Landlords who know what to look out for during the first half of 2022 will be most able to appropriately react to the changes and challenges that are on the way.
With the potential introduction of the White Paper on rental reform, potentially rising mortgage costs, and additional changes that will be discussed in this article, preparation and planning have never been more necessary.
Although change often sparks concern, staying in the know is one beneficial way that UK landlords can stay ahead and in control.
As Covid-19 has taught us, the future is uncertain, yet putting the right preventative measures in place can make change easier to adapt to.
Here at Propcert, we break down exactly what landlords need to look out for.
Upcoming trends in the rental market
Throughout 2021, trends in the rental market were largely determined by the Covid-19 pandemic.
For example, national lockdowns deterred international students from renting abroad and demand for larger rental homes soared.
Since the emergence of the Omicron variant, many have speculated that more lockdowns will occur throughout 2022, meaning these market trends could continue.
Government guidelines also largely influence the trends in the rental market. The White Paper on reforms to the private rented sector is set to be published this year. The proposals are set to include the introduction of lifetime deposits and the removal of Section 21 notices. If this notice is eliminated, evicting tenants is likely to become more challenging for UK landlords.
However, there is no fixed date for the White Paper on rental reform, which will in turn inform the final version of the Renters’ Reform Bill. It seems unlikely the Bill’s journey will be entirely smooth through Parliament, which could mean widespread rental reform is delayed until 2023. But it’s something for landlords to certainly be aware of in the background.
Demand for energy efficient homes and EPC rules
For tenants and landlords, one of the most rewarding benefits of an energy-efficient home with a high energy performance certificate (EPC) rating is the low cost of household bills, which naturally makes a rental home more attractive.
Furthermore, statistics show that homes account for 22% of the UK’s carbon emissions, but increasing an EPC rating can help to lower this.
Currently, the minimum grade declared as a pass is an ‘E’, however, sources claim that the government is planning to change the Minimum Energy Performance of Buildings Bill to raise the minimum grade to a ‘C’.
Although these changes will not commence until 2025, landlords should not underestimate the time and money required to get homes up to a ‘C’ rating.
With tenants becoming more aware of the benefits associated with environmentally-friendly homes and the government prioritising this, it is no surprise that green mortgages are on the rise.
In a recent survey conducted by Leeds Building Society, 93% of brokers forecast a rise in client demand for green mortgages.
Mortgage costs likely to rise
In the upcoming months, landlords’ mortgage repayments are likely to rise due to the recent Bank of England base rate increase. The majority of landlords have interest-only mortgages.
In addition to this, My Local Mortgage predicts that higher rental costs are expected to continue into 2022 due to the lack of available rental properties.
Ensuring that the property has a high EPC rating and checking that appliances are well-maintained will not only keep tenants out of danger, but will save money in the long term and make inflation and mortgage repayment increases easier to adjust to.
Carbon monoxide alarm changes
New rules for smoke and carbon monoxide alarms mean that landlords are legally required to replace or repair alarms if they have a fault.
These devices are critical to ensuring the safety of tenants as they detect a poisonous gas that can otherwise kill or cause long-term health complications.
At Propcert we have a range of registered gas safe engineers who can complete gas safety certificates and other gas services.
Landlords who stay informed about these upcoming changes will be able to plan accordingly and alter the way they run their business in good time.
Propcert is dedicated to helping the private and public sector remain compliant, informed, and safe. If you are interested in learning about any of the services we provide, you can discover more about us here.
