8 Things BTL Landlords Need To Know In 2021
Given the uncertainty around the ongoing pandemic, no one can truly predict the state of the property market in the year ahead. However, here are the changes Landlords can expect in 2021…
- Evictions will resume
Currently, tenants being evicted under section 21 and section 8 notices must be given six months’ notice, except for in cases of anti-social behaviour or rent arrears.
This policy will come to an end in March 2021, although landlords will still need a court order to evict their tenants. The rules vary for England, Wales, Scotland and Northern Ireland.
- Renters Reform Bill
In 2019, the government consulted on abolishing Section 21 – which allows landlords to end ‘rolling’ tenancies with two months’ notice without giving a reason. Section 21 still remains in place, with the Renters’ Reform Bill delayed due to COVID-19.
The bill includes replacing security deposits with a ‘lifetime deposit’ that moves with the tenant and making the rogue landlord database public.
- New Safety Requirements
Landlords already need to have an Electrical Installation Condition Report for new tenancies.
By April 1st 2021, they will also need to have one for existing tenancies, inspections will need to be carried out at least every five years and the tenants given a copy of the report within 28 days of it being issued.
Landlords with properties in Scotland must also install heat alarms in kitchens, smoke alarms in living rooms, halls and landings and carbon monoxide alarms near any carbon-fuelled boilers, fires or heaters.
- Tax Changes
The 2020/21 tax year, Mortgage Interest Tax Relief was completely phased out and replaced with a 20% tax credit for mortgage interest, which was less generous than the previous system for higher rate taxpayers.
Landlords filing their 2019-20 tax return in January, will be able to deduct 25% of the mortgage interest and get a 20% credit on the remaining 75%.
But with the next tax return (January 2022 for the 2020-21 tax year), Landlords will instead just get the 20% credit on all mortgage interest.
- Brexit Right to Rent Rules
Landlords currently have to verify the immigration status of all tenants to ensure they can legally rent a property. From 1 January 2021, the UK will introduce a new points-based system for immigration.
The government has delayed changes to the Right to Rent process until the spring because of the Covid-19 pandemic. As a result, it is still not clear what checks landlords will have to carry out under the new system.
- Tenants Allowed Pets
Landlords could lose their right to have a ‘no pets clause’ in their rental agreements in 2021, as part of the Dogs and Domestic Animals Bill.
The bill, which is due to have its second reading on 5 February 2021, gives people the right to keep dogs and other animals in rented accommodation as long as they are a responsible owner.
- Stamp Duty Surcharge for Overseas Investors
From 1 April, overseas buyers will need to pay a 2% stamp duty surcharge when they purchase properties in England and Northern Ireland. This is on top of the regular buy-to-let surcharge. The rules apply to all non-UK residents. To be classified as a UK resident, you’ll need to have spent at least 183 days (six months) in the UK in the year before or the year after you buy the property.