From improved safety standards to a new debt relief scheme and better protection for your money, here’s what you need to know if you’re renting this year.
Several changes are set to take place in the rental sector during the coming year, while the market continues to evolve in response to the Covid-19 pandemic.
Here’s what you need to know if you’re a tenant or looking to find a rental home:
1. The ban on evictions ends
The ban on evictionsin England for all but the most extreme cases will end on 31 May 2021.
Evictions can still take place before then in cases of:
- anti-social behaviour
- illegal occupation
- fraud or rent arrears of more than six months
- if domestic abuse is happening (in the social sector)
But bailiffs have been told not to carry out evictions if anyone in the property has Covid-19 symptoms or is self-isolating.
Landlords will also have to continue to give tenants additional notice before they can evict them.
They can only start eviction proceedings against you by issuing either a section 21 or section 8 notice.
They do not need to give a reason to evict you under a section 21 notice, but they must provide a warning period.
Landlords can only issue a section 8 notice if there are legal grounds, for example if you are in rent arrears.
A free mediation service has been set up to help tenants and landlords resolve disputes without having to go to court, in a bid to help more people stay in their homes.
In Wales, the eviction ban will remain in place until 30 June.
2. Longer notice periods will continue
Landlords will have to continue to give tenants longer notice periods until at least October if they want to evict them.
An extended notice period of six months, up from the usual two months, was put in place as part of emergency measures introduced during the pandemic.
The need to give a six-month notice period ends on 31 May, but it is being replaced with a new four-month notice period.
Notice periods will then return to normal from 1 October, subject to public health advice and progress with the roadmap out of lockdown.
In more serious cases, less than four months’ notice can be given.
For example, landlords will only have to give you four weeks’ notice from August 1 if you have accumulated rent arrears of more than four months, while they only have to give two to four weeks’ notice if you have made a false statement.
In a case of anti-social behaviour, you could be evicted with no notice at all.
For tenants in Scotland, landlords currently have to give three or six-months’ notice for an eviction, depending on the reason for it, and 28 days in cases of anti-social behaviour or criminal convictions.
In Northern Ireland, landlords must give 12 weeks’ notice - three times the normal notice period of 28 days.
3. Debt respite scheme
The government is launching a new debt respite scheme from 4 May 2021 to give people in England and Wales legal protection from their creditors.
The scheme covers a range of different debts including rent arrears. If you are struggling with debt, it enables you to apply for breathing space or a moratorium – namely a period during which you do not have to make repayments.
There are two types of breathing space you can apply for: a standard breathing space, known as a Breathing Space Moratorium, and a mental health crisis breathing space, known as a Mental Health Crisis Moratorium.
A Breathing Space Moratorium is available to anyone with a problem debt. It gives the debtor legal protection from creditors taking action, including preventing them from taking enforcement action or contacting you. Most interest and charges on the debt will also be frozen.
The moratorium lasts for up to 60 days and any authorised debt advice provider can apply for it on your behalf, as can a local authority if they are providing a debt advice.
A Mental Health Crisis Moratorium is only available to people receiving mental health crisis treatment. It offers the same protections as the above but lasts for the length of the treatment plus 30 days.
While it can only be applied for by a debt advisor or local authority providing debt advice, other people, such as social workers and mental health workers, can approach debt advisors on your behalf to ask them to set one up.
4. Better safety standards
In a bid to improve the safety of rental homes for tenants, landlords now have to demonstrate that electrical installations, such as wiring and electrical sockets, have been tested by a qualified electrician.
Landlords were previously required to have an Electrical Installation Condition Report carried out when a new tenancy was agreed.
But from 1 April 2021, they also need to have one done on all properties with existing tenancies.
These electrical inspections must be repeated at least every five years, and tenants can legally expect to see a copy of the report within 28 days of it being issued.
Meanwhile, if you live in Scotland, landlords have been given an extension in which to install heat alarms in kitchens, smoke alarms in living rooms, halls and landings which must all be interlinked, and carbon monoxide alarms near any carbon-fuelled boilers, fires or heaters.
