At Ainsworth Lord Estates, as landlords ourselves, we know how important it is to keep abreast on all the latest and upcoming legislation that could seriously affect us and our tenants. And with so many regulations and laws that today’s landlord must understand and adhere to, or face serious consequences, it can become really confusing! So with this in mind we have come up with the 5 most important legislation changes, happening from this Autmun onwards.
- New Fire Safety Laws
Following years of campaigning, all UK landlord will finally be required by law to install fully functioning smoke and carbon monoxide alarms from 10th October 2015. This means that it will be a compulsory requirement for all residential landlords to fit smoke alarms on every level of the property, as well as carbon monoxide alarms fitted in applicable properties – e.g. those that burn solid fuels. At the beginning of each new tenancy landlords (or their agents) will have to check that all alarms work correctly before signing anything, or they could incur a penalty of up to £5,000 for failing to comply.
Thought to help prevent up to 26 deaths and 670 injuries a year, it’s vital to remember that tenants must make sure that they regularly test these alarms throughout their tenancy to make sure they’re working. Therefore regular testing of these devices firmly remains the tenant’s responsibility.
So with around 445,000 smoke alarms and 40,000 carbon monoxide alarms now issued to every fire and rescue authority across England now is the time to act, to ensure you comply before the deadline.
- Universal Credit
Universal Credit is a single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that your tenants might be getting now. Welfare reform via Universal Credit replaces: Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance. Essentially, this means that tenants in receipt of benefits will have to pay their rent themselves, pay bills and budget for food, which is worrying many landlords that these tenants will inevitably fall into arrears, coupled with the recently announced welfare cuts.
This scheme has suffered many setbacks, mainly due to problems with the multi million pound IT system and staffing issues, but is expected to be fully rolled-out on a national scale by 2017. – So another ‘watch this space’ for further information on this flagship reform.
- Right to Rent
It’s predicted that the national implementation of Right to Rent Immigration Checks, where landlords and agents must determine whether a prospective tenant has the right to reside in the UK before tenure, will come into effect at the end of 2015. However there is no specific date set yet, following the Right to Rent pilot results from the West Midlands being deemed a ‘failure’ by critics.
Failure to conduct specific checks within the scheme, therefore providing accommodation to those who have no legal right to reside in Britain, could incur penalties of £1,000 per tenant rising to £3,000 (per tenant) for repeat offences. The checks also include lodgers, where failure to comply can incur forfeits of £80 per illegal lodger, increasing to £500 (per lodger) for repeat offences.
Once more is widely known on this issue we will update you as soon as possible.
- Buy to Let Wear and Tear Allowance Reform
The current system, allowing landlords who let furnished accommodation to claim 10% of their rent back on wear and tear, will be scrapped from April 2016. This means that, from April 6th 2016 for Income Tax purposes and April 1st for Corporation Tax, landlords will only be able to deduct costs that they actually incur. It will cover the cost of replacement furniture, furnishings, appliances and kitchenware that you provide for your tenants; including moveable furniture and furnishings, carpets and flooring, fridges/freezers, televisions, curtains, crockery or cutlery and linen.
Of course, welcome news to those of you who have mixed portfolios, part furnished or unfurnished property to let – but not so great for many of you who let accommodation exclusively on a furnished basis. Will tenants end up taking the hit, through landlords recouping their costs simply by increasing their rents? Or could there be a mass sell-off of homes on the horizon? – Only time will tell!
Any other questions or queries? Whether you’re a landlord who’s unhappy with the service levels being delivered by your current agent or a tenant who isn’t happy with their current living conditions, please don’t hesitate to get in touch with one of our friendly and knowledgeable team today; on 01254 760660 or email: Darwen@AinsworthLordEstates.com .