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Landlords - 10 things you need to know in 2021

February 18, 2021Categories: Landlords
Lasy looking at an ipad whilst sat on the sofa

With every new year, there are new changes in the world of lettings. So here’s what you need to know and look out for in 2021.

Dates for the diary

1. 31st March: Stamp Duty holiday ending

Since this was originally written, the stamp duty holiday has been extended to 30 June 2021 see latest information in our blog

To help support the UK housing market through the pandemic, there has been a temporary easing of the tax paid when you buy a property:

(Note: the LTT surcharge for second homes was raised from 3% to 4% across all price bands, as of 22nd December 2020.)

These temporary measures are due to come to an end on 31st March. So, if you’re currently buying a property and want to benefit from this tax ‘holiday’, the purchase must complete before 1st April.

2. 31st March: Mortgage payment holidays due to end

If you’ve got a mortgage, you’ve been able to apply for payment deferrals for up to six months in total during the pandemic. This was due to come to an end on 31st March, however, even after this time you may be able to extend existing deferrals until 31st July 2021, but you need to contact your lender.

3. 1st April: Stamp Duty surcharge for overseas investors

All non-UK resident investors will have to pay an extra 2% in Stamp Duty on residential property purchases in England and Northern Ireland landlord from 1st April. This is on top of the 3% buy-to-let surcharge.

4. 1st April: Mandatory 5 year electrical checks

By 1st April, all properties with existing tenancies must have had a full electrical inspection and test within the last five years. The electrics must then be re-checked every five years - sooner if specified on the report. A copy of the current report must be given to new tenants before they move in and to existing tenants within 28 days of the inspection.

5. 2020-21 tax return: mortgage interest no longer an ‘allowable expense’

The phasing out of mortgage interest and other finance costs being an ‘allowable expense’ ended on 5th April last year. So, for your tax return for the year to 5th April 2021, you’ll simply be able to claim relief on your property finance costs at the basic rate of Income Tax. Detailed information can be found on the GOV.UK website.

Expected this year

6. Post-COVID-19: Right to Rent re-checking means extra admin

Since social distancing was introduced, landlords and agents have been able to (a) conduct checks with tenants online via video interview and (b) accept copies of documents. But once the pandemic is over this amendment to the Right to Rent legislation will be withdrawn and the Government has said that tenants will have to be re-checked in person with their original documentation. More information is available in our full blog on changes to Right to Rent.

7. Energy efficiency: response to consultation

Following the Government’s pledge to upgrade as many privately rented homes as possible to an EPC rating of ‘C’ they opened a consultation towards the end of 2020 on how best to improve the energy efficiency of properties in England and Wales. This closed on 8th January and the feedback is currently being analysed, but be aware that they are suggesting a ‘C’ rating by 2025 for new tenancies and 2028 for existing ones, so if you are refurbishing property it may be better to ensure it meets future standards now.

8. Capital Gains Tax (CGT) system being reviewed

Last year, the Chancellor commissioned a report from the Office of Tax Simplification to see if CGT could be simplified. The recommended changes include:

  • CGT rates should be brought more closely in line with income tax rates – i.e. there should be an increase
  • The tax-free allowance (currently £12,300) should be cut to between £2,000 and £4,000
  • Where assets are exempt from Inheritance Tax, they shouldn’t also benefit from CGT uplift

If you’ve got a property tax adviser or wealth manager, it’s worth talking this over with them to make sure you mitigate your future tax liabilities as far as possible – ideally before the next budget in England on March 3rd.

9. Introduction of the Renters Reform Bill in England

A number of key changes to the lettings process are proposed in this Bill, including:

  • Abolishing Section 21
  • Introducing a ‘lifetime’ security deposit that follows the tenant from one property to another
  • Making the database of ‘rogue’ landlords and agents accessible to tenants, agents, landlords, employers and professional bodies

The Bill has been delayed because of the pandemic, but once restrictions have lifted sufficiently and “there is a sensible and stable economic and social terrain”, the government is keen to move it forward.

10. Possible interest rate changes

If a change is made to the Bank of England base rate, this can then be reflected in Buy to Let mortgage rates. As such, it might be sensible to speak to your mortgage adviser to check how a rise in rates could impact your rental profits. And if you would like any other advice, you can contact our partners, Embrace Financial Services, via our website

Are you on the best Buy to Let mortgage rate? Book a review to find out >

Since this was originally written, the stamp duty holiday has been extended to 30 June 2021 see latest information in our blog

Blog updated on 3 March 2021



Embrace Financial Services usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.