepped down as the Welsh Labour leader in December 2023, an election will start in February to determine the new leader of the Labour Party.
In December, two candidates received enough nominations to get on the membership ballot, Vaughan Gething MS and Jeremy Miles MS, and are now in the running to be the new leader of the Welsh Labour Party.
Jeremy Miles is currently serving as Minister for Education and Welsh Language, and Vaughan Gething is acting as Minister for the Economy of Wales.
Ballots will open on February 16, and close on March 14, with the new Labour Leader to be announced on March 16.
Greater Manchester Good Landlord Charter consultation closes
Greater Manchester Mayor, Andy Burnham launched the Good Landlord Charter on January 8 to bring together landlords and renters to improve the standards of homes in the the private rental sector, as well as social housing.
As part of this Charter, landlords with properties in Greater Manchester are invited to take part in a focus group to discuss how to make homes more affordable, safe, inclusive and well-managed.
The consultation period will close on February 26, and the focus group will be on Tuesday 20 February. If you are a landlord who owns a property in Greater Manchester, you can register to attend here.
The Leasehold and Freehold Reform Bill
Originally introduced in November 2023, the Leasehold and Freehold Reform Bill will apply to England and Wales to “improve consumer choice and fairness in leasehold to crack down on unfair practices in leasehold’.
The government will also look to introduce a ground rent cap through this bill.
The Labour Party has put forward amendments to the Leasehold and Freehold Reform Bill during the committee stage in January. The amendments include a Leasehold Reform Bill within Labour’s first King’s Speech if the bill doesn’t go ahead in the Conservative government. They have also pledged to adopt proposals from the Law Commission to make it easier for leaseholders to buy or extend their lease.
The Bill will continue to develop over the next few months.
January 2024 - lettings recap
Awaab’s Law proposed for rogue social landlords
Social landlords will need to complete emergency repairs within 24 hours of identification, following a consultation launched by the Department for Levelling Up, Housing and Communities.
Landlords who don’t follow this timescale can be taken to court and pay possible compensation to tenants.
Awaab’s Law is named after two-year-old Awaab Ishak, who died due to direct and prolonged exposure to mould in their home.
2. CONSULTATIONS ON ROGUE LANDLORDS AND HOMELESSNESS
A consultation in Greater Manchester will open this week to discuss the Good Landlord Charter, a scheme to help renters distinguish between accredited and rogue landlords. Mayor of Greater Manchester, Andy Burnham, says he is committed to boosting inspections and enforcement of landlords in 2024.
3. COnsultation to end homelessness in Wales
A white paper will be released in early 2024 setting out proposals to reform the existing core of homelessness legislation and the role of the Welsh public services in preventing homelessness.
4. Check your Property Licences
New year, new licence? With a new property licensing scheme launching every 10 days, it’s easy to get caught out. Last year saw new selective licensing schemes in areas such as Birmingham, Nottingham, and Manchester, so if you live in a city make sure you're covering your back.
For example, from 1 of January 2024, The Royal Borough of Greenwich has added an additional HMO licence for certain properties, so it's wise to keep an eye out for what could come up in your area. Failure to do so can lead to a £30,000 fine or even prosecution.
5. Rents prices rising
Despite the fall of inflation and lower housing prices, the price of rents still continues to rise. According to the ONS, there was a 0.1% increase in the price of rent from October to November in 2023, with Wales seeing the largest increase to 7.3%.
Goodlord CEO, William Reeve, expects “Tenant demand will remain extremely high and rents are likely to continue increasing for some months before hitting their ceiling”.
6. Funding packages Proposed for councils
A package of £64 billion was announced in December of 2023 to help aid frontline services by the Levelling Up Secretary, Michael Gove.
“We recognise they are facing challenges and that is why we have announced a £64 billion funding package to ensure they can continue making a difference, including through our combined efforts to level up”, says Michael Gove.
Councils will be able to increase council tax by up to 3%, however, it is at their discretion and be mindful of the cost of living crisis when making any decisions.
A consultation of the suggested package will be open for 4 weeks and closing on the 15th of January.
December 2023 - lettings recap
RENTERS (REFORM) BILL going through committee stage
The Renters (Reform) Bill went through the committee stage in parliament in November 2023, with nearly 300 proposed amends to the original bill. The Bill will now need to go to the Report Stage and the Third Reading.
