Welcome to our monthly newsletter for property landlords. We hope you find this informative and please contact us to discuss any matters further.
New laws for commercial rent debts
The UK Government have announced that new laws will be introduced to combat commercial rent debts incurred because of the pandemic.
Commercial tenants are currently protected from eviction until 25 March 2022 due to the government’s eviction protection rules put in place last year.
In November 2021, the government published a new Code of Practice that provides landlords and tenants with a specific process for coming to an agreement on settling outstanding debts.
For instance, the Code states that “tenants who are unable to pay in full should, in the first instance, negotiate with their landlord in the expectation that the landlord will share the burden where they are able to do so”.
In addition to the Code of Practice, new laws will be implemented in England and Wales from 25 March 2022.
These laws establish a legally binding arbitration process for tenants and landlords who haven’t reached an agreement on the outstanding debts.
The laws will only apply to commercial rent debts related to the mandatory closure of certain businesses during the pandemic. This includes pubs, restaurants, gyms and other hospitality and tourism businesses.
Government grants for low-carbon heat pumps
From April 2022, government grants will be available to homeowners in England and Wales to replace their gas boilers with low carbon alternatives.
The £5,000 grants will incentivise homeowners to make the switch while reducing Britain’s dependency on fossil fuels and creating thousands of jobs.
The most common low-carbon heating systems are air source heat pumps which cost between £6,000 to £18,000.
Within a few years, industry leaders expect heat pumps to cost the same to buy and run as gas boilers.
Although there haven’t been many details published about the grant, the government has stated that no one will be forced to remove their existing fossil fuel boilers in the near future. However, as this is part of a 14-year plan, it is expected that by 2035 all UK homes will have new heating systems installed.
More details about the grant will be published in the coming months.
Authorities failing to prosecute criminal landlords
Figures obtained by the Nationwide Residential Landlords Affiliation (NRLA) have proved that thousands of criminal landlords are being let off the hook as councils fail to prosecute them for the inadequate state or management of their rental properties.
The data found that between 2018 and 2021, 67% of local authorities had not charged a single landlord for these offences.
An additional 10% of local authorities had only made one successful prosecution in the 3 year period.
The majority of prosecutions were in Southwark, Birmingham and Hull which together amounted to 38% of all prosecutions in England.
Due to these concerning figures, the government has promised to publish a white paper in 2022 on the reform of the private rented sector. The Nationwide Residential Landlords Affiliation has also urged the government to provide funding to councils to ensure that they have the resources needed to take the appropriate action against criminal landlords.
It is the landlord’s responsibility to make sure that they are in compliance with all of the local laws when renting out a property. Failure to do so can result in hefty fines of up to £30,000 or even prison sentences, depending on the severity of the infraction
For example, landlords may receive a six-month prison sentence or fine if they cannot provide their tenants with valid gas safety certificates.
Huge increase in second homes flipped to holiday lets
Government figures show that the number of second homes trading as businesses has increased by more than 20% since March 2020.
This means that more than 11,000 second homeowners in England have flipped their properties since the beginning of the pandemic. Foreign travel restrictions were a huge factor in this surge as domestic holidays were increasingly popular.
Converting your second home into a holiday let can not only help you earn additional income, but it may also be beneficial for tax purposes.
If your holiday home qualifies as a Furnished Holiday Let (FHL), you can receive Capital Gains Tax relief and capital allowances for furniture and fixtures.
With the rental prices increasing in holiday hotspots, this makes FHL’s even more attractive.
Please get in touch with us to learn more about Furnished Holiday Let eligibility or if you’re interested in converting your property. We can help you make the process as tax efficient as possible.