4 things Landlords
need to know in 2022
By Chris Norris – Policy Director NRLA
For landlords in 2022, there is a lot that is coming down the line, with many announcements that have not actually come to fruition yet. To help you to know what to look out for in the coming months, here are some of the key changes for landlords in 2022 and specific points that you should be aware of.
Should I be a landlord in March 2022?
Before we begin looking ahead at what will 2022 hold for landlords, it will be useful to have a recap of where we are right now from the perspective of the National Registered Landlords’ Association.
Although over half of all NRLA members are telling us that their businesses have been negatively impacted by the pandemic, broadly speaking, landlords have not been impacted as much as they expected to be. This has been helped by tenant demand remaining high and in fact increasing in all regions of the country.
Currently there is a lack of faith in the U.K. financial market, and a lack of confidence in the financial market tends to spur more confidence in the private rented sector. When markets are less predictable, people gravitate to investments like bricks and mortar because they have more confidence in the stability of property investing.
The knock-on effect has maintained reasonable prospects for capital gains and reasonable prospects for rental yields, because we have almost historic highs in terms of demand. These factors are leading to optimism for landlords and their businesses.
1) The Rental Reform White Paper
The long-awaited Rental Reform White Paper was announced as far back as 2017, and while we were anticipating its release in 2021, it has been delayed until the spring of 2022. However, it is now more likely that it will be pushed into the summer of this year.
We have seen some movement, not least because there has been a change to the position of Secretary of State. This was quite swiftly followed by the publication of the Levelling Up White Paper which talks about some of the items that we have been expecting to see in the Renters’ Reform. Although there is still a commitment to the renters’ reform agenda, the new Secretary of State, Michael Gove, has his own priorities and a different way of working that will influence the program that we will see.
We are likely to see a consultation on some of the proposals about bringing the private rented sector into a form of Decent Home Standard. I am not entirely sure anyone knows what the Secretary of State meant when he announced the Decent Home Standard, but there is a logical expectation to create a set of standards irrespective of the type of tenure.
2) Changes for Landlords in Wales
There is a huge change coming very shortly in Wales that will be, in fact, the biggest legislative change for the private rented sector in Wales since the end of the 1980s. This change will be the implementation of the Renting Homes Wales Act, which became law in 2016, but it will not actually come into force until July 15th 2022.
This will replace all assured shorthold and assured short tenancies in Wales with a completely new kind of tenancy. In fact, they are even dropping the word tenancy, so every tenancy contract that currently exists will be converted into an Occupation Contract. For the majority of tenancies in the private rented sector, they will become what is called a Standard Occupation Contract.
Interestingly, there is a bit of a departure from what’s happened in Scotland and what is happening in England, in so far as the Welsh Government have decided to actually retain no fault possession, however it will not be called Section 21. The difference being it will require a six month notice period and can only be set up after the first six months of an Occupation Contract. Essentially it is giving one year’s worth of security of tenure to tenants, assuming there is not a breach in that tenancy agreement.
3) Right to Rent
There have also been changes made to Right to Rent in England only. It was never introduced in Wales, Scotland or Northern Ireland, but to summarise, this is recognising that the online process for checking peoples’ right to rent in the UK has worked relatively well throughout the pandemic. So well that the Government will rolled out a means to do these digital checks on the 6th April.
The bit that is probably most important for landlords who continue operating through the pandemic is that the COVID regulations stated that if you carried out one of the online checks during the pandemic previously, you would have to go back and retrospectively check again. It is good that the Home Office has recognised the point we have been making for some time, that it is unrealistic to require people to carry out those retrospective checks.
4) The Homes Ukraine Scheme
The Homes Ukraine Scheme is being raised increasingly by NRLA members. As an organisation we want to do everything we can to help people who are being displaced. While the scheme that the government introduced may have had well meaning objectives, it has been a bit of a mess.
We are trying to understand exactly what the status is of individuals who are offered the opportunity to live in a home. There has been a lot of movement towards what are called excluded licenses and excluding occupation contracts. We are getting to a point where the Government is going to move from the immediate response to trying to help people as invited guests, to help to transition them into conventional tenancies.
A lot of the NRLA members are keen to understand more about this so that they can offer untenanted properties to households in need. It is something that we are going to see a lot of development on over the next few months to allow people to move from one status to another without the risk that landlords could be seen as abusing the system, even when they are trying to operate properly.
With many changes in the pipeline there is much anticipation amongst the landlord community. As we have seen, some changes could have significant impacts on how landlords operate their businesses and how they strategise over the coming years. To stay up to date with the changing regulations in 2022, a landlord membership with the NRLA will be a worthwhile investment and Asset Academy members receive a discounted rate.