UK Housing Market Regulation Changes Overview
From pushed out Brexit deadlines, a new Prime Minister, governments declaring climate emergencies and continuing with your daily life, keeping up with the UK housing market may have been low priority.
Below we’ve briefly highlighted some of the major changes which have come into effect during 2018/2019 and what changes can be expected in the near future.
Content:
- Changes now in effect
- Possible future changes
- Recent housing market news
- Recent Changes Now in Effect:
Tenant Fees Ban
Effective from the 1st of June 2019, pre-tenancy and end of tenancy fees are now illegal, apart from a select few; A security deposit (capped at six weeks rent), holding deposit (capped at 1 weeks rent), tenant faults, utility bills and council tax are exempt from the ruling. Read more about the tenant fee ban.
Agent Regulations
Agents in the UK are not obliged to become part of the ARLA property mark, which provides some regulation and standards to the industry – usually only those who wish to provide an extra level of trust to their tenants/clients become part of ARLA.
However, the government have now proposed requirements that all agents must have sufficient qualifications and are to be regulated by an independent body; Similar to the regulations which are in place in the USA. Read more about the potential estate agent regulations.
Abolishment of Section 21
Section 21 allows agents and landlords to reclaim properties from tenants without a solid reason. However, the government plans to scrap section 21 and remove Assured Shorthold Tenancies (ASTs) from the Housing Act 1988.
In theory, if a landlord has a tenant causing nuisance and/or damage to a property, it will be much harder to evict them. Once Section 21 is abolished, landlords/agents will have to satisfy a judge that there is a genuine reason to evict and reclaim the property. More information on the abolishment of section 21.
Homes Act - Fitness For Human Habitation
Effective since the 20th of March, landlords are liable for maintaining a baseline standard condition of their property; The property must be free of hazards and fit for habitation. Landlords who breach the terms of the Homes Act can be taken to court by the tenant. Read more about the Homes act.
Client Money Protection (CMP)
In order to provide reassurance to each party involved in the rental market, from April 2019, it is now mandatory for agents in England to join a government approved CMP scheme; Agents in Wales and Scotland were already required to join a scheme. Read more about CMP.
HMO Licenses
In the past, only properties which were over 3 storeys high and had 5+ people living and using shared facilities were classed as a HMO (House in Multiple Occupation). However, a rental property now requires a HMO license if 5+ people are living in the property, compromising of 2+ households; regardless of the property size. Read more about HMO regulations.
Minimum Energy Efficiency Standards (MEES)
In 2018, new Minimum Energy Efficiency Standards (MEES) regulations were set in motion. New tenancies must be in a property with an EPC rating of at least grade E. These regulations will also apply for current tenancies from April 2020. Read more about the MEES and benefits of a high EPC rating.
Mortgage Interest Tax Relief
The new mortgage interest tax relief regulations will be phased out and will be in full effect from 2020 onward. From April 2020, it will not be possible for landlords/investors to deduct mortgage interest from taxable income. See an example on how the new mortgage interest tax relief regulations will impact landlords.
Possible Future Changes
Rent Controls in London
Proposed back in 2017, rent controls are not yet being discussed in Parliament, however Sadiq Khan has stated that controlling rents in the capital are central to his re-election bid. Read more about possible rent controls in London.
Stricter Electricity Standards/Checks
While not yet given a date of when the changes will be mandatory by, there is a government consultation as to whether electricity standards should be stricter in the private rental sector. Read more here.
Minimum 3 Years For AST
Proposed by the government in 2018, the thought is that longer tenancies, with minimum term of 3 years, will provide tenants with more security. Read more about the proposedtenancy changes here.
Rogue Landlord Database
The rogue landlord database is currently only accessable by government officials. No final date has been given to when the database will be released for public use, however it could be available to tenants within the next 12 months. Read more.
Recent Housing Market News:
Brexit
With Boris Johnson now Prime Minister, the Brexit deadline of 31-October may be the final date to leave the EU. If you are concerned about the impact on the housing market, read this article on house prices after Brexit.
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