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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Rogue letting agent jailed after National Trading Standards investigation
A rogue letting agent and landlord in Lancashire has been jailed for three years and nine months after he was convicted at Bolton Crown Court of nine counts of fraud, theft and forgery following a lengthy investigation by the National Trading Standards. Tahir ‘Tony’ Khaliq (pictured, left) operated a string of property companies including several letting agencies which he used as vehicles for his fraudulent activity. The most shocking was the theft of holding deposits of between £200 and £400 from over 100 prospective tenants, many of whom were extremely vulnerable people mainly in the Rochdale, Bury and Oldham areas. Khaliq, with the help of accomplice Paul Dickinson – who received a two-year suspended sentence and 240 hours of community service – took the holding deposits and claimed they were processing fees for unsuccessful tenancy applications. The court heard how one woman, after losing her holding deposit, was forced to move into a Mother and Baby unit, as well as another who experienced extreme financial difficulties while trying to save money to leave her violent and abusive partner. National Trading Standards says Khaliq was involved in other illegal activities relating to his property businesses including forging documents, the theft of…
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Housing White Paper: key rental policies revealed
The Secretary of State for Communities and Local Government Sajid Javid (pictured, right) presented the government’s housing White Paper to the Commons today with the aim of fixing the UK’s ‘broken housing market’. During the run-up to Javid’s statement to parliament several ministers including housing minister Gavin Barwell had suggested that the government was keen to break its historical fixation on home ownership and focus instead on the rental market. His preamble to parliament sounded promising. During it he warned that even renting a decent home had become a “distant dream” for many, and that this was the “biggest bar to social progress this country faces”. But there is less evidence of this in the White Paper than many within the industry were expecting, and Javid only referred once to the rental sector in his statement, saying he wanted to “improve safeguards in the private rented sector”. You have to scroll down to page 50 in the White Paper before key measures designed to achieve this aim are found, not quite the seismic change of direction many were expecting. Build to rent The first measure is to encourage more institutional investors to get into in Built to Rent, which is not new,…
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Housing White Paper: Is this the week when everything changes?
The Government’s much-anticipated housing White Paper is due out this week and already several government sources including housing minister Gavin Barwell have indicated that a radical shift in policy is to take place. After nearly forty years of preferring and supporting home ownership over renting, several Whitehall sources as well as ministers have indicated they intend to tackle the rental market to make it a more secure housing option. Communities secretary Sajid Javid (pictured, left) said he wanted housing to be more affordable and that the rental market must offer more choice. He described both the rental and ownership markets as ‘broken’. The main thrust of the White Paper is likely to include three-year long family-friendly tenancies, tougher action against rogue landlords, more ‘affordable rent’ properties within new-build developments, as well as more detail on the letting agent fees ban consultation. Gavin Barwell (pictured, right) appeared on BBC1’s Sunday Politics TV programme and, during a grilling by presenter Andrew Neill, admitted that the government’s track record on building affordable homes was ‘embarassing’ and that wanted that to stop that in the future. “Whether you are trying to buy or to rent, housing in this country has become less and less…
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62% of letting agents say ban will reduce rental property quality
The Association of Residential Letting Agents (ARLA) has come out fighting on the fees ban, saying it opposes a total ban and that fess should instead be spread out over the first six months of the tenancy. It also says a ban is likely to have shocking consequences for the industry, tenants, landlords and the wider economy. ARLA has also completed research that it says shows 42% of letting agents think their headcount will reduce following a total ban, while 62% of the 1008 agents it canvassed think a ban will prompt a reduction in rental property quality, and 61% believe property management standards will drop. The research also reveals that letting agents “overwhelmingly” believe that rents will rise if a total ban is introduced, as they will “need to recoup the costs it takes to undertake the important jobs that fees currently cover [and] pass these on to landlords”, the research says. Agents spend eight hours on average completing the tasks needed to prepare a tenancy agreement including completing credit checks and collecting references, ARLA says. ARLA also claims that spreading the cost of fees to tenants over six months would make tenancies more affordable, enable agents to maintain…
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Heavy regulation has been good for Scottish rental market
Heavy regulation of the Scottish rental market in recent years has been a good thing for all concerned, says housing charity Crisis Scotland. After a clamp down on landlords and agents over the past ten years which has included four pieces of legislation, Crisis Scotland claims that all the potential downsides claimed by agents and landlords have failed to materialise. This has included increased responsibilities for and regulation of landlords and agents including an end to ‘no fault’ tenancy terminations, a Repairing Standard to enforce minimum property quality, strict HMO legislation, landlord registration and a ban on letting fees. Neil Guy (pictured), policy and practice manager at the charity, says the legislation has not restricted the growth of Scotland’s privatge rented sector (PRS) over the past ten years and that it has expanded faster than England’s, according to Scottish government housing data. Agents generally agree that the market is robust; for example Fiona Hindshaw of Clyde Property last month said that the “the general consensus across the board in Scotland is that the lettings market [during the final quarter of 2016] demonstrated continued strength and growth when compared to the same period in 2015 and we expect to see this growth…
