As a landlord, it pays to know what the market will be like months ahead so you can plan accordingly.
And, in recent years, there have been some quite significant changes for the lettings sector to come to terms with.
This looks set to be the same in 2023, with several potential changes in the offing – some confirmed, some potential.
Below, we look at what landlords need to keep an eye out for.
Fire safety changes
Coming into force on January 23 2023, the Fire Safety (England) Regulations 2022 will implement the majority of the recommendations the Grenfell Tower Inquiry made in its Phase 1 report, which required an amendment in the law.
According to the Government, the new regulations aim to improve the fire safety of blocks of flats in ways that are 'practical, cost-effective for individual leaseholders and proportionate to the risk of fire'.
The changes will mean the following for various buildings and will most impact landlords with rental homes in higher-rise and multi-occupied buildings.
Responsible persons must, for high-rise residential buildings (which counts as a multi-occupied residential building at least 18 metres in height or seven or more storeys):
- Share electronically with their local fire and rescue service (FRS) information about the building's external wall system and provide the FRS with electronic copies of floor plans and building plans for the building
- keep hard copies of the building's floor plans, in addition to a single-page orientation plan of the building, and the name and UK contact details of the responsible person in a secure information box which is accessible by firefighters
- install wayfinding signage in all high-rise buildings, which is visible in low-light conditions
- establish a minimum of monthly checks on lifts which are for the use of firefighters in high-rise residential buildings, and on essential pieces of firefighting equipment
- inform the FRS if a lift used by firefighters or any firefighting equipment is out of order for longer than 24 hours.
Meanwhile, for multi-occupied residential buildings over 11 metres in height, the new regulations state that responsible persons must undertake quarterly checks on all communal fire doors and annual checks on flat entrance doors
Furthermore, in all multi-occupied residential buildings, responsible persons must provide residents with relevant fire safety instructions and information about the importance of fire doors
Fire safety is one of a landlord's most important obligations, so it's vital that landlords – or the letting agents working on their behalf – get to grips with how these changes might affect them.
Date: January 2023
Capital gains tax changes
Another change we know is definitely coming in is the reduction of the CGT tax-free allowance, from £12,300 down to £6,000 from April 2023.
This will mean landlords who are selling will face higher costs, which could lead them to either reconsider selling, sell in the first few months of 2023 before the change is implemented, or try to reduce their CGT burden through various methods.
You can find out more about the CGT tax changes announced in the Autumn Statement here.
Date: April 2023
Further Budget changes
The Government hasn't set any dates for a Budget or Autumn Statement for 2023, but this is almost certain to happen at some point, given the delicate nature of Britain's finances and the UK economy.
Some landlords may fear further tax or regulatory changes – in line with most other recent fiscal events – but the significant rental reform changes happening elsewhere may see the Government switch their focus to other areas for the time being.
There are no guarantees over this, so landlords should keep a close eye on any significant Government address as and when they happen to ensure they are entirely up to speed with any changes.
Rental reform changes
These widespread changes to the lettings sector have had more momentum behind them again since Michael Gove returned as Housing Secretary, but exactly when the Renters' Reform Bill will make it before Parliament is less certain.
Gove has said the reforms would be introduced in 2023, but we've been here before many times. It seems likely the eventual Bill will face some opposition and therefore take some time to make it through the various parliamentary stages. So, even if the Bill is introduced at some point this year, there are no guarantees that it will become law before the year is out.
Despite this, it's something for landlords to keep a keen eye on, with the reforms including such major changes as the abolition of Section 21 and the creation of a new landlord property portal.