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2021 legislation changes for landlords

We are two months into the year, so what will the rest of 2021 bring for landlords? Here we look at some of the upcoming legislation changes. (Please note that this legislation is correct at the time of writing).

Evictions

One of the most significant legislative changes you might actually welcome. This is the return at the end of March to a more normal and familiar regime for evictions in England and Wales.

You will know that government pledged to help tenants during the successive rounds of lockdown by first of all putting eviction proceedings on hold and then requiring landlords to give at least six months’ notice of any intention to evict. As Which? magazine explained on the 4th of January, the only exceptions to this rule are if the tenant is more than six months in arrears with the rent, obtained the tenancy under false pretences, or has been convicted of anti-social behaviour.

In England and Wales, those rules end on the 31st of March and the situation reverts to the situation pre-pandemic.

The rules have been slightly different in Scotland and Northern Ireland, where a return to the pre-lockdown regime is also expected.

Electrical Safety Standards

The 1st of April is the last date on which you need to have completed the now obligatory electrical safety checks – and have a satisfactory Electrical Installation Condition Report (EICR) – in any let property you own as a landlord.

Despite an attempt by the Association of Residential Letting Agents (ARLA) to get the government to delay this deadline – because of the large number of its members that own more than 60 properties that would have to be checked – the effective date remains.

By the 1st of April, therefore, the law says that you must be in possession of an electrical safety certificate for any let property – and must have the electrical installation checked again at least once every five years.

Client Money Protection

The 1st of April is also the final date for complying with the legislation that requires all letting agents to arrange membership of a client money protection scheme – which is, essentially, a way to ensure that letting agents have insurance to protect any tenants’ or landlords’ funds they hold.

Enforcement of the effective date has been delayed twice already – because of the coronavirus pandemic – explains Client Money Protect – but this 1st of April is certain to be the final deadline.

Stamp Duty for foreign buyers

With effect from the 1st of April, all non-UK buyers of residential property in England and Northern Ireland – whether as an investment or to live in themselves – must pay an additional 2% Stamp Duty surcharge. The stamp duty surcharge of a further 3% is also payable if the property is a second home – wherever in the world your existing principal home may be.

Bankers JP Morgan have pointed out that partial relief of the 2% surcharge had existed for foreign buyers completing their purchase of property valued at less than ÂŁ500,000 between the 8th of July 2020 and the 31st of March 2021. That partial relief expires at the end of March.

Partial relief on the tax payable reflected the Stamp Duty holiday available to UK nationals – who also had to pay the 3% surcharge on the purchase of second homes and buy to let properties.

It remains to be seen whether the new 2% surcharge – in addition to the existing 3% surcharge on second homes – will further discourage foreign investors from purchasing buy to let property in the UK.

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