What a year 2021 has been already! Here’s a brief overview of what we think is yet to come for Swansea landlords.
Further Property Restrictions
At the time of writing, the housing market is open even if our offices are closed. We are able to do house moves for tenants, but viewings should be kept to a minimum. Although it is under speculation that the Government is planning on closing the housing market to viewings, pressure is building from medical advisors.
This means if the do close us completely, no in-person viewings, valuations or meetings in the office by appointment will be allowed. It will also mean no house moves can go ahead until the restrictions are lifted. Only essential home moves would be allowed.
Evictions Ban Extension
The ban on evictions has been extended to 21st February. It is not guaranteed that a further extension will not happen. Landlords should ensure they are keeping clear and open communication with tenants to minimise the risk of rent arrears. Rent Guarantee and Legal expenses products have never been more important for landlords than now.
With the notice period for serving notice on a tenant is now 6 months, (even if they are not paying rent), the time it takes a landlord to get a property back is looking like exceeding 18 months.
Welsh Land Transaction Tax (LTT)
In yet another ‘shock’ announcement on the 21st December (when we were all still getting over the previous days’ lockdown news) the Welsh Government increased the Land Transaction Tax (the Welsh equivalent to the English Stamp Duty Land Tax – tax on the purchase of property), on second homes from 3% to 4%. The new tax took effect at midnight on the day it was announced and has caused widespread chaos across the country, just before the Christmas break. To find out what your new tax liability will be on future BTL investments, check out the LTT calculator here .
Renting Homes Act (2016)
Will this new law ever come in?!! The Welsh Government are hoping to pass it before the next elections in May. They have said they will give at least 6 months notice of the change, (so it is looking unlikely!). The Renting Homes Act replaces all previous Acts, such as the the Housing Act 1988 (not limited to this act!)
It means for Landlords another huge change in the way we operate, from our AST agreements turning automatically into ‘Standard Contracts’. Also, there will be a legal requirement under the HHSRS for properties to be maintained to a specific standard of condition and for Electrical safety certificates to be mandatory, amongst other important changes.
Rent Smart Wales & Licence Renewals
Last year we celebrated 5 years of Rent Smart Wales. That means this year is when landlord licences and registrations will be under review. Landlords in Wales will be required for them to be renewed in order to carry on self managing a rental property.
Agents will also be having their audits in order to apply for their renewal – if an agent or landlord does not hold an active licence with Rent Smart Wales, it is an illegal offence.
Consequences can include fixed penalty fines, rent repayment orders, rent stopping orders and being banned as trading as a landlord. Landlords should be regularly checking their account online with Rent Smart Wales in advance of the renewal to make sure all the details are still correct. NB – it is part of a landlords’ licence conditions to notify them of ANY changes within 28 days!
Rent Rises at 4% in Wales
Lockdowns are responsible for more people wanting to move out of cities and closer to the sea. In many instances people are relocating from more expensive areas, so affordability is greater here in Swansea. There is also a rise in demand for homes with gardens and a serious undersupply of rental property.
Homes that are in demand areas are in short supply and this unbalance is showing with the rise in rents. Homelet reports rents have increased across Wales by up to 4% in 2020 with the average rent now £679.00pcm. This may be good news for some Landlords, but with Tax increases, agent fees increasing and general there’s a lot more to be dealing with as a Landlord these days, the rises aren’t enough to keep some in the market. Even with the rents rising Landlords have been consolidating portfolios instead of increasing them, which is in turn encouraging rents to rise as supply is reduced.
Brexit, COVID-19, and European Tenants
The amount of European tenants is likely to drop due to Brexit coupled with COVID-19 travel restrictions. The requirements for tenants to travel work and rent in the UK will no doubt change as a result of Brexit. Homeworking becoming more ‘normal’ will also see businesses think about the necessity of relocating staff.
Brexit on its own probably wont hurt the overall rental market as housing prices hit record highs, first time home ownership a challenge for most. Job uncertainty may also fuel demand for rental accomodation as renters decide to keep their options open, along with having the flexibility of moving areas/property types at short notice if they need to.
Swansea to Lead Jobs Recovery in Wales
And finally, job numbers in Swansea are set to rebound by just over 8% this year, according to new research. The positive uptick in the city’s employment prospects is due to public sector jobs in education, health and administration being among those least affected by the coronavirus crisis.
The sector is set to remain the biggest source of employment in the city and the employment opportunities that continue to be created are projected to benefit Swansea in the year ahead. As we know, where there is employment, housing demands go up which can only be a positive thing for our city.
If you’re interested in the future of lettings and want to discuss your property plans for 2021, I’m offering a limited amount of free 15 minute consultations for the rest of January, so book directly into my diary here and let’s have a chat!