New lease and property listing rules for landlords
From Property Alerts for fraud prevention, to energy efficiency requirements for rented properties, to Making Tax Digital for Income Tax delays – it’s essential for landlords to keep up with the latest regulatory changes.
For example, the Leasehold and Freehold Reform Bill was introduced in Parliament last November and is likely to be passed into law in mid-2024.
Also in November, the National Trading Standards Estate and Lettings Agency Team (NTSELAT) published two more sections of guidance for sales agents and letting agents regarding ‘material information’ in property listings.
Here’s what these changes could mean for landlords when it comes to advertising a property or extending a lease in 2024.
Extending a lease
Presently, if you have a leasehold property, then you own the property itself, but not the land it’s sitting on – so you have to pay ground rent to the freeholder.
The Reform Bill will do away with this type of homeownership by making every home freehold from the outset. Anyone buying a property will own both the land and the building, and leaseholders will no longer need to own their property for at least 2 years to be able to buy their freehold.
When it comes to extending leases, the current term is 90 years for apartments and flats, but the government intends to increase the standard extension term to 990 years for both flats and houses, with zero ground rent.
Other changes include reducing ground rent to virtually free (peppercorn) upon a premium payment, and removing ‘marriage value’ (which reflects the increased market value of an extended lease).
A leasehold property could have an initial lease term of just 99 years, which may seem fine to a new landlord, but letting a lease run down to less than 80 years could make it costlier to extend and potentially harder to sell or remortgage the property.
Advertising property
After publishing Part A of its guidance on which information to include in property listings in 2022, the NTSELAT published Parts B and C at the end of 2023.
These extended guidelines set out the ‘material information’ that anyone listing a property for rent, lease, or sale will be obligated to include. Providing accurate details about relevant features will allow potential tenants or buyers to make properly informed transactional decisions.
This includes specifics beyond the asking price or rent, deposits, and council tax rates required in Part A. Most landlords and agents may already include the bulk of this mandatory information, but those letting privately might overlook some items.
Part B states that all property listings should include information about the:
- Property type (e.g. semi-detached house or flat)
- Property construction and building materials
- Number of rooms and type of each room
- Utilities (electricity, water, sewerage, heating, broadband, mobile signal)
- Available parking for the property
Under Part C, the following must be included if it’s relevant to the property:
- Accessible facilities/accessibility adaptations
- Building safety information
- Restrictive covenants, rights, or easements
- Planning permissions or developments
- Flood or coastal erosion risks
- Coalfield or mining issues
If known, these details should be provided through the property advertising portals at the earliest opportunity, whether it’s a private let or through an agent.
This will help both tenants and landlords, who can avoid wasting time and money on fall-throughs, because all the necessary information is available from the start.
Listings should follow this new guidance as early as possible, with property portals expected to enforce these rules by the end of 2024.
Financial management for landlords
If you are a landlord, it’s important to make sure you are complying with current regulations, while streamlining your operating costs wherever possible.
From tax planning for property and income tax to managing Service Charge Accounts for residential or commercial buildings, all kinds of landlords can benefit from professional accounting services to help them do just that.
With the team at gbac, you can enjoy improved financial organisation and peace of mind, thanks to landlord services provided by our accountants in Barnsley.
To discover more about what we can do for landlords, call gbac on 01226 298 298, or email an enquiry to info@gbac.co.uk and we will respond as soon as possible.