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What landlords in Wales need to know

Tue 04 May 2021


Last updated: 13 May 2021

Lettings legislation, tax rules and government initiatives are an ever-evolving landscape. So here’s a round-up of the main upcoming changes that may affect you.

Landlord legislation

Latest on evictions
The ban on evictions that had been due to end on 31st of March was extended throughout Great Britain, with it being extended in Wales until 30th June. In most cases, landlords must give tenants six months’ notice to leave, unless the circumstances are serious, e.g. domestic violence or anti-social behaviour.

If you have any queries on evictions, whether we are managing your property or not, do get in touch and we will try to help you.

The Government’s pilot mediation service
The Ministry of Housing, Communities and Local Government (MHCLG) is funding a new mediation service in England and Wales to support tenants and landlords in coming to out-of-court agreements over possession claims, which it’s hoped will help streamline the court process.

If you’ve begun a possession claim, your tenant can access free legal advice from the Housing Possession Court Duty Scheme and if you both then agree, the case will be referred to a mediator.  If an agreement is reached, the court will be informed; if not, the hearing will go ahead.

Let with pets?
The issue of tenants with pets is often the subject of debate and that’s likely to continue throughout the year.

In England, the government’s ‘model tenancy agreement’ has been adjusted, taking out the ability for landlords to issue a blanket ban on tenants with pets. More recently, a new Bill to ban ‘no pet’ clauses in all tenancy agreements passed its first reading in October and is awaiting a date for its second reading.

While these changes only apply to properties in England and it is still currently down to you whether you want to let your property to people with pets, it’s worth being aware that things could also change for landlords in Wales in the future.

Breathing Space regulations

The Debt Respite Scheme (Breathing Space) came into force on 4 May 2021. The Debt Respite Scheme will give someone in problem debt the right to legal protections from their creditors.

There are two types of breathing space: a standard breathing space and a mental health crisis breathing space.  A standard breathing space is available to anyone with problem debt. It gives them legal protections from creditor action for up to 60 days. A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person's mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts).

Find out more on the Government website.

Heads-up for 2022: Simpler rental contracts to be introduced, with greater protection for tenants
From Spring 2022, there is a plan to introduce a new, simplified tenancy agreement, with two key changes. Landlords will have to give a minimum notice period of six months, an increase from the current two months, and they will not be able to serve notice for the first six months of the contract, giving new tenants 12 months’ protection from eviction. This, of course, assumes the tenant is not in breach of their tenancy agreement, in which case you should be able to repossess your property more quickly.

Landlord tax

Land Transaction Tax holiday
Wales has extended its Land Transaction Tax holiday until 30th June, but this doesn’t apply to additional homes.

Freeze on Personal Allowance for 5 years
Usually, the Personal Allowance – the amount of income you can earn tax-free – rises each year. But to help the government recover some of the cost of the pandemic, the Chancellor announced in his Spring Budget that this would be frozen from 6 April 2022 until 5 April 2026. That includes the allowances relating to income tax, inheritance tax and Capital Gains Tax.

Making Tax Digital (MTD)
As part of government plans to modernise the tax system, from 6th April 2023, all landlords and self-employed people will be required to submit quarterly updates of income and expenses to HMRC via MTD-compatible software.

If you have a rental turnover of more than £85,000 and are VAT registered, you may already be using the system. If not, be aware that it will become compulsory for all VAT-eligible companies from April 2022, so it’s advisable to sign up as soon as possible. More information on the GOV.UK website.

If you have any questions about upcoming and likely changes, do contact your local Moginie James branch (Cyncoed, Pontcanna, or Roath) and one of the team will be happy to help.

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