ITS COMPETITION TIME!
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The Chancellor has announced in his Spring Statement 2022 that Landlords who will need to upgrade their properties to a C efficiency rating by 2028 will be able to take advantage of zero-rate VAT for the installation of materials improving a property's energy efficiency from April 2022.
Since April 2020 all domestic private rented properties in England and Wales have been required to have a minimum Energy Performance Certificate (EPC) rating of E. Landlords are currently required to spend a maximum of £3,500 on upgrades to achieve an E rating. If an EPC band E rating can't be reached within that limit, then landlords can obtain an exemption.
This is likely to change however, and the government have recently announced that they intend to raise this minimum rating to a C rating. Under these new proposals, the government is also proposing to increase the upgrade spend cap to £10,000.
Landlords need to consider what upgrades may be necessary for their properties to obtain the required ratings and act now to take advantage of the relevant government support, including this VAT cut on the installation of energy efficient materials.
Homeowners installing certain energy saving materials (ESMs) in Great Britain will be eligible for the new zero-rate VAT. These materials include:
- Controls for central heating and hot water systems
- Draught stripping
- Solar panels
- Ground and air source heat pumps
- Micro combined heat and power units
- Wood-fuelled boilers
Wind and water turbines have also been re-added to the list as qualifying technologies.
The government has confirmed that the reduced rate will be in place from April 2022 for a period of 5 years, when it will then revert to the previous 5% VAT rate.
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Over the weekend, the Home Office published additional guidance for people in the UK who may offer accommodation as part of the Homes for Ukraine scheme.
The Government has made it clear that tenants must ask permission from their landlord if they wish to be a sponsor. Additionally, the scheme requires the accommodation to be self-contained or comprise at least a spare room that is unoccupied. It is important that those making accommodation available are confident that it can be provided for a minimum of six months. If the arrangement needs to end early, it will fall to the local authority to find alternative accommodation. The term can be extended if mutually agreed. All applicants meeting the requirements of the scheme will have undergone a visa application process which includes police and antiterrorism security checks. All those offering accommodation as sponsors will also be subject to express, standard security checks and (given the proximity to children and vulnerable adults) a Disclosure and Barring Service check along with a visit from the local authority to check that the accommodation is appropriate.
Neither landlords nor homeowners are permitted to charge rent. The UK Government is offering a ‘thank you’ payment of £350 per month, per residential address and payments are available for up to 12 months. The Association of British Insurers has stipulated that homeowners accommodating applicants to the Homes for Ukraine scheme in their homes will not be required to contact their insurer. However, where the sponsor is a landlord or a tenant, the insurer will need to be notified. Both landlords and homeowners with mortgages on the accommodation should notify their mortgage lender.
Registration is fundamental to the scheme and potentially unlocks additional support from local authorities. Questions around the exact status of occupiers remain, but it is likely that those fulfilling relevant criteria will be subject to a bespoke arrangement of non-paying guests, sitting outside the usual tenancy regimes.
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The Home Office has announced that the existing system which landlords and letting agents use to check the right to rent status of their tenants will be changing. From 6th April 2022 the system will be going digital and tenants will no longer need to prove their right to rent using actual physical documents in person.
The right to rent scheme was introduced to tackle and deter illegal immigration. It is intended to prevent individuals without lawful immigration status in the UK from accessing accommodation in the private rented sector; and to support efforts to tackle those who exploit vulnerable migrants, often housing them in very poor conditions.
Since 2015 landlords and letting agents have been required to establish that prospective tenants can legally rent their property, before entering a tenancy agreement. This involves the physical checking of relevant documents such as passports or biometric residence permits. These would be compared to the tenant in person. Should it be found at a later stage that the tenant was not allowed to rent in the UK then provided the correct checks have been carried out the landlords or agent would be able to establish a statutory defence and avoid a civil penalty.
- The immigration system is digitising and moving away from a system reliant on people proving their rights through physical documents that are sometimes decades old, to a streamlined system that is digital by default.
- Landlords and letting agents will be able to use the right to rent online checking service on GOV.UK to view the immigration status of existing and prospective tenants. The service is simple, secure, free to use and enables checks to be carried out by video call.
- From 6 April 2022, the right to rent online checking service must be used for biometric residence card and permit (BRC/P) holders, as they will no longer be able to use their BRC/P for a manual right to rent check, even if it shows a later expiry date.
- Also from 6 April 2022, landlords will be able to use certified Identification Document Validation Technology (IDVT) service providers to carry out digital checks on behalf of British and Irish Citizens who hold a valid passport (or Irish passport card).
- It is important to note that landlords must not discriminate when conducting these checks. The Government has produced a useful guide for landlords which can be downloaded here Right to rent checks from July 2021: information for landlords - GOV.UK (www.gov.uk)
- There is also a Code of Practice for landlords when carrying out right to rent checks, which can be found here Right to rent immigration checks: landlords' code of practice - GOV.UK (www.gov.uk)
Need any further information?
Contact the team at CB ESTATES and we will be happy to answer any questions that you may have regarding right to rent checks and how they are carried out. At CB ESTATES we carry out right to rent checks on every tenant over 18 as part of our comprehensive referencing and ID checking procedures before we offer any new tenancies. Call Katherine on 01752 917458 for more information
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Last week the Government made its long awaited announcement on what its future plans are for the Private Rented Sector. Contained within its 'Levelling up' White Paper were a number of new measure which will affect landlords. The Government has outlined its intention to abolish the so called 'no fault eviction' process which is currently available to landlords who wish to end the tenancy. They want to give greater security to tenants and prevent landlords from evicting them without any reason. This abolition of section 21 notices is likely to be included in the forthcoming Renters Reform Bill which is expected to be coming out in Spring. A National Landlord Register is also proposed, with the aim of driving out rogue landlords who are renting out sub standard properties. Linked to this is the introduction of a new 'Decent Homes' standard. This will provide a minimum property standard that all rented property will have to meet in order for it to be let out to tenants. The Government are taking a strategic view setting out a 10 year time frame for these measures to have an impact. These measures will undoubtedly have a major impact on landlords and we will be providing regular updates as more information becomes available
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