Changes Coming to the Private Rental Sector in Spring 2022
There are some massive changes coming to the private rental sector on April 1, 2022.
In our latest blog, we’re mapping out the three key changes to the lettings industry - energy price cap increase, Levelling Up White Paper, and the two changes to right to rent checks.
If you’re a landlord and unfamiliar with some of the changes we’ve just mentioned, keep reading to ensure you’re up-to-date on everything.
Energy Price Cap Increase
One of the biggest changes for all households, not just those letting properties, is the energy price cap increase. On 1 April 2022, the energy price cap will rise by a whopping 54%. This increase is going to affect 75% of British households by increasing the average household annual energy bill by £693, totally nearly £1,971 in the coming weeks.
And in just October 2021, energy price cap increased by 12%.
This latest increase is estimated to push many households over the fuel-poverty threshold with 10% of the poorest families seeing 6% of their income going to energy bills. Households on prepayment metres will see a larger increase of £1,309 to £2,017 per year, a £708 yearly increase in energy costs.
However, the government revealed plans to support households with this hefty change. Some households can receive up to £350 to reduce the rising cost of living along with £200 off energy bills of domestic electricity customers starting from October. For 80% of households, the government has also enacted a £150 Council Tax rebate starting in April 2022. And in October of 2022, they will offer a£200 upfront discount off bills. However, this discount will have to be repaid by customers through energy bills over the following five years.
If you have any questions or concerns about how the increase to the energy price cap might affect you or your tenants, please do not hesitate to get in touch.
Right to Rent Announcements
In February the government made two announcements about the right to rent. Firstly, how you check the right to rent and secondly, the temporary extension to adjusted the right to rent checks.
Right to Rent Checks with IDSPs
Starting on 6 April 2022, lettings legislation will allow letting agents and landlords to use certified Identity Service Providers (IDSPs) to digitally check the identity and eligibility of British and Irish citizens to rent a property in England.
IDSPs can verify people remotely and prove eligibility over right to rent (and work), which will reduce time, cost, and energy both in the lettings process and the recruitment process.
This means, as a landlord, you won’t need to spend as much time on the right to rent checks, because you won’t need to examine documents if they use an IDSP. However, you’re still responsible to ensure the check to places and will need to ensure you’re using a certified provider.
It’s also worth mentioning that all biometric card holders will be required to use the Home Office online service to provide their right to rent. This also starts on the 6th of April.
If you are not sure how to access a certified provider for IDSPs, let us know, and we’ll be happy to support you.
Temporary Extension Adjusted Right to Rent Checks
The second change to the right to rent checks is that the government deferred the end date for the temporary adjusted right to rent checks. It will now end 20 September 2022.
If you’re unfamiliar with the adjusted right to rent checks, this was implemented at the beginning of the pandemic so that letting agents and landlords didn’t have to perform the right to rent checks in person. Right to rent checks could be over video calls or sending documents via email or WhatsApp rather than demonstrating the documents in person.
If you’re unsure about how to perform right to rent checks via email or whatsapp, we’ll gladly assist you to ensure you’re above board.
Renters' reforms announced in Levelling Up White Paper
The government released their Levelling Up White Paper. And it confirmed that a large number of reforms for the private rented sector in England are on the horizon, with further detail to be announced this spring.
The Levelling Up White Paper mapped out several proposals that are under consideration.
Most importantly are
- the abolishment of Section 21,
- a new minimum standards for rental homes, including ways to address homes with poor energy efficiency,
- the introduction of a national landlord register,
- and providing tenants with a ‘strong right to redress’.
To make these reforms a reality, the government has said that it will consult on the impact of the private rented market, particularly for those on the lowest incomes.
We will keep you updated as more information on the proposals comes to light.
