The Renters Reform Bill was mentioned during the Queens speech and has cross party support. The bill intends to remove tenants from rental homes without good reason. The media response to this statement has been nothing short of scare mongering. In fact, the reform is designed to make the process better for all. Landlords will still be able to take possession of their property with valid reasons such as a sale, renovation or moving back into the property but protects tenants from being removed with no reason.
The normal breaches of tenancy will still be actionable in the same way and the plans are to also make the process of removing tenants in breach easier, quicker and easier to navigate. It aims to put more legal rights back in the hands of landlords. The current system is confusing, often delayed and frustrating. We feel this area of reform implemented properly will be a positive change.
Another idea being proposed is the concept of a Lifetime Deposit for tenants that can be transferred between properties. Whilst a logical step that could reduce the barrier of entry for tenants and increase demand, we feel this area needs further clarification. Certainly, the area of how deductions are managed needs to be carefully considered. The Association of Residential Lettings Agents, of which Sowerbys are a member, continue to engage with government office to ensure policy is well thought out and industry experts are listened to and landlords are protected.
Alternative Deposit Schemes continue to gather support from renters and Landlords alike although we urge landlords to choose agents who use reputable and transparent schemes. At Sowerbys we have seen high demand for our no deposit option ‘Flatfair’, that aims to make renting fairer and better for all. Tenants are attracted to lower upfront costs, thus boosting rental enquires and lowering landlord void periods. Landlords are also reassured by the increase of 12 weeks protection rather than the recently capped 5 weeks introduced as part of the Tenant Fee Act 2019. We continue to offer both landlords and tenants choice and always look to offer our clients the latest benefits to launch to the market.
EPC regulations take full effect in April 2020 in line with the Government’s commitment to energy reform. This means all properties let and current tenancies will need to have an EPC of E or above. Certain properties will be exempt such as listed buildings or properties where the landlord has demonstrated all options to improve within reason have been met.
Buy to Let Mortgage Rates continued to fall in 2019 with some of the lowest rates ever seen. We expect these levels to remain static in 2020 as competition between lenders continues. As we said in one of our previous blog posts, Halifax announced the first sub 1% rate last year which is incredible value for landlords that meet the criteria. If you require any financial assistance, please contact your local Sowerbys team who can arrange a free appointment with our partners at Broadland Financial services.
In July 2020, Electrical Safety Tests, otherwise known as Electrical Installation Condition Reports (EICR) will become law for all new tenancies created, followed by all tenancies in April. This has long been campaigned for and with recent high-profile disasters such as Grenfell Tower we fully welcome this Introduction. We will be negotiating special rates with contractors based on volume to keep costs for our landlords to an absolute minimum.