Theresa Maybe – PRS Regulations left up in the air?

Theresa Maybe – PRS Regulations left up in the air?

Last month’s Queen’s Speech saw the promise of a draft Bill to enact the ban on letting fees to tenants. Although, with more than 4,700 responses to the consultation on the ban which will inform the content of that draft Bill, the Government may take a bit of time getting it written and published.

While we are sure that letting fees will eventually be banned in some form or another, not least because every party had it in their election manifestos, the timeline is a bit more of a guess.

With the Department for Communities & Local Government now having to work on the draft Tenants’ Fees Bill, as well as deal with the repercussions of the Grenfell Tower tragedy, will there be too much on their plate?

Add to that the complications arising from Brexit inevitably taking up a lot of Parliamentary time and it isn’t inconceivable that some other, previously announced policy may be quietly dropped.

But what is still left outstanding for the private rented sector?

Extending HMO Licensing

Over 18 months ago the Government published a technical discussion paper on extending the mandatory licensing of houses in multiple occupation (HMO).

Then we waited patiently on the outcome of that “discussion paper” for almost a year, until the Government released a full consultation in October last year, in which they outlined plans to:

  • Remove the storey rule so all houses with 5 or more people from 2 or more households are in scope
  • Extend mandatory licensing to flats above and below business premises (regardless of storeys)
  • Set a minimum size of 6.52sq-m in line with existing overcrowding standard (Housing Act 1985) to close loophole created by upper-tier tribunal ruling

The changes were originally proposed to come into force in 2017 (either April or October), and there would be a grace period of 6 months for landlords to apply for a license.

Six months have now passed since that consultation ended and we haven’t heard a peep about it since.

Reform of Sub-letting

Back in the March 2015 Budget, the last of the Coalition Government, then-Chancellor George Osborne announced that the Government will be looking at reforming sub-letting.

The Government was to look to “clarify and strengthen” landlords’ legal responsibilities when considering requests from tenants to sub-let, as well as extend those responsibilities to requests from tenants on the sharing of space more generally.

It was also intending to legislate on preventing the use of clauses in fixed-term tenancy agreements that expressly prohibit sub-letting, and possibly extend this to statutory periodic tenancies too. The aim was for landlords to “always have to consider tenants’ requests reasonably”.

Two months after that Budget there was an election that returned a majority Conservative Government, and we haven’t seen any consultation or legislation to enact this promise. Since then we’ve also gone through an EU referendum, change in Prime Minister, and the loss of the Conservative’s majority.

Has this been dropped by the new Theresa May Government? Time will tell.

Rent-a-Room Relief

In the now infamous Summer Budget of 2015, which introduced the restrictions to landlords’ mortgage interest tax relief, the Rent-a-Room relief was increased to £7,500 from the £4,250 it had been frozen at since its inception in 1997.

In the Spring Budget in March this year, the Government set out its commitment to “consult on proposals to redesign rent-a-room relief, to ensure it is better targeted to support longer-term lettings”.

As with the previous items, we have heard nothing about this proposed consultation since.

Ill-defined timelines…

There are a number of things that are still in the pipeline, but an actual timeline for their introduction is not in place, including:

  • Mandatory electrical safety checks
  • A new, streamlined abandonment procedure
  • Mandating Client Money Protection for landlords and agents
  • Making Tax Digital – mandating of quarterly reporting for landlords with turnover above £10,000 (Update: The Government has now backed down on this.)

Now with the election over, and new ministers in place, maybe we’ll start to see some progress so landlords can at least be certain of their regulatory future, and plan accordingly!

5 thoughts on “Theresa Maybe – PRS Regulations left up in the air?

  1. Is the 2020 deadline for Landlords 3 monthly digital returns for year ending 5th April 2020 or year starting
    April 6th 2020. You do not specify.

  2. I think the quarterly reporting threshold of £10,000 is too low. It encompasses too many accidental and small landlords who aren’t running a business but trying to Fermin with their lives with a residual income.
    Business practises should be left to business people who make a much bigger return and can justify the time it takes to prepare accounts with the higher turnover and potentially higher yield from multiple properties as part of a business.
    £20-25k turnover threshold is much more realistic.

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