UK Property Law: A Round Up of Changes for Landlords, Tenants and Leaseholders

Some sweeping changes are coming up in 2022 that may affect the property market in the UK in several ways. These changes encompass licensing rules, tax-related changes, renting processes, and other aspects. New landlord rules and announcements are among the changes on the cards for 2022.

Capital Gains Tax

The Chancellor’s Autumn Budget 2021 announced new deadlines for reporting Capital Gains Tax. The new rule states that sellers can now file and pay their bill for Capital Gains within 60 days compared to the 30-day period, which was the norm earlier. The earlier shorter period was seen as challenging to comply with for taxpayers. Sellers have welcomed this change. The new law was effective to all properties sold after 27 October 2021 including non UK residents.

Ending of Six-Month Evictions

When the pandemic struck, the Coronavirus (Scotland) Act 2020 made it mandatory for landlords to give six months’ notice if they wanted to evict their tenants. This rule ended on 31 March 2022. However, there is a buzz that the facility may be extended to September 2022. When the eviction rule ends, tenants will have to comply with the original notice periods - 28 days if less than six months into a tenancy or 84 days after six months.

Right to Rent Checks in England

A change to the Right to Rent Check rules was introduced in March 2020 to help landlords and tenants reduce physical interactions and stay safe during the pandemic. Tenants were allowed to show their original Right to Rent documents over a video call. They then shared a scanned copy or photocopy of the same with the landlords and agents.

These were temporary changes and were set to end in April 2022. But the period has been extended as the government plans to move all Right to Rent checks online. However, the facility is currently available only for non-British citizens. The government will likely extend the temporary changes until the online service is ready for everyone.

Going Digital with Tax Submissions

According to the new rules, all registered businesses with a taxable turnover of less than £85,000 must keep tax records and submit their VAT returns digitally. The rule was rolled out to all businesses in April 2022.

Renting Homes Act 2016 for Wales

The Renting Homes (Wales) Act 2016 aims to increase protection for renters and ease the process of renting a home in Wales. The Act will come into force on 15 July 2022. New occupation contracts will replace the assured short hold contracts. Landlords will also be categorized as community and private landlords.

There will be changes to the process of serving notice as well. Landlords will be required to meet specific obligations to serve a no-fault eviction notice.

The Fire Safety (England) Regulations 2022

The Fire Safety (England) Regulations 2022, crafted under article 24 of the Fire Safety Order, seeks to apply new duties to those areas included within the Fire Safety Order by the Fire Safety Act.

The government has indicated that it will implement most of the proposals made in the Phase One of the Grenfell Tower Inquiry report. The regulations aim to apply practical and cost-effective ways of improving fire safety blocks of flats for individual leaseholders.

The regulations will be applicable from 23 January 2023. The publication of supporting guidance will be completed before that.

The Fire Safety Act (FSA) details the scope of the Fire Safety Order and makes it clear that it applies to the following:

• Structure
• External walls (plus cladding and balconies)
• Doors of individual flat entrances between domestic premises and the common areas

Short-Term Let Licensing Schemes (Scotland)

The Scottish government’s initiative of using local licensing schemes for short-term rental properties comes in response to the complaints of spiraling rents and disruption in popular tourist areas in holiday lets. Local councils will be empowered to create control areas for short-term lets.

Property owners need to get prior permission to run a short-term let. The council will decide based on the density, residential amenities, and housing shortages in the area.

Renters’ Reform Bill: Section 21 and Lifetime Deposits

The new Renters’ Reform Bill is expected to be introduced in spring and has plans to abolish Section 21 of the Housing Act 1988. The bill will strengthen the possession grounds and overall court processes. At present, the Act allows tenants to be evicted in a rolling periodic tenancy or when the fixed-term tenancy ends, and that too without giving a reason.

Building Safety Act 2022

The Building Safety Act 2022 is legislation that will legalize the regulatory changes to building laws and control high-risk buildings. The Act received Royal Assent on 28 April 2022.

The Act will affect all buildings and strengthen the Regulatory Reform (Fire Safety) Order through the changes to building control.

Despite the Royal Assent, there is a long way to go before the Act can be fully implemented.

An operational timetable published by the HSE recommends that from 1 April 2023

• New higher-risk buildings must comply with the gateway approval process during design and construction
• Existing higher-risk buildings must be registered within six months, from April to October 2023.

Property laws keep evolving to meet the changing demands of the market and the players involved. Keep your ear to the ground to remain current with these changes and know about the latest and upcoming regulations in the industry.