2022 will see further legislation on a host of issues important to landlords and tenants alike – and no doubt some which may only impact one or the other, so we’ve put together a list of a few things we believe will be important to keep your eyes on over the coming year.
1. Energy Efficiency
With new tenancies requiring an EPC rating of at least a D from April 2022, landlords will need to spend the early part of the year ensuring that their properties are up to scratch. With plenty of issues caused by confusion and mismanagement at a governmental level (including the collapse of the Green Homes Grants), however, there are plenty of calls for more help for landlords. Propertymark CEO Nathan Emerson stated:
While there’s not much landlords can do beyond writing to their MPs to address the situation at present, calls for further help, or at least more time, may be bolstered by the ongoing pandemic.
2. Changes to legal advice for tenants
With the consultation set to end on the 20th of January, the next year will likely see the introduction of new ‘on-the-day’ legal advice for tenants facing eviction. The changes – which we covered earlier this month – aim to reduce the need for disputes to reach the point of eviction by ensuring that tenants receive timely and appropriate legal advice from early in the process.
While the wheels of government turn slowly, these changes are a fair way along the road to introduction, meaning that tenants and landlords should ensure that they are keeping up to date with changes. Hopefully this will lead to positive outcomes for both landlords and tenants nationwide by reducing the number of disputes that reach a point of critical failure resulting in eviction.
3. Updated guidance on alarms
Announced in November, guidance on where alarms must be placed in rental properties is set to change following consultation. Though the government has yet to publish its promised guidance, it’s likely to come in the first quarter or 2022 – and with councils set to receive new powers to ensure compliance, it will be necessary for landlords to keep up-to-date with the process to avoid any penalties that could result.
The new regulations, as far as we know at present, will not require landlords to go too far beyond best practice guidance, but will see an increased burden of responsibility to ensure that alarms are kept in working order or replaced when this is not possible.
4. Interest rate rises
It may be time to lock in an interest rate, it seems, as the Bank of England seeks to address inflation by planning to raise interest rates between one and three times in the early part of 2022. Inflation, which negatively impacts the buying power of UK citizens, but importantly also reduces the value of debt, is historically linked to either cost-push (increasing cost of business) or demand-pull (more money being spent than usual). During the pandemic and ongoing problems with Brexit, both situations are true at once – making for an increased upward pressure.
Rather than address issues with supply and increasing minimum wage (minimum wage increases, while being an upward pressure on inflation, has been proven by government research to have a small impact with a 10% increase in minimum wage expected to lead to a 0.02 to 0.11% increase in the price of goods) which could address both sides of the equation, the Bank of England will look to restrict the flow of money by increasing the overall value of debt. This, along with a rise in national insurance rather than progressive tax initiatives, will more severely impact low- and middle-income households – meaning that landlords should both look for a move to a fixed rate mortgage and potentially for rent insurance in case the changes lead to another recession and the issues that can cause the rental market.
5. Renters’ Reform Bill
While the true impact of the long awaited ‘Renters’ Reform Bill’ will likely be felt in 2023, the initial report will allow landlords to begin planning for when the changes are implemented. With a large number of changes expected for 2023/24, any progress that landlords can make in addressing the proposed changes in 2022 will allow them to focus their attention on the other issues on the horizon (such as the making tax digital deadline). The likely changes include:
- The end of Section 21 evictions, replaced by more comprehensive Section 8 guidance
- The introduction of ‘lifetime deposits’ for tenants to reduce costs associated with moving between rental properties
- Opening the database of rogue landlords and letting agents to the public to improve transparency
2022 still sees landlords facing the uncertainties of Brexit and the pandemic, but there are also more predictable issues that landlords will need to prepare for in the new year. If you’d like some help navigating them, then you can Contact Us for expert advice.