Regulation & Law
News articles looking at national legislation and local regulation and the application of law to the residential property industry.
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Sweeping reform of ‘unfair’ leasehold system to go ahead, says Minister
A promised leasehold reform programme is to go ahead following a consultation process that launched in July. Communities minister Sajid Javid’s new measures to tackle unfair and abusive practices within the leasehold system will see almost all leaseholds banned for new-build houses – except when a property is in shared ownership – and that ground rents for new leases will have to be at zero for both apartments and houses. Sajid (pictured, below) has also revealed that he is to make it much cheaper and easier for the UK’s 1.4 million leaseholders to buy-out their freehold. “It’s unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms,” the minister says. “It’s clear from the overwhelming response from the public that real action is needed to end these feudal practices. “That’s why the measures this government is now putting in place will help create a system that actually works for consumers.” Also, Sajid’s department is to work with the Law Commission to help leaseholders win redress for existing onerous terms and conditions within their leaseholder – which will hearten the many vendors and agents trying to sell properties crippled by such clauses. Grant Lipton…
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Commons committee measures up property industry for Brexit risk
The effect Brexit is likely to have on the property industry has been revealed by a House of Commons committee. Its research, published today, shows that 3% of the UK’s 43,000-strong sales, lettings and property management related workforce are EU nationals and 1.5% are non-EU nationals – or nearly five percent of the workforce in total. Based on ONS figures, the committee therefore concludes that if many of these people were to leave the UK and return to their home countries, it would not pose a threat. “The work of UK-based estate agents is primarily domestic and is generally not highly dependent on EU labour,” the report by the House of Commons Committee on Exiting the European Union says. Brexit: EU renters More problematical is the high number of ‘other nationalities’ who rent properties in the UK, the Brexit report suggests. It quotes the most recent English Housing Survey, which points to nearly a quarter of all privately rented accommodation being inhabited by EU nationals or those from outside Europe. The ‘other nationalities’ highlighted in the report also own 3.4% of all owner-occupied properties, although this is much higher in central London’s prime districts, and 8.4% of local authority –…
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Independent estate agent challenged over speed-of-sale claims
Independent estate agent Curchods has got into hot water with the advertising watchdog over two direct mailshots it sent out recently. In both the mailshots the company, which has its headquarters in West Horsley and operates 21 branches across Surrey, made claims about how fast it could sell properties and exchange contracts, and also the total value of its property sales over the past 12 months. But a single complainant – presumably a local competitor – challenged whether theses claims could be substantiated, and the Advertising Standards Authority (ASA) approached Curchods – which is owned by parent company Simpsons Estate Agents Ltd – to investigate. Curchods, which is one of Surrey’s oldest estate agent brands with a history stretching back 75 years, agreed to withdraw the marketing material containing the claims about average speed of contract exchange. Also, the company agreed to insert qualifications into other material about the number of sales per hour it achieves and was able to prove to the ASA the number of sales it had made over the past year. On this basis, the ASA says the complaint was informally resolved. Brexit worries Curchods’ parent company Simpson Estate Agents bought the sales operation of local…
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The effect of long term tenancies and landlord fees
The looming demise of tenant fees is not your only problem, says Adam Walker, it’s time to look at the effect of long term tenancies and landlord fees.
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Online agent YOPA investigated again by advertising watchdog
Online agent YOPA has been investigated by the advertising watchdog just two weeks after being reported for potentially misleading claims on its website. This time the London-based sales and lettings agency was reported by a member of the public for a mailshot sent to them that advertised its sales service but, they claimed, wasn’t clearly marked as marketing material. After being approached by the Advertising Standards Authority (ASA), YOPA has now promised not to repeat the mailshot and that future advertising of this kind would be clearly marked as such in future. YOPA has been reported five times since it started two years ago including three times this year and once in 2016 and 2015 all of which have been informally resolved, although this hasn’t deterred investors – both Savills and LSL have put substantial amounts of money into the firm. Online agents Among the online agents, Emoov leads the pack for complaints to the ASA with ten referred to the watchdog so far including two serious complaints, one of which was upheld and another upheld in part, and eight informally resolved cases. Not far behind it is Purplebricks, which has had been referred to the ASA nine times including…
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Even landlords support tenant fees ban, claims Welsh minister following consultation
The Welsh Housing Minister has claimed that the “vast majority” of people and organisation who contributed to a recent consultation on letting fees in Wales support her government’s proposed tenant fees ban including a “significant number of landlords”. Rebecca Evans, Minister for Housing and Regeneration (pictured), said 700 responses were received from tenants, landlords and letting agents and said early analysis of these responses revealed “strong support for action in this area”. Although a full response to the consultation is not expected until the New Year, the Minister says support for a ban is strong enough for her to reveal that a ban will now go ahead, bringing Wales in line with Scotland and soon, England. “I have therefore instructed my officials to proceed with plans to develop legislation,” she says. “Officials will also begin a programme of engagement with stakeholders to share information and help us shape detailed plans about how future legislation would work in practice.” Tenant fees ban It would appear that the Minister has not been swayed by ARLA’s postition that a ban would make renting more expensive in the long run, a claim it made in July when a proposed Welsh fees ban was unveiled.…
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Lettings legislation: is Government listening to the professionals?
