Agents are being advised to update the inventories they use to better reflect the wear and tear incurred by tenants who work from home.
Propertymark is suggesting to members that they communicate with tenants at the start of the tenancy to set clear expectations and then apply wear and tear guidance fairly and consistently.
“We encourage members to provide detailed check-in and check-out reports, ideally with photographs, to support clear apportionment decisions”‘says the trade body.
This new guidance comes as a result of a study by Inventory Base, which shows furnishings are wearing out up to 30% faster. A carpet that once lasted wight years may now only last 5.6 years. Repainting is needed more often, and sofas endure greater strain.
Propertymark explainsthat fair wear considers the length of the tenancy, the number and age of occupants, and the condition and quality of the item at check-in. This protects tenants from unfair deductions, while giving landlords confidence in knowing when charges are appropriate.
Under current HMRC rules, landlords can claim for actual costs incurred when replacing domestic items, but only like-for-like.
This is known as the Replacement of Domestic Items Relief, which replaced the old 10% Wear and Tear Allowance in 2016.
Eligible items include movable furniture (e.g. beds, sofas, wardrobes), furnishings (e.g. carpets, curtains, floor coverings), and appliances and kitchenware used by the tenant.
Landlords can claim the cost of the replacement, but not the cost of an upgrade. So, if a £400 sofa is replaced with a £550 sofa bed, the relief applies only to £400.
This relief applies whether a property is let furnished, part-furnished, or unfurnished. It is claimed via Self-Assessment.
Inventory Base, along with the Tenancy Deposit Service, are now calling for:
- Updated definitions of fair wear in tenancy deposit schemes;
- Modernised depreciation guidance;
- Clearer legislation on “reasonable use” in court rulings.
Propertymark says it agrees that regulations must evolve with living patterns and encourages policymakers to review guidance so that neither landlords nor tenants are unfairly disadvantaged.
