The Government is pressing ahead with a raft of changes which could have a profound effect on the UK property market over the course of the next few months.
Maunder Taylor offer residential block management services in Barnet and across North London and Hertfordshire. Here we look at the forthcoming legislation which could affect both landlords and tenants.
Changes to this controversial area are already well under way. The Government’s Leasehold Reform Bill recommended that ground rents on any new homes built in England and Wales should be set at ‘one peppercorn’ per year. This effectively means that homeowners who only buy leases won’t pay anything at all (or a negligible amount) in ground rent.
The Bill was passed unopposed by MPs in the House of Commons in November 2021, having already been approved by the House of Lords. MPs will have a further chance to scrutinise it this year before it becomes law.
Developers are on board with this as well. Just before Christmas, Taylor Wimpey announced that thousands of leaseholders who bought homes from them would no longer be subjected to ground rents that double every 10 years. The change follows action by the Competition and Markets Authority (CMA).
In September 2021, Countryside Properties had stated that anyone who bought a leasehold from them would no longer be subjected to ground rents that doubled every 10 or 15 years; and in June 2021, Persimmon agreed that leaseholders could buy the freehold of their property at a discount.
The Renters’ Reform Bill
The progress of this has been repeatedly delayed by the coronavirus pandemic and the Government says that a White Paper on the proposals will be published at some point in the New Year.
Key elements of the Bill are likely to include the abolition of the so-called ‘no-fault’ evictions or Section 21 as it has become known. This allowed landlords to end ‘rolling tenancies’ with two months’ notice, without having to give a reason to the renter.
The Bill also includes proposals to replace rental security deposits with a ‘lifetime deposit’ that moves with the tenant. Another plan incorporated in the legislation is to make a database of ‘rogue landlords’ available to the public.
Energy efficiency in the private rented sector in 2022 is also going to change. Landlords will have until 2026 (a year longer than the original deadline of 2025) to ensure all newly-let properties achieve Band C on energy performance certificates (EPCs) and 2028 for existing lets to meet the requirement.
A consultation on the proposed changes, which recommended a £10,000 cap on the costs landlords must pay for upgrades, closed in January 2021, but the government has yet to provide an update. So landlords don’t know if any funding will be made available to meet the cost of any improvements.
The Government this week announced changes to the cladding support scheme for all leaseholders living in multi-storey buildings. Housing Secretary Michael Gove said they would not be expecting anyone living in a building between 11-18metres high to contribute towards the cost of removing and replacing potentially dangerous cladding. (Previously the rules applied to buildings over 18m high).
Instead, developers are expected to bear the cost themselves. Mr Gove has imposed a March deadline on companies to agree the fine detail; otherwise, he says, the Government may bring in their own legislation.
The support scheme was brought in following the 2017 Grenfell tragedy, where 72 people lost their lives in a blaze which spread through the tower block’s flammable cladding.
Tax Relief Changes
The 20-21 tax year is the first on which the new mortgage interest tax relief credit applies. The controversial credit, which the government has been gradually phasing in since 2017, means landlords can now only offset 20% of their mortgage interest payments when filing their tax return.
Remember, your self-assessment tax returns for the 2020-21 financial year need to be submitted to HMRC by Monday, 31 January 2022.
Residential Block Management in Barnet from Maunder Taylor
Maunder Taylor have represented landlords and tenants in a variety of situations over the years, particularly in the areas of property lease extensions and negotiations in Hertfordshire and North London.
We recognise how important it is for all parties to be fully informed of any legal changes and would always prefer to settle any disputes or difficulties by negotiation rather than legal action – although we can help out here too, as we provide dispute resolution and expert witness services should a matter ever end up in court.
If you would like to know more about any of our services, follow this link and fill in the online form or call us on 020 8446 0011. If you have any residential block management queries, call us at 01707 665 666.