The Report stage gives MPs the opportunity to consider further amendments to the bill. MPs can speak, vote, and add suggestions. This is followed almost immediately by the bill's Third Reading, which is the last chance for debate.
Although the date of the Report stage is yet to be announced, letting agents and landlords should still keep aware of whether this happens in December or into the new year. Government will close for recess on 19 December and re-open on 8 January.
GET FAMILIAR WITH NEW MATERIAL INFORMATION RULES
At the end of November, Trading Standards further guidance to improve material information in property listings, under Parts B and Parts C.
Letting agents and landlords should be reviewing these updates to ensure they are following the latest guidance.
November 2023 - lettings recap
Charles III made his first speech as King to open parliament in early November. He stated his commitment to passing the Renters (Reform) Bill and to abolish section 21. There was also a commitment to introduce a bill to make it easier for homeowners to buy the leasehold of a property, and further ongoing commitments to focus on ensuring the country reaches Net Zero emissions.
Decent Homes Standard to be applied to private rented sector
The Renters (Reform) Bill is going through the committee stage in parliament, where officials debate the bill on a line-by-line basis. It appears that one of the biggest outcomes so far will be to introduce a Decent Homes Standard to the sector for the first time.
Landlords will have to ensure that a property meets certain standards, such as "being in a reasonable state of repair", "having reasonably modern facilities and services" and "providing a reasonable degree of thermal comfort."
Autumn Statement marks changes to LHA and some tax cuts
A few weeks after the King's Speech, the Chancellor of the Exchequer presented government spending for 2023. This included:
- Changes to Local Housing Allowance (LHA) - which will now cover at least 30% of local market rents.
- Tax cuts that may impact some self-employed landlords. Class 2 national insurance has been abolished, and class 4 national insurance has been reduced from 9% to 8%.
- More opportunities to help homebuilders convert a house to two flats, as long as the "exterior remains unaffected".
New material information rules
Trading Standards has issued further guidance to improve material information in property listings. As well as the need to always list critical information about a property (the rent, the deposit, and council tax rates), other information - such as number of rooms or whether the property is a flood risk - should be available to prospective tenants no more than "one or two clicks away."
October 2023 - lettings recap
England: New "How to rent guide" published
For the second time this year, there's a new "How to rent" guide available to share with your new and renewing tenants. This edition of the guide includes information around the Housing Loss Prevention Advice Service for tenants.
This guide needs to be shared with tenants at the start of their tenancy - and could affect a landlord's ability to serve a section 21 notice if it's not shared at that time.
Read more about why it's important to the lettings process in our guide.
England and Wales: EPC C rating requirements dropped
In a speech, Prime Minister Rishi Sunak shared that the plans to increase minimum energy efficiency requirements would be "scrapped" - but research shows that many landlords have already made the upgrades.
This isn't a bad thing, as it means that those landlords have set themselves up for the future.
Tenant preferences are unlikely to change on wanting an energy efficient property, so those landlords will see higher demand than those that stick with the bare minimum.
Plus, the NRLA has highlighted that the measures could still be revisited, if the Labour party were to come to power.
Scotland: Short-term let licensing now in play
All short-term let accommodation in Scotland should now have a licence or applied for one, from 1 October 2023.
Whether you're letting out a second home or a room in your home, you may be risking fines of up to £2,500 if you haven't followed the new rules.
UK: Frozen interest rates signify light at the end of the tunnel
Inflation dropped more than expected in August, which led to the Bank of England choosing to freeze its base rate at 5.25%.
Although this means no change in the immediate future to the mortgage interest costs for landlords, this does show that forecasts predicting that interest rates would plateau are accurate.
Interest rates could still rise again in the future if the dip in inflation proves to be a short-term trend, but this hopefully signifies more positivity around mortgage costs going forwards.
England: Guidance for landlords around damp and mould published
New guidance is now available for landlords around the legal requirements around damp and mould, and how to identify and address any issues.
At the same time, proposals on how to update the Housing Health and Safety Rating System to simplify it for landlords and councils alike have been published.
With the results of a consultation into the Decent Homes Standard expected, these updates reflect plans to legislate to apply these standards to the private rented sector for the first time.