As we enter the new decade, more UK property letting compliance changes are predicted to come into force.

UK Market and legislation trends to look for in 2020


As we enter the new decade, more UK property letting compliance changes are predicted to come into force.

This won’t come as a big surprise to most landlords as UK compliance laws are constantly being updated and amended.

Indeed, one of the most complicated aspects of owning a property portfolio of residences to let is undoubtedly the ongoing modifications involved to existing legislation, and subsequently trying to stay up to date with them.

Landlords who can familiarise themselves early on with the probable changes as well as predicting any possible changes are the ones best suited to adapt and thrive when the amendments come into place.

That’s why at Stirling Ackroyd, we’re providing you with a summary of what happened in 2019, and what’s likely to be introduced in 2020.

What happened in 2019?

Last year was a fairly disorienting time to be a landlord as we saw multiple new regulations brought into place ranging from a ban on tenant fees, the client money protection scheme, to new standards on space and electricity.

To begin with, the aforementioned Tenants Fees Act 2019 which came into effect on 1st June last year, protects tenants from the number of additional fees that they’ve always been obliged to pay.

Now, when a rental property is advertised at a certain price, no other hidden costs can subsequently be added, thus empowering the tenant to budget themselves better, avoiding unseen and unplanned expenses.

As a result of this law, deposits are now capped at five weeks’ rent (or six for tenancies that cost more than £50,000 a year) and landlords are banned from charging fees for anything other than modifications to the contract, council and utilities tax, and discrepancies where the tenant is proven to be culpable.

Interestingly, since this law was passed, we’ve seen an impact for both landlords and agents. Carrying out inventories, tenant referencing, or credit checks all take time and involve people working on specific systems, and the cost therefore isn’t cheap.

In order to cover these costs, although there are fewer upfront fees for the tenant to pay, it’s likely that rents will be raised in 2020 just to counterbalance the losses incurred.

We also saw the Homes (Fitness for Human Habitation) Act passed on 20th March 2019.

Landlords must now ensure that the rental property is completely safe and suitable to inhabit. Being safe and suitable includes improving the levels of security and cleanliness within the residence and although there are warnings that the legislation may encourage some tenants to start bogus legal action just to win compensation, landlords now have the legal obligation to improve their property conditions.

Lastly, in October 2019, new requirements for the minimum size of bedrooms came into force. These regulations depended on how many people were occupying any given bedroom.

Now, if the rules are broken, landlords have a maximum of 18 months to comply, with those who fail to rectify the issue liable to be fined up to £30,000.

Stirling Ackroyd understands that for landlords, compliance is one of the toughest aspects of property management. Not only does it regularly change, but landlords have the additional worry of being fined large amounts if they don’t comply, even if they are genuinely unaware of a particular rule.

We employ a specific compliance team who can assist landlords in the day to day of property management, simply by doing all the compliance for you.

Leaving it in our hands is the sure-fire way to reducing the hassle involved in keeping up with the law.

What can landlords expect in 2020?

As we get further into January and February ebbs ever closer, it’s probable that landlords will face another series of compliance complications and updates, from ongoing debates to establish new ‘right to rent’ processes, to strict new regulations on energy efficiency.

A rise in costs for tenants and landlords alike

Firstly, a lack of properties available for rent, coupled with a growing tenant pool has led to notable rental price increases across the whole of Britain. According to the Royal Institute of Chartered Surveyors, as the sector continues to struggle with a shortage of supply, data suggests that rents will rise by nearly 3% in London this year alone.

Although there is a governmental push to control rental increases, 2020 is expected to bring increased costs in the running of properties being let. This is intrinsically linked to the Tenants Fees Act which came into effect last year, as landlords have had to raise their rental prices to cover the costs of scrapping the additional fees they were charging before.

The 5th anti-money laundering directive

On 19th April 2018, the European Parliament adopted the 5th Anti‑Money Laundering Directive. The amendments are a result of the European Commission’s 2016 Action Plan to tackle the use of the financial system for the funding of criminal activities, terrorist financing and the large‑scale obfuscation of funds. This legislation came in to force on 10th January 2020.

In order to comply with the 5th Anti Money Laundering Directive, Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007, Easte Agents are now required to verify your ownership of the property at the point of instruction and check proof of identity and one proof of residence once an offer is agreed.

At Stirling Ackroyd, we use multi-award-winning organisation, Credas which enables us to authenticate documents in real-time with all data securely stored in the European Union.

Minimum energy efficiency standards (MEES)

The majority of landlords are now used to the minimum energy efficiency standards (MEES) law that came into effect in April 2018.  

This regulation change required that new tenancy agreements and renewals (other than some HMOs) had to have an energy performance certificate (EPC) rating of E or above.

Nevertheless, by April 1st 2020, the regulations will be extended to include existing tenancies. Under new legislation, this means that properties with an EPC rating of F or G will be classed as unsuitable for rent.

Landlords with properties that don’t meet these new regulations will have to carry out energy efficiency measures on their homes, up to a cap of £3,500 a property.

However, even if your properties do comply, landlords can’t afford to become complacent. There are already murmurings that these standards could rise again in another couple of years, at which point ‘D’ will be the minimum EPC rating. Because of this, it’s worth getting the properties in your portfolio up to standard now to prevent even more work later.

Electrical installation checks

Last January, the Ministry of Housing, Communities and Local Government (MHCLG) announced that mandatory five-year electrical installation checks on private rented housing in England would be introduced over a transitional period of two years.

The first year would see all new private tenancies subject to the checks, while the second year would encompass all existing tenancies too.

However, the implementation date has not yet been clarified, so while it is still unconfirmed as to exactly when this will begin, there is a good chance that the legislation could be introduced at some point in 2020.

Amendments to stamp duty

Stamp duty has long been a topic of some contention for landlords. This is because in 2016, the government introduced a 3% buy-to-let stamp duty surcharge for property investors.

Now, it’s possible that a new stamp duty surcharge could be brought in for foreign buyers investing in UK property. Whatever happens, 2020 will be an interesting year regarding stamp duty and landlords should keep an eye open for any changes.

Right to rent checks

The Right to Rent initiative brought in by the government has provoked much debate since being launched in 2016, and in all probability, that won’t change too much in 2020 either.

In short, these checks require that landlords check whether tenants have the right to live in the UK, and there are severe sanctions and penalties if the landlord foregoes this obligation.

However, in March 2019, the High Court ruled that the policy was incompatible with human rights laws and the chances are that this year will see a significant change to the checks that landlords should carry out.

Stay fully compliant with Stirling Ackroyd

As we’ve established, 2020 is set to be an eventful year for landlords managing their property portfolio.

What’s more, staying compliant and adhering to UK law can be complicated and confusing as there’s probably enough on your plate already without keeping up to date with the small print of legislation amendments constantly being enforced.

Because of this, we recommend that the best action you could take for 2020 is to contact us at Stirling Ackroyd so that we can assist you in managing your property, removing the responsibility of compliance from your shoulders. We employ a fully qualified team of compliance experts who are trustworthy and reliable when it comes to taking care of your property.

We’ve been helping to buy, sell and let homes all over Central and East London for over 30 years and our track-record puts us well ahead of our competitors.

Contact us today to find out more about our Fully Managed and Fully Managed Plus property management services which are unrivalled anywhere.

We also offer a free property valuation service, providing you with the all the right information to market your property. We’ll get to know the residences in your portfolio as though they were our own. This enables us to market your rental homes to their maximum potential, gaining you more rental income.

We look forward to hearing from you today so we can ensure your well-being and that of your tenants. It’s our specialty . Book your valuation today to find out more.

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