Amid Government moves to restrict homes becoming holiday lets in tourist hotspots, some landlords are now returning to the residential market.
Ministers are concerned that the staycation boom has led to local residents being priced out of rentals in popular areas. New planning permissions and a register of short-term lets are among the measures before Parliament.
However, the Government is also introducing a “once-in-a-generation overhaul” of the laws on residential lettings, with a raft of measures in its Renters (Reform) Bill.
So, landlords have been left with a complicated new landscape to navigate and it is understandable that some are feeling baffled by all the rules on property rentals.
Professional letting agents can take the stress out of property management and help landlords maximise the return on their investment.
Our friendly team at Caxtons can guide you through the increasingly complex web of rules and ensure you comply with the law and do not risk hefty fines.
In this article we take a look at the reforms which are reshaping the property rental market and address why some holiday let landlords are considering a return to the residential property market.
New rules on holiday lets
Large numbers of property owners took advantage of the boom in staycations in the wake of the pandemic. There were obvious attractions to earning high rents from just a few days’ let.
But the growth of holiday homes in tourist hotspots has sometimes come at the expense of local people who have been unable to find affordable housing.
So now the Government has unveiled proposals to take the heat out of the holiday lettings market. In April this year, the Department for Levelling Up, Housing and Communities published moves to require planning permission for homes in popular tourist areas to be used as short term lets.
There would be a maximum number of nights per year that property owners could let out their home without the need for planning permission.
In a separate consultation by the Department for Culture, Media and Sport, there are proposals for a new register of short-term lets. This would enable the Government to map out existing holiday rentals and weigh up the effect on local communities.
The new register, which would apply to England only, would be added to the Levelling Up and Regeneration Bill currently going through Parliament.
All that glitters…
The allure of the short-term lettings market must be balanced against the fact that it is usually confined to the holiday season.
While work-from-home has created digital nomads who may be happy to rent out of season, there is always a risk of your holiday rental remaining empty in the cooler months.
Dealing with a stream of holiday makers arriving and leaving every few days with all the cleaning, laundry, inventories, wear and tear, sorting out keys and dealing with enquiries can also be exhausting.
In contrast, long term tenancies usually last for a minimum of six months. While residential tenants do not pay as much per week as holiday makers, the income is consistent and managing the tenancy is less time consuming and expensive.
Indeed, the private rental market is the hottest it has ever been. The hike in both the cost of buying a home and in mortgage rates means many people have put their dream of buying a property on hold. So, competition for rented homes is high and rents are rising.
Sweeping private rented sector reforms
Amid this unprecedented demand for rented homes, ministers have announced a major shift in the balance of power between landlords and tenants.
The Government says that under its new Renters (Reform) Bill, 11 million tenants in England will benefit from “safer, fairer and higher quality homes”.
All part of the Government’s “levelling up agenda”; there will be a ban on section 21 “no-fault” evictions, which will “empower renters to challenge poor landlords without fear of losing their home”.
The Bill will also apply the Decent Homes Standard to the private rented sector for the first time. Legal safeguards will ensure landlords keep homes free from serious health and safety hazards and in a good state of repair.
- Blanket bans on renting to families with children or those on benefits are to be ended.
- It will also be easier for tenants to keep pets.
- Landlords will also benefit from new protections. It will become easier to recover property to sell, allow a family member to move in or when tenants “wilfully” do not pay rent.
- Notice periods will be reduced “where tenants have been irresponsible, for example breaching their tenancy agreement or causing damage to property”. Plus, there will be stronger powers to evict “anti-social tenants”.
In the longer term, the Government has already announced requirements for landlords to comply with tougher energy efficiency standards, backed up by large fines. By 2028, all rental properties will need to have an Energy Performance Certificate rating of C or better. The penalty for not complying will be raised to £30,000.
Benefits of using letting agents
If you are confused by the raft of legislative changes on the horizon, Caxtons can take the headache out of residential rentals. Our team of knowledgeable professionals can help you comply with the complex and ever-changing regulatory burden.
This includes a large number of safety checks and being aware of the small print such as making sure you do not break the terms of your mortgage by letting out your property.
Caxtons can match you with suitable long-term tenants, arrange your rental agreement, acquire references and collect the deposit.
Many landlords, especially those who live at a distance or overseas, also prefer the convenience of leaving the on-going management of their rentals to our agents. This includes sorting out maintenance and repairs.
So, for expert advice, please get in touch with Debbie Pennell, Associate Director, Residential Management and Lettings at Caxtons on 01634 576000, or drop her an email on [email protected]