Market update – four key dates letting agents need to watch out for
As spring gets underway and lockdown rules start to loosen, our Senior Sales Executive, Lucy Mitchell, thought it was a great time to share her market update, covering some key events that you may need to consider during the coming weeks and the rest of the year.
Here at Rentshield, we pride ourselves in our market knowledge and always strive to go over and above to ensure we can continually support our customers in these unprecedented times.
The role of a letting agent has never been more crucial. The invaluable service provided by agents can help landlords remain compliant, protect their investments and oversee long-term, harmonious tenancies. Despite the pandemic challenges, the rental market has performed strongly with high activity levels and strong rental price growth in many parts of the country.
As ever, there are lots of changes for letting agents and landlords stay abreast of this year. As we approach Q2 2021, I’ve outlined some key dates in the diary to prepare for…
April 2021: Mandatory CMP – the final deadline?
After a few extensions, it appears April 2021 will mark a hard deadline for agents to join a Client Money Protection (CMP) scheme as a mandatory requirement.
The deadline for mandatory CMP membership was originally intended to be in April 2018, but it was delayed until 2019.
It was extended to April 2020 after agents had issues setting up pooled client accounts with banks. As these problems persisted last year, the deadline was once again pushed back until this April.
A subsequent breakthrough, pushed for by Propertymark, has made it easier for agents to open pooled client accounts, so it appears the upcoming deadline may be the last.
Although most agents are already members of a CMP scheme, recent Trading Standards investigations have shown that some agents are yet to comply.
Agencies which aren’t a member of a CMP scheme can be hit with a hefty fine and remember, you must display a certificate of membership on your website and in your office.
May 2021: The Debt Respite Scheme (Breathing Space)
From May, agents and landlords will need to consider the government’s Debt Respite Scheme, also known as Breathing Space.
The new measures will provide those in problem debt, such as rent arrears, with additional protection from being chased by creditors (agents and landlords).
A standard breathing space will provide individuals with problem debt with protection from creditor action for up to 60 days. A mental health crisis breathing space lasts as long as someone receives recognised mental health treatment, plus an additional 30 days.
With these new measures making it harder for agents and landlords to recoup arrears, having the necessary measures such as rent guarantee and insurance in place all the more important.
Rent arrears have become more of an issue due to the pandemic and could worsen once more later in the year when the furlough scheme finally comes to an end and more jobs are put at risk.
June 2021: Right to Rent changes?
Following the end of the Brexit transition period on December 31 2020, many agents and landlords will have been wondering how the UK’s final departure from the EU and the introduction of a points-based immigration scheme could affect the Right to Rent scheme.
The government’s message is that the process and lists of acceptable identification for Right to Rent checks remain unchanged until June 30 2021.
This means EU, EEA and Swiss nationals can continue to prove they have the right to rent in the UK by showing a passport or national identity card.
It has been reported that the government will publish new guidance on how agents and landlords can perform Right to Rent checks on EU, EEA and Swiss nationals.
At this point, there has been no indication of when in June the guidance could be published or what the new rules could entail.
However, agents must monitor the news and official sources for updates to ensure their own compliance and communicate any changes to their landlords in good time, this is a great way to showcase your expertise to your landlords.
September 2021: The end of the furlough scheme
As part of the recent Budget, the furlough scheme was extended once more until the end of September.
The extension will help provide stability for the jobs market and, subsequently, tenants’ ability to pay rent over the spring and summer months. However, when the government support does finally come to an end, thousands of jobs could be at risk.
The Office for Budget responsibility has said that it may take until 2022 for the unemployment rate to return to normal levels. It added that in the worst-case scenario, four million people could be out of work this year, with the unemployment rate remaining above pre-crisis levels until 2024.
Much like Breathing Space, the end of the furlough scheme could put extra pressure on agents and landlords who are having to deal with rent arrears.
As arrears pile up, landlords could find it harder to pay their buy-to-let mortgages while letting agents’ management fees will also be at risk. Therefore, agents must have the measures to deal with rent arrears, such as comprehensive record-keeping, strong communication, and the ability to organise affordable repayment plans.
On top of this, providing landlords with a rent guarantee and insurance to cover costs, including eviction, can limit the impact of increased redundancies and rent arrears.
Thank you for taking the time to read my update, I hope you’ve found it useful. If you need anything from me or the team please don’t hesitate to drop us a call – we’re always happy to help.
Lucy has been with us for five years and has a wealth of experience in the private rental sector. With her knowledge and passion for exceptional service, the team are providing high-quality tenant referencing, whilst driving growth for our customers through a range of revenue-driving services.