The Latest Updates on Landlord Certificates in the UK for 2024
If you are a landlord, listen up because some changes are coming into effect this year. We will discuss the latest updates on landlord certificates in 2024, plus some other related information.
While we will be only highlighting ten new updates, there are other ones you should look into. These updates affect not just the landlords but the tenants as well. The more you know about these changes, the better you will decide to pay and get rent.
Enhanced Tenant Protections
A new law, known as the Renters Reform Bill, is currently making its way through the government process, and there’s optimism that it will be enacted by the end of 2024. This legislation brings forth significant changes for individuals who rent homes.
Notably, there are the latest updates on landlord certificates in 2024 regarding the frequency of rent increases. To ensure fairness, tenants facing substantial rent hikes can address the issue through a tribunal.
Additionally, introducing an ombudsman aims to expedite conflict resolution between renters and landlords, minimizing the need for court proceedings. For pet enthusiasts, there’s good news – tenants can request to have a pet, and landlords are no longer allowed to refuse.
These alterations are designed to create a more equitable and improved rental experience for everyone. If all goes as planned, these rules may officially go into effect by the end of 2024.
Postponement of Section 21 Eviction Reforms
One noticeable absence in the upcoming changes outlined in the Renters Reform Bill for 2024 is the lack of a ban on Section 21 no-fault evictions. This ban was initially put forth in the 2019 Conservative Manifesto and was a vital element of the Bill.
Unfortunately, the implementation of this ban has been postponed, citing the necessity to make adjustments to the court system, and there is currently no specified timeline for its introduction.
While the delay in implementing the ban on no-fault evictions persists, the Bill does introduce heightened powers for landlords to evict tenants in cases of anti-social behavior or repeated failures to pay rent.
Despite the setback in one aspect, the Bill still aims to address issues related to tenant-landlord relationships, albeit with some modifications to the proposed initial reforms, amid the latest updates on landlord certificates in 2024.
End of Blanket Bans for Landlords
In November, the government introduced modifications to the Renters Reform Bill, making it against the law for landlords and letting agents to impose general restrictions on tenants receiving benefits or those with children.
This move is aimed at preventing discrimination against families and vulnerable individuals. The intended changes initially pertain to England and Wales. Still, they are expected to be extended to Scotland in subsequent stages of the parliamentary process.
It’s important to note that these alterations won’t apply to tenancies in Northern Ireland. However, landlords who enforce broad prohibitions could potentially violate anti-discrimination laws in that region.
The government’s objective with these amendments is to promote fair treatment and equal chances for all renters, irrespective of their financial situation or family status.
Continuing Trend: Landlords Selling Properties
In November, the government revealed its intentions to introduce the Decent Homes Standard to the rental sector, marking the first instance of such standards being applied to rented homes.
The proposed standards, to be determined following a consultation and deliberation as part of the Renters Reform Bill’s passage through parliament, will empower councils with enforcement authority to ensure landlords comply with these new benchmarks.
Landlords found in violation could be subject to fines of up to £30,000 and may also face banning orders. Additionally, affected tenants can seek compensation through rent repayment orders, allowing them to claim up to 24 months’ worth of rent.
This move aims to elevate the quality of rented accommodations and establish a framework for landlords to meet certain housing standards, ensuring a higher standard of living for tenants.
April Slash: Capital Gains Tax Allowances
In 2023, a shortage of affordable rental homes and rising costs for landlords caused a significant spike in rental prices. According to data from the estate agency Hamptons International, rents witnessed a year-on-year increase of 10.2% in November.
The most substantial upticks were observed in specific regions. Greater London is experiencing an 11.8% surge, followed closely by the East of England at 11.7% and the Midlands at 10.9%. These figures highlight the widespread nature of the escalating rental costs.
Projections for 2024 suggest that the trend of high rents and the latest updates on landlord certificates in 2024 is likely to persist. Estate agent Chestertons and property consultancy JLL anticipate a further 5% rent rise throughout the upcoming year.
This indicates that challenges related to affordable rental housing and economic factors for landlords may contribute to ongoing rises in rental expenses, raising potential concerns for tenants in the coming months.
