Along with the second phase of tax relief reductions, landlords should also be aware of changes concerning HMOs and EPC ratings that are due to come into force this month.
HMO Licensing changes
From April 2018 onwards, many landlords of Houses of Multiple Occupancy (HMOs) will require new licenses. 60,000 HMOs currently require a license, but this figure is due to increase by a further 174,000.
Since 2004, any landlord with a property over three stories or housing 5 or more unrelated occupants has had to apply for a license from their local authority. From April, this will now apply to all HMOs and require a set of minimum standards on room sizes, storage and waste disposal to be met.
Failure to prepare for the changes could find Landlords needing to carry out work on their properties in order to comply. Along with possible fines, those who do not catch up to the new rules in time may also find themselves with rooms they can no longer rent out.
April’s changes could also put more financial pressures on Landlords by creating an income gap. Thankfully, it is likely that there will be a six month grace period to adjust to the new rules.
New standards for EPC ratings
Designed to improve the efficiency of homes in the private rental sector, from April 2018 it will be unlawful to let or lease any commercial or residential property with an Energy Performance Certificate (EPC) rating of F or G.
Although the rules will not apply to all tenancies until April 2020, it will be a requirement of any new let or tenancy renewal. Landlords who do not comply could face fines of up to £5,000.
Many older properties are likely to have solid walls with no cavity for insulation and a lack of double glazing, meaning they will require work in order to meet the new standards. An EPC rating can be improved through insulation, boiler replacements, double glazing and cutting out draughts.