June is fast approaching which means one thing, there are new regulations on the way which could change the way landlords rent out their properties. From 1st June, the Landlord and Tenant Act could see three key changes that could potentially benefit both tenants and landlords.
1. Tenant fees ban
To help support tenants, the Tenant Fees Act will state that tenants are not permitted to pay any tenant fees from Saturday 1st June 2019.
Banned charges will include guarantor forms, credit checks, referencing and admin checks on tenants. However, landlords will still be able to charge for lost or damaged property and late rental payments.
Once the bill comes into effect, landlords will be required to pick up these costs that tenants might be paying now. Although this is great news for tenants, landlords are understandably worried that they will lose money and might have to put up their rent to account for these checks.
2. Tenant deposit cap
The second proposal that the government are planning to introduce in summer 2019 includes a cap on tenant deposits. Currently, landlords can charge as much deposit on their property as they like, but typically many landlords will ask for the equivalent of 1 months rent. However, the new cap will mean deposits depend on the annual rent of the property.
Landlords charging less than £50,000 a year in rent will be subject to a deposit cap of five weeks rent. Anything over £50,000 and the deposit is capped at the equivalent of six weeks rent.
3. Three-year tenancies introduced
Three year tenancies could be introduced this year to further benefit those renting a property, although the government are yet to confirm this after fears it could scare off investors.
If a three year tenancy term is introduced, as it has been in Scotland for some time now, tenants might be able to find more permanent housing.
At a first glance, landlords might see this as a positive due to the reduced hassle of finding new tenants ever year. However, landlords could have “less flexibility in financing their properties” as a result of this new regulation, should it go ahead in summer 2019, and it might come with a six-month break clause.
Other amendments proposed
Alongside these three key amendments, the Tenant Fees Act could also change the following:
- Homeshare schemes and local authorities could be excluded from the bill. This is because these schemes act on behalf of the tenant or guaranteeing their rent.
- Local authorities will soon be able to retain money raised from penalties. This money will then be used on future housing enforcement in the local area.
What to do if you’re a landlord worried about these regulations
If you’re a landlord that is concerned about these new regulations, you should seek the advice of a specialist residential property solicitor, such as Abacus Solicitors in Manchester.
Seeking the advice of an experienced solicitor could help you to discover the best ways to tackle these new regulations, and how they could potentially benefit both you and your tenants.