Landlords were originally given a deadline of 1 February 2021 by which to meet these new safety standards, but that has now been pushed back to February 2022, owing to compliance difficulties created by the Covid-19 pandemic.
Social housing is also set to be reformed to make landlords more accountable and to give tenants a greater voice through the creation of a new tenants’ charter.
The initiative was first announced at the end of last year, and further developments are expected during 2021.
5. Renting with a pet
The government is making it easier for ‘responsible tenants with well-behaved pets’ to rent a home through revising its standard tenancy agreement.
Under the amended model tenancy agreement unveiled by the government on 28 January, consent for pets will be the default position.
This means that landlords who opt for this particular tenancy agreement - the government’s recommended contract for landlords in England - will no longer be able to issue blanket bans on pets.
While landlords are not legally required to accept pets, the government hopes they will do so.
6. Your money is better protected
From 1 April 2021 all letting agents in England have been required to belong to a client money protection scheme.
As a result, any payments you make to a letting agent, such as a deposit or monthly rent, is protected if the agent goes into administration.
Agents must now display a certificate showing which scheme they belong to, as well as including this information on their website.
7. A changing national market
The Covid-19 pandemic has triggered some significant changes to the rental market, as tenants, like homeowners, look for properties with more space.
Larger properties in commuter zones or towns with good transport links are in high demand, pushing up average rents across the UK, excluding London, by 2.3%. Rents in particularly sought-after areas, such as Rochdale and Hastings, have risen by more than 8%.
By contrast, rents in the centre of cities such as Greater London, Edinburgh, Greater Manchester and Birmingham have fallen year-on-year, with the cost of being a tenant in central London dropping by 8.3%.
Overall demand has increased by 21%, with houses letting 30% quicker than 12 months ago, according to our latest Rental Market Report.
As a result, if you’re looking for a larger home in a commuter area, you’re likely to face stiff competition from other renters and will have to move quickly if you see a property you like.
Contrastingly, if you want to rent a home in a city centre you should have a good choice of properties and may even be able to negotiate a lower rent.
8. The Renters’ Reform Bill
The introduction of theRenters’ Reform Bill was delayed last year due to the Covid-19 pandemic, with Housing Minister Christopher Pincher saying it will only be taken forward once the urgency of responding to the pandemic has passed.
With Covid-19 vaccinations now being rolled out, the bill could be back on the table for 2021.
It contains several measures that would help tenants, including ending “no-fault evictions”. Sometimes known as Section 21 notices, no-fault evictions mean your landlord doesn't need to give a reason for wanting the property back. When the notice period ends, they can simply apply to a court for a possession order.
The bill will also see the introduction of a lifetime deposit scheme, enabling tenants to transfer their deposit from one property to another.
9. New ways to get onto the housing ladder
Two new schemes to help first-time buyers get on to the housing ladder have been launched in 2021 to assist tenants who want to make the transition to being homeowners.
The first is the launch of a new version of the Help to Buy equity loan scheme.
The scheme enables people to purchase a new-build home with just a 5% deposit, which the government tops up with a five-year interest-free equity loan that’s equivalent to 20% of the property’s value.
Unlike the previous version of the scheme, this one is only open to first-time buyers. New regional price caps, ranging from £186,100 in the North East to £437,600 in the South East and £600,000 in London, have been introduced.
The government has also launched a 95% mortgage guarantee scheme to help people with small deposits get on to the property ladder or move up it.
The initiative reduces the amount of risk lenders have to take on by enabling them to purchase insurance from the government to cover some of their losses if the property is repossessed.
A number of big names have signed up to the scheme, while it also appears to have led to an increase in 95% loan-to-value mortgage availability in the wider market.
First-time buyers also continue to benefit from the stamp duty waiver for people purchasing their first home.
Property purchases of up to £500,000 are currently stamp duty free for all buyers under the stamp duty holiday.
Once this ends, first-time buyers will still not have to pay the tax on the first £300,000 of their home purchase, as long as the total value of the property is less than £500,000.