Chancellor Philip Hammond’s autumn budget has failed to address the challenges faced by Britain’s ten million renters, says Belvoir CEO Dorian Gonsalves (pictured). “We are disappointed that despite persuasive arguments from many key financial and industry experts, there has been no reversal of the punitive tax changes that were imposed on landlords by George Osborne in 2015,” says Dorian. “We believe that reversing those tax changes would have been an important factor in helping to increase the supply of rental properties in this country and would alleviate some of the pressure on a Private Rental Sector (PRS) that is facing unprecedented stress as tenant demand continues to increase and less good quality housing is available to accommodate this. Dorian says that it isn’t just a lack of a deposit and affordability issues in buying a home that aree driving tenant demand – “In many ways this budget seemed almost to put an unhealthy emphasis on home ownership and failed to recognise that many young people are actively choosing to rent rather than to become first time buyers. “The reasons for renting are numerous, the English Housing Survey of 2015-16 showed that first time buyers are increasingly likely to live in…
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Stamp Duty cut: first-time buyers rejoice, but experts warn of price rises
If Chancellor Philip Hammond thought his Stamp Duty cut for first time buyers announced during yesterday’s Budget would get a unanimous thumbs up, then things definitely aren’t going to plan. Firstly Robert Cote, Chairman of the Office for Budget responsibility, revealed that his organisation thought the tax cut would push up prices by 0.3% and that “the main financial gainers will actually be people who already own properties, rather than first time buyers themselves”. Treasury Chief Secretary has subsequently dismissed the OBR’s prediction and just a “minor increase”. But Mark Hayward, Chief Executive of the National Association of Estate Agents (NAEA) (pictured, left) also sounded a note of caution saying that although overall it was a positive move, it would increase house prices by pushing up demand for first time buyer properties. “We have seen this in areas where Help to Buy is offered, as it attracts a great deal of interest from first time buyers,” he said. Sarah Beeny, TV presenter and founder of online agent Tepilo (pictured, right), also weighed in, saying she thought the measures would not make a huge difference to the market. “Cutting stamp duty for first time buyers is unlikely to do much –…
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Budget 2017 – big news for first time buyers, landlords and tenants
Chancellor Philip Hammond has made several key housing announcements that will impact both the sales and lettings sectors of industry and which he said was part of a £44 billion package. “House prices are increasingly out of reach for many and it takes too long to save for a deposit and rent absorbs too much of people’s ability to save for a deposit,” he said during his speech. The most important of these is that Stamp Duty is to be abolished for first time buyers and, in more expensive areas of the UK such as London, the first £300,000 of a property’s sale value exempted from Stamp Duty, if priced less than £500,000. This, the chancellor said, would remove any Stamp Duty obligations for 80% of first time buyers. Other measures included enabling councils to charge a 100% council tax premium on empty properties – which may force many landlords to either rent out their properties or sell them. “Penalising empty home owners with a 100% council tax premium is unlikely to really be a deterrent for people who are likely to be high net worth,” says Nick Leeming, Chairman of Jackson-Stops. “If they don’t need the rent, this penalty…
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Electrical installation checks of rented properties to become compulsory
Letting agents and property managers in England and Wales will soon have to organise electrical installation checks of privately rented properties following the recommendations of a government report. After a detailed examination of the subject, the working group set up by the Department for Communities and Local Government (DCLG) has recommended that electrical installation checks should be compulsory for properties within the Private Rented Sector (PRS) and carried out every five years. The working group also says a scheme should be set up to register and approve the people who will carry out the checks and separate electrical safety from the Building Regulations regulatory framework. Led by five senior figures from the DCLG, the working group’s members included every membership organisation within the lettings industry including most of the main membership associations representing agents and landlords. electrical installation checks The final recommendation is that the requirements for electrical installation checks should be phased in, starting with new tenancies before being rolled out to include existing ones. But the rest of recommendations are not mandatory and include instead recommendations. These include that landlords or agents should carry out visual checks of electrical equipment at a change of tenancy, that paperwork confirming…
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