What does 2022 have in store for landlords?
As many landlords continue to feel the long-term impact of the Covid-19 pandemic, what do landlords need to know in 2022? Here are our top tips on what to watch out for this year:
- In 2019, the UK government consulted on abolishing Section 21 which allows landlords to end rolling tenancies with two months’ notice without providing justification. This proposal forms part of the Renters’ Reform Bill which has been repeatedly delayed by the pandemic. A white paper on proposals is expected in 2022. It is also likely that rental security deposits may be replaced by ‘lifetime deposits’ which move with the tenant.
- Currently the government is set to proceed with plans to improve energy efficiency in the private rented sector. Since April 2020, landlords can only let properties with an Energy Performance Certificate Rating of E or above unless they have an exemption. Landlords will now have until 2026 (extended by a year from the original 2025 deadline) to ensure all newly-let properties achieve band C on energy performance certificates, and 2028 for existing lets to meet the standard. Consultation closed early in 2021 on a recommended cap of £10,000 on costs landlords must pay for properties to reach the required standard but an update has yet to be received from the government. Government statistics suggest there are currently over 3 million rental properties with an EPC rating of D or below. Accordingly, many landlords will need to start working to improve energy efficiency ratings in 2022. One option for landlords is to replace gas boilers with a heat pump. From April 2022 landlords will be able to access grants of £5,000 to pay for costs associated with this.
- Rightmove revealed that the demand for rental properties allowing pets had increased by 120% in July 2021 compared to the same month in 2020. Despite this figure, the government suggests only 7% of landlords are pet friendly. Landlords will need to be conscious of the growing interest in pet friendly properties and the impact allowing pets may have on the available choice of tenants.
- An increasing number of lenders have now launched ‘green’ mortgages which offer lower rates for landlords who buy energy efficient properties in 2022. Banks have also started to offer additional borrowing to landlords at reduced rates if the funds are used to make sustainable improvements to their property portfolio.
- Monday 31 January 2022 marks the deadline for online self-assessment tax returns for the 2020-2021 tax year. Missing this deadline could result in landlords incurring a penalty. This return is the first on which the new mortgage interest tax relief credit applies whereby landlords can now only offset 20% of their mortgage interest payments when filing their tax returns.
- As per the Autumn 2021 Budget, filing deadlines for reporting and paying capital gains tax (CGT) on disposal of properties has been extended. This means landlords now have 60 days to report and pay any CGT when selling a buy-to-let property. The government have also confirmed there are no current plans to make any significant alterations to capital gains tax rates.
2022 is a complex time to be a landlord, but we’re here to help you get your head around the rules when investing in buy-to-let property and managing your portfolio. To ensure you are kept up to date with the latest announcements impacting the rental market, sign up to our landlord mailing list. Contact your local youngsRPS office for more information.