As 2015 draws to a close, we look at some of the biggest stories affecting landlords in the past 12 months…
January: Home ownership rate in UK well below European average
The year kicked off with figures from the EU demonstrating that the UK has one of Europe's lowest home ownership rates. Eurostat claimed in that home ownership in Britain stood at 64.6% in 2013, the European average being 70% and the highest on the continent being recorded in Romania at 95.6%.
Much of the early part of 2015 was dominated by talk of May's General Election. The Residential Landlords Association (RLA) took the opportunity to launch a manifesto containing a number of proposals for the Private Rented Sector (PRS).
February: Landlords learn of strict energy efficiency measures
We then found out that there were a record number of buy-to-let mortgages available for landlords. Mortgages for Business reported that there were 817 different products, a rise of 17% when compared to Q3 2014.
During this month we also learnt more about the Government's plans to increase energy efficiency in rental properties. From April 1 2018, it will become illegal to let a property with an energy efficiency rating of F- or G-.
March: Smoke and carbon monoxide alarms to become mandatory
One of the biggest stories to hit the news during March centred around smoke detectors and carbon monoxide alarms. It was confirmed that it would become mandatory later in the year for all rental properties to have these safety precautions fitted.
Meanwhile, discourse around the election continued apace. With the big day just two months away, large letting agency Hunters claimed that 60% of its landlords would exit the PRS if rent controls, as proposed by the Labour Party, were introduced.
There was also somewhat of a revelation in the small print of the latest Budget. Plans to make it illegal for landlords to prevent sub-letting were revealed, although they were subsequently shelved later in the year.
April: First Right to Rent pilot results announced
The first results of the Right to Rent pilot project were revealed in early April – the headline figure being that the helpline set up by the Government received 636 inquiries. It also became clear around this time of the year that Right to Rent would be rolled out on a national basis at some point in the future – something that would have implications for landlords and their letting agents.
Also during the fourth month of the year, the Labour Party revealed its election manifesto. Three proposed policies in particular struck a chord with the rental industry – rent caps, minimum three-year tenancies and a ban on letting agent fees charged to tenants.
May: Landlords await election result
The General Election took place on May 7 and the Conservatives succeeded in securing a majority of 331 seats. Many involved in the PRS were pleased with the result as it meant Labour's aforementioned policies would not be implemented.
The Conservatives' housing policies focused more on home ownership and it was expected that in the months to come the Right to Buy scheme would be extended, a Help to Buy ISA would be introduced and a large scale housebuilding programme would be announced.
There was another industry milestone in May when it became law for all letting agents to publicly disclose the fees they charge to landlords and tenants on their websites and in their offices. Part of the Consumer Rights Act 2015, the legislation also requires agents to make it clear which of the three Government-approved redress schemes they have joined and whether or not they offer Client Money Protection.
June: Tenants and their Landlords hit the small screen
June marked the start of a new TV series focusing on the PRS. Channel 5 show Nightmare Tenants, Slum Landlords covered a number of renting issues, including abusive tenants and sub-letting scams.
Another important legislation deadline approached landlords at this time. Any deposits taken before April 6 2007, that have since been renewed or become statutory periodic, had to be protected under one of the three government-approved schemes by June 23.
July: Summer Budget brings landlord tax changes
In one of his first public acts after the Conservatives were re-elected, Chancellor George Osborne had to deliver his Summer Budget in July. There were a number of housing-related to measures that caused a stir. The principal of which was the announcement that mortgage interest tax relief for purchasers of buy-to-let homes will be restricted to the basic rate of income tax over the next four years. It was also announced that the tax-free Rent-A-Room limit would be increased from £4,250 to £7,500.
What's more, the Budget included the information that the formal Wear and Tear Allowance would be scrapped from April 2016. The replacement system is a relief that instead allows landlords to deduct the costs they actually incur on replacing furnishings in the property.
In the same month it also became apparent that every Welsh landlord would have to be licensed under a new scheme called Rent Smart Wales. The initiative also requires some landlords to undergo training as well as proving that they are 'fit and proper' in order to obtain a licence.
August: Online petition against Budget tax changes gathers momentum
After the dust had settled on the buy-to-let measures announced in the Summer Budget, just a month later in August, an online petition that was set up in opposition to George Osborne's proposals reached the 10,000 signature milestone. This meant the Government had to formally respond to the petition. The next milestone is 100,000 which must be reached by the end of January 2016 in order for the issue to be debated in parliament. The petition currently has over 43,000 signatures.
Still with the Government, and Housing Minister Brandon Lewis confirmed in an interview with the Sunday Times that longer standard tenancy agreements would not be introduced.
September: Incoming fire safety regulations suffer Lords defeat
With just a month to go until high profile legislative changes concerning the Section 21 eviction process, smoke detectors and carbon monoxide alarms, much of September was dominated by debate and confusion over the new rules. It was pointed out that there was a drafting error in the Government's Section 21 amendments, while the start date for the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 remained October 1 – despite a House of Lords defeat just a week earlier.
Elsewhere, the Local Government Association polled the public and found that over 70% of participants favour jail sentences for criminal landlords.
October: Section 21 eviction process changes for good
Of course, October saw the legal introduction of the aforementioned legislative changes but there was also big news concerning the Right to Rent scheme. It was announced that the scheme would be rolled out on a national basis from February 1 2016. Landlords or their agents will be required to check the immigration status of prospective tenants or face penalties of up to £3,000 per tenant. We've been working on a tool which helps agents integrate Right to Rent checks into their existing processes. To find out more, ask your letting agent about HomeLet Verify.
November: Stamp duty hike on buy-to-let purchases announced
Some 8 in 10 renters want tenancy agreements of one year or less, a survey of almost 40,000 tenants carried out by the Deposit Protection Service revealed in November.
The biggest story of the month, though, once again centred on George Osborne. Among a raft of housing policies, the Chancellor announced in his Spending Review that from April next year, stamp duty on purchases of buy-to-let properties or second homes will be charged at 3%.
December: Wear and Tear Allowance changes to go ahead from April
Now December might traditionally mark the start of a slow period for news but there was still a big story this month. HMRC published the responses it received to its consultation on changing the Wear and Tear Allowance. After only 170 responses were received, the Government confirmed that it will be going ahead with the proposed changes – set to come into force in April.
Some key dates for your diary in 2016:
January 31 – Final due date to file 2014/15 self assessment tax return online
February 1 – Right to Rent scheme starts across England
April 1 – Tenant’s Energy Efficiency Improvements regulations introduced
April – Additional stamp duty on buy-to-let property purchases introduced
April – Wear and tear replacement system introduced
October 31 – Deadline to file 2015/16 self assessment tax return on paper
November 23 – Deadline for Welsh landlords to join Rent Smart Wales