What investors need to know about residential buy-to-let laws in 2021
At present, 2021 is still very much a case of “watch this space”. That said, some law-changes look close to guaranteed to be implemented. Here is what you need to know.
Eviction ban extended until the end of March
Unlike the Stamp Duty holiday, the eviction ban has been extended (more than once). The latest extension is until the end of March. That said, it’s far from improbable that it will be extended again.
Eventually, however, the extensions will have to stop. It is to be hoped that, when they do, they will be combined with support measures to help tenants pay off arrears and hence stop evictions.
The end of “no-faults evictions”
Way back in April 2020, the government committed to ending Section 21 evictions, otherwise known as “no-fault evictions”. Had it not been for COVID19, it is highly likely that this would already have been done. As it was, however, this was one of the many issues which had to be put on the back burner.
Now that COVID19 seems to be coming under control, this could become a high priority for the government. While it might be a popular move, it could also prove to be a spectacular own goal.
Tenants evicted under Section 21, by definition, are held to be not at fault. This means that they can be considered for social housing. Tenants evicted under Section 8, by contrast, are, also by definition, considered to be at fault. Therefore, local authorities have no obligation to house them.
The end of landlords banning pets
Under the Renters’ Reform Bill, landlords will have to allow pets unless they have good reason to ban them. It’s expected that this will be passed into law towards the end of this year.
New requirements for letting agents
As of 1st April 2021, all lettings agents must be members of a client money protection scheme. They must display the scheme details on their website and also display a certificate of membership in any real-world premises. This requirement should have been implemented in April 2020 but was postponed due to circumstances.
New electrical safety standards
At present, landlords are only required to have an Electrical Installation Condition Report undertaken when signing up a new tenant. As of 1st April 2021, they will be required to have them undertaken on all tenanted properties. The checks must be repeated at least every five years and tenants must be given a copy of the report within 28 days of it being provided.
Right to rent continues
This isn’t a rule change, but a reminder that a rule is still active. The right to rent scheme has been backwards and forwards in the courts. In 2019 it was ruled discriminatory, but in 2020 this ruling was overturned on appeal. This means that, for the time being, it’s “business as usual” but there will presumably be updates to the acceptance criteria in response to Brexit.
The end of landlords banning tenants on benefits
As a final reminder, various legal judgements have made it very clear that it is illegal for landlords to implement a blanket ban on tenants on benefits.
Mark Burns is the managing director of property investment company Pure Investor, who specialise in UK property investment and Buy-to-Let Property Investment.
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