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HMRC Stamp Duty take on investment property soars
The tax take on investment property soars again – is it fair? HMRC’s quarterly stamp duty statistics for Q4 2016 have been published, recording £2,379 million from residential property, delivering a super-sized Christmas bonus to the tax man – 20 per cent more than in the same quarter of 2015. This adds to the HMRC pot, giving a year-to-date estimated total of Stamp Duty receipts 17 per cent higher than the same period in 2015. Is the tax take fair? Nick Leeming, Jackson-Stops & Staff Chairman, says the Government is doing extremely well out of property investors, “So far £1,190 million worth of stamp duty receipts are estimated to be attributable to the additional 3 per cent element payable on second homes, a significant windfall for Treasury coffers. Between Q2 and Q3 the number of second homes liable for the 3 per cent surcharge nearly doubled. “This increase is understandable as many buy-to-let investors would likely have rushed to make purchases before April 1st, but the number of liable second home transactions is up again in Q4 to 62,800. “The data suggests that buy-to-let investors are not being deterred by the new tax which is supposed to be dampening demand from this group…
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Government to bring in ‘self-assessment’ for business rates
The 400-year old £26 billion business rates system is about to be turned on its head for the UK two million business premises owners, according to property consultancy Colliers. It says that following consultations on how to improve the creaking and out-dated system, the government favours a self-assessment system akin to the ‘tax return’ one used for income tax. Business rates for the UK’s 15,000 or more estate agency branches are based on rental valuations calculated every five years and, many agent owners often complain, are wildly inaccurate. In response to this the government launched a ‘Business rates: delivering more frequent revaluations’consultation in March last year. If Colliers’ prediction is true, a self-assessment style system will turn a 400-year-old tax regime on its head, although Colliers notes that it will place ‘the burden of red tape on to the ratepayer to make a correct assessment or face significant penalties’. “The official line is that the Government is looking at all the options,” says John Webber, Head of Rating, Colliers International (pictured). “However, my sources have confirmed that the ‘Big Four’ accountancy firms have been consulted on how to make self-assessment work and what lessons could be learned from personal taxation.…
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Stamp Duty surcharge hitting landlords hard, says Countrywide
The government’s assault on the buy-to-let market is having the desired effect on landlords, latest research from Countrywide reveals. It has revealed that since the additional three percent Stamp Duty was introduced in April last year 56 per cent of all purchases the company handled where a landlord and first time buyer competed for a property, the first time buyer won. Johnny Morris, research director at Countrywide (pictured, lefgt), said: “Given their inability to spread the higher rate over a longer period, these micro developers have been the buyers hit hardest by the higher rates. Across the country as a whole, their numbers are running at around half the levels they were.” Countrywide undertook the research between April and December last year and says some 9,000 fewer people buying their first home lost out to landlords than during the same period last year. The shift in activity within the market is down to fewer landlords being prepared to commit to a purchase once a bidding war over a property starts as a raft of measures, including extra Stamp Duty, have dampened landlord enthusiasm for purchasing more properties. This includes a severe reduction in the amount of mortgage interest relief they…
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‘Tenant fees ban will drive more landlords to self manage’
The tenant fees ban proposed by the government during Philip Hammond’s Autumn Statement recently will persuade more landlords to self-manage their properties, which in turn will place tenants in the hands of a largely unregulated part of the industry. This was one of the main conclusions of this week’s meeting of minds at the latest NALS Fair Fees forum, which met in central London last Friday at an undisclosed venue, and whose work NALS says it is ‘pretty pleased with’. It is preparing a comprehensive response to the looming government consultation on fees and the forum discussed a specially-commissioned report into the work of agents in securing tenants for a property, how the fees ban is working in Scotland for tenants, agents and landlords and how the ban might affect how the redress schemes operate. The forum was also reminded by representative from the Department of Communities and Local Government that the ban was unlikely to be kicked into the long grass and remained the ‘political will’ of ministers. Primary legislation is expected this Autumn with a fees ban to come in during early 2018. But industry representatives highlighted how a ban would lead to a poorer service to tenants and increased…
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York signs up agents to student To Let boards ban
City councillors in York say they have persuaded four agents in the city to sign up to a voluntary scheme that will see a To Let boards ban within key student areas around its university. It is claimed that four of York’s leading agents – Adam Bennett, IG Properties, Access Properties York and Sinclair Properties – have agreed to reduce or stop their usage of the boards. “We’ve been told many times over the years that these signs have a big impact on how neighbourhoods look, and there are concerns that they can advertise when student properties are empty,” Labour councillor David Levene (pictured) who used to be a student in the city until 2011 and was elected as a council on a platform of representing students and student issues, told the local paper The Press. “In reality, the vast majority of students find their accommodation online. I’m very pleased and grateful that Sinclairs, AP York, Adam Bennett, and IG have shown real leadership in signing up to this agreement.” The campaign to start a voluntary agreement over To Let boards in York was begun in November last year after complaints by local residents about too many boards in these…
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