Stricter Standards for Landlords
In 2023, landlords dealing with remortgaging faced significantly higher monthly repayments, a trend expected to continue 2024 for those seeking new deals or expanding their portfolios.
The current average buy-to-let fixed-rate mortgage is 6.02%, down from 6.40% a year ago but nearly double the 3.07% average in December 2021.
Despite the potential for a slight decline in rates due to falling inflation and a possible Bank of England base rate drop in late 2024, any reductions are likely to be modest. This emphasizes the ongoing challenge of elevated monthly repayments for landlords.
The Rise of Rental Costs
In September, the government halted specific new regulations concerning the energy efficiency of rented homes. The initial plan aimed to make all new rental properties reach a specified energy efficiency level (‘C’ on the Energy Performance Certificate) by 2025, with existing rentals required to meet this standard by 2028.
This potential expense raised concerns among landlords, and there were worries that the additional costs might be transferred to renters.
Stay informed about the latest updates on landlord certificates in 2024, as these developments can impact the overall landscape of energy efficiency regulations in the rental sector.
Gradual Decline: Buy-To-Let Mortgage Rates
Buy-to-let profits hit their lowest levels since 2007 earlier this year, dropping below 4% for landlords with mortgages, according to Savills.
The increased sell-off of buy-to-let properties, notably due to changes in mortgage interest tax relief, is evident in Hamptons’ data. It shows that almost 300,000 more rented homes have been sold than purchased since 2016.
According to a recent survey by Confused.com, 52% of landlords are worried about upcoming reforms in 2024, and 10% are considering selling their properties entirely. This underscores the challenges currently faced in the buy-to-let market.
Abandonment of Energy Reforms
In 2024, landlords looking to sell their buy-to-let properties may face increased capital gains tax (CGT) bills. The journey began in April 2023 when the tax-free allowance for capital gains dropped from £12,300 to £6,000.
Fast forward to April 6, 2024, and this allowance is set to be halved once again, landing at a mere £3,000. Any profits exceeding this threshold will be subject to taxation for landlords selling their properties, considering allowable deductions like selling fees.
It’s important to note that the current CGT rates for property will remain steady in 2024 – 18% for basic-rate taxpayers and 28% for those in the higher-rate bracket. This shift in tax policies underscores the evolving landscape for property investors in the coming year.
Delay in Making Tax Digital Implementation
The government’s tax modernization initiative, Making Tax Digital (MTD), has faced a two-year delay.
Starting from April 2026, it will become compulsory for self-employed landlords with income exceeding £50,000. For those with income surpassing £30,000, the requirement will commence from April 2027.
Instead of the conventional way of filing a self-assessment tax return, self-employed landlords must utilize the MTD system. This involves maintaining digital records and submitting revises on their business income and expenses to HMRC every three months.
This shift in the timeline for MTD implementation brings adjustments to the tax procedures for self-employed landlords in the specified income brackets.
Further Readings: Fire Safety Certificates for London Landlords
Conclusion
If you rent or pay rent for a property, then you must be aware of the changes being made each year. The more you know about the latest updates on landlord certificates in 2024, the better off you will be regarding your property.
These changes impact your living conditions, so pay special attention to them. In this article, we only highlighted the ten most important updates, but more are bound to come as the months go by.
FAQs
How often do I need to update my landlord certificates?
The frequency of updates varies for different certificates. It’s important to check the specific requirements for each type regularly.
Can technology help me manage my certificates more efficiently?
Absolutely! Numerous apps and software solutions are designed to streamline certificate management and keep you organized.
What are the consequences of not having up-to-date certificates?
Non-compliance can lead to financial penalties, legal troubles, and even eviction of tenants in extreme cases.
Are there any tax benefits associated with maintaining updated certificates?
While there might not be direct tax benefits, having up-to-date certificates can enhance the value of your property, potentially impacting your overall financial portfolio.
How can I stay updated about the latest updates in landlord certification in 2024?
Regularly check official government websites, attend industry seminars, and subscribe to newsletters or updates from relevant authorities.
