Housing Legislation changes in 2020
Here is the essential run down of housing legislation changes coming in 2020
Energy Performance Certificates (EPC)
From April 1, 2020 homes cannot be let to new tenants unless the EPC rating is E or better.
This means that anyone whose rental homes have F or G ratings will no longer be able to legally let them out.
New rules came in on the 1st April 2019, requiring landlords to pay for energy efficiency upgrades to a minimum of £3.5K (incl VAT) per property. Where this expenditure does not trigger an E rating or above, landlords can register for a 5-year exemption.
Exemptions apply including tenant refusal to have the works done.
Capital Gains Tax changes on private residences (CGT)
From April 6th, 2020 landlords will only be able to claim lettings relief if they share the property with their tenant and the full amount of CGT owed on a property sale will need to be paid within 30 days. We will also see a reduction in tax relief regarding the final period of property ownership before sale. This will reduce from 18 months to 9 months.
Currently if you sell a residential property which used to be your private residence and it was rented out, it is possible to deduct letting relief up to £40,000 from any capital gain.
Mandatory CMP for agents
New rules on money laundering have been extended to cover letting agents, with an April 2020 deadline for agents to join an official Client Money Protection scheme
Extension of the Homes (Fitness for Human Habitation) Act 2019
From March 1, 2020, all tenancies will fall in line with the existing law introduced on the 1st March 2019, whereby landlords or agents acting on their behalf can be sued if homes have Housing Health & Safety Rating System (HHSRS) or Health & Safety issues.
Until April 2020 it applies only to tenants who signed agreements on or after 20 March 2019.
Extension of the Tenant Fees Act 2019
From the 1st June 2019 on all new tenancies, letting fees other than rents, deposits, holding deposits and charges for defaulting on contracts have been banned.
From June this year, the ban applies to all existing tenancies.
The main feature of the legislation means landlords and their agents can no longer charge fees regarding AST’s, tenancies of student accommodation and licences to occupy. .
Where a banned fee has been levied, tenants will be able to claim through the court. System. Landlords/Agents can be liable to fines up to £5,000 for a first offence, and £30,0000 for subsequent breaches.
Repeal of Section 21
No fault eviction under Section 21 is being abolished. We are unsure on the timetable; progress is likely to take some time if the Tenant Fees Act is a guide, this was first mentioned in November 2016 but only came into force in June 2019.
However the Queen’s Speech on 19th December confirms the government is going for the full abolition of Section 21, but will offer a “strengthening of rights” to landlords needing to go to court to gain possession of their property when they have a valid reason to do so.
There is concern, if the final legislation is badly drafted, it is likely to force landlords to be pickier about who they rent to and risk a mass sell-off of properties.
The Renters Reform Bill as the government calls it will introduce a package of reforms intended to deliver a “fairer and more effective” rental market.
The main elements of the Bill are:
- Abolishing the use of ‘no fault’ evictions by removing section 21 of the Housing Act 1988 and reforming the grounds for possession
- Giving landlords more rights to gain possession through the courts where there is a legitimate need for them to do so
- An improved court process for landlords
- Introducing a new portable lifetime deposit so tenants don’t need to save for a new deposit every time they move to a new house
- Wider access to the rogue landlord and letting agent database
Housing Secretary pledges new funding to crackdown on criminal landlords
More than 100 councils across England have been awarded a share of over £4 million to crack down on criminal landlords and letting agents. Nottingham and Northampton are included.
The grants will support a range of projects to enable councils to make the best use of these powers. This will include trialling innovative ideas, sharing best practice and targeted enforcement where we know landlords shirk their responsibilities.