Property Headlines This Week

Government Moves to Ban Rent in Advance Beyond One Month

Housing Minister Matthew Pennycook has announced plans to prohibit landlords and letting agents from demanding more than one month’s rent in advance. Speaking in Parliament, Pennycook highlighted that such practices are "extortionate" and place undue financial strain on tenants, potentially excluding vulnerable groups from the rental market.

The proposal, which may be added to the Renters’ Rights Bill, aims to align with new periodic tenancy rules replacing assured shorthold tenancies. However, critics argue that rent in advance is a crucial safeguard for landlords, particularly for high-risk tenants or international students lacking a UK financial history.

A recent survey by tenants’ rights group Acorn revealed that 23% of renters were asked to pay six months’ rent upfront, raising questions about how landlords can mitigate risk if the ban is implemented.

What This Means for Landlords: Landlords may need to explore alternatives such as guarantor agreements, rent insurance products, or stricter referencing protocols to balance tenant accessibility with risk management.

NRLA Warns Rental Database Needs Substance

The National Residential Landlords Association (NRLA) has expressed concerns about the upcoming private rented property database outlined in the Renters’ Rights Bill.

The database is intended to reassure tenants, but the NRLA cautions that without detailed, actionable information, it risks becoming a bureaucratic exercise with little practical value.

NRLA’s Recommendations:

• Digital Integration: Include gas and electricity safety certificates alongside Energy Performance Certificates for easy access.
• Compliance Assurance: Landlords should submit signed declarations confirming adherence to new decent home standards.

NRLA CEO Ben Beadle emphasized that tenants need clear, meaningful information to make informed decisions about their next rental home. A well-implemented database could strengthen trust and professionalism across the sector.

Takeaway for Landlords: Preparing properties to meet decent home standards and maintaining up-to-date safety certificates will not only comply with upcoming requirements but also enhance tenant confidence.

Welsh Government Increases Landlord Taxes Amid Housing Shortage

The Welsh Government’s Draft Budget for 2025/26 has introduced a 1% increase in Land Transaction Tax (LTT) across all bands for landlords, raising concerns about its potential impact on the private rented sector (PRS).

New LTT Rates for Landlords:

• ￡0 – ￡180,000: 5%
• ￡180,000 – ￡250,000: 8.5%
• ￡250,000 – ￡400,000: 10%
• ￡400,000 – ￡750,000: 12.5%
• ￡750,000 – ￡1.5m: 15%
• Above ￡1.5m: 17%

Industry leaders, including the NRLA, argue that this move discourages investment in the sector at a time of critical housing shortages.

Expert Commentary: “This policy will narrow tenant choice, increase rents, and worsen the housing crisis in Wales,” said Ben Beadle, NRLA CEO. Meanwhile, Propertymark’s Tim Thomas acknowledged the need for social housing investment but criticized the tax increase for further deterring private sector investment.

What This Means for Investors: Welsh property investors must carefully evaluate acquisition costs under the new LTT structure and consider diversifying investments to mitigate the impact of punitive taxes

Have questions about how these changes affect you? Contact us for tailored advice and property solutions.

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