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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Phew! Property auction guide prices are not misleading, says advertising watchdog
A complaint against leading auctioneer SDL Auctions by a member of the public to the Advertising Standards Authority (ASA) that its listed property auction guide prices were misleading has not been upheld. In an important judgement for the property auction industry, the ASA did not agree with the complainant, who had attended an SDL auction in Birmingham on the 6th July. The complaint in effect challenged the bedrock of the auctioneering industry – that houses often sell for much more than their guide price, and that guide prices are often changed during the run-up to auctions as vendors change their minds on their desire reserve price. £1 properties During the auction, at which several properties were offered with a guide price of £1, the complainant said many properties offered at the auction sold for significantly more than the guide price, and challenged whether the auction brochure’s guide prices were therefore misleading. After examining SDL Auctions’ catalogues for the auction and other paperwork, the ASA has concluded that because the company defined the difference between a guide price and a reserve price prominently in its catalogues, and because it routinely updates properties’ guide prices during the run-up to auctions to keep…
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Dominic Raab is the new Housing Minister
The cabinet shuffle continues at No 10 Downing Street, so we now know the identity of our new Housing Minister: Dominic Raab MP for Esher and Walton, in Surrey. He will work in the newly-named Ministry of Housing, Communities and Local Government, which is headed by Sajid Javid. How their respective roles will converge is not yet clear. Aged 43, ‘Dom’ (to his friends) was an international lawyer at Linklaters before joining the Diplomatic Service. He was elected to Parliament in 2009, as a Conservative MP with 59% of the vote. In June 2017, he was re-elected and appointed Minister of State for Justice. Away from the House, he may be found wearing a black belt or training at his local boxing club, so we’d best keep friendly with our new Minister – the 16th in 20 years. Raab’s appointment will make him the 16th holder of the title of Housing Minister in just over 20 years, taking over from Alok Sharma, whose tenure of the title has been just six months. The average term of each housing minister has been approximately 16 months. Alok Sharma, has now been appointed Employment Minister, in recognition of ‘the difficult work he undertook in…
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Universal Credit is “car crash” for tenants, landlords and agents, says MP
Universal Credit has been an “ideological error” for the 1.2 million tenants on housing benefit within the system as well as landlords and agents, it has been claimed by Stephen Lloyd, MP for Eastbourne (pictured, right). This is despite the Chancellor’s measures in his budget last November, which attempted to mitigate the financial stress of those moving to Universal Credit falling into rent arrears as they awaited payment. Stephen’s comments came during a debate he led in the House of Commons this morning during which speakers from all sides of the political spectrum savaged Universal Credit and its effect on the housing sector. As well as dramatically increasing the number of people presenting themselves to councils as homeless after being evicted from private rented properties for rent arrears, Universal Credit has made many private landlords reluctant to rent to claimants, he said. “Many years ago I warned that this would be a car crash, and it has become one,” he said. Quoting figures given to him by the Residential Landlords Association, he said 87% of landlords will not rent their properties to Universal Credit claimants and that among those who did, 38% have experienced rent arrears problems. He then called…
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Tenant fees ban WILL drive up rents and lower property standards, MPs are told
MPs put the new housing minister Sajid Javid’s tenant fees ban legislation under scrutiny last night, and it was proven to be lacking on several fronts. Landlords are likely to increase their rents across the tenancy to pay the extra costs of running a tenancy, something the new law can’t stop, and that there is a substantial risk local councils will impose unjustifiably high fines on agents and landlords to finance enforcement, in the absence of government support, it was claimed. The other key criticism made during the session was that the draft bill is likely to be self-defeating – lower fees will mean letting agents are less incentivised to help landlords run their properties professionally. These views were all the more surprising given they came from experts from the policy end of the sector, not agents. The two-hour long session was held by the parliamentary committee that oversees Sajid’s department, the Select Committee that oversees the newly renamed Department for Housing, Communities and Local Government. Tenant fees ban Headed up by MP Clive Betts plus 11 other MPs, it quizzed three experts in the field about how effective the bill will be. These were Shelter’s Head of Policy Kate…
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Scotland leads the way in conveyancing with seven-days-a-week service for buyers
The weekend has always been every agent’s nightmare when a sale is going through the final stages as conveyancing solicitors down tools for a – probably – well-earned rest. But that is set to change in Scotland after a conveyancing firm announced that it is to begin a seven-days-a-week service to help buyers gain the competitive edge. Unlike other conveyancing firms including those in England and Wales that offer online case tracking and call-centres over the weekend, Edinburgh and Glasgow-based Gilson Gray says it will offer a full service including ‘live’ partners on hand to give advice. Weekend legal advice is a key differentiator in Scotland. There solicitors are the first port of call for buyers hoping to make an offer and, therefore, waiting for a whole weekend for their offices to open can be a disadvantage. Gilson Gray’s service will be offered to private purchasers at first before being rolled out to housebuilders, developers and mortgage brokers, who will be able to help their customers get ready to buy a property faster. “Traditionally, people look at a range of properties over the weekend and if they see one, they have to wait until the Monday to contact their solicitor…
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Many rental properties not affected by letting fees ban, study reveals
The letting fees ban may not impact agents as much as many feared it would, a survey of 30,000 agents has found. Three quarters of those who responded to the survey by The Negotiator in partnership with Spark Energy said between 10% and 25% of their properties under management would be affected by the tenant fees ban, and that only 2% said that ‘most or all’ would be affected. But the issue continues to worry agents, 68% of whom said it still remains their biggest worry for 2018, the survey – which is published in full within the latest issue (pictured) of The Negotiator magazine – found. Among the agents who responded 86% had 500 properties or fewer under management, 8% had between 501 and 1000 and 6% managed more than 1001 properties. But on the ground, agents currently have more pressing operational issues to worry about than the fees ban. Nearly a half of the agents said their biggest issues were damage to properties by tenants while 36% said problems with rental payments came second. Some agents are also becoming irked by what they see as ‘over regulation’ of the rental sector. Among them, 45% said there was too…
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Government reveals HMO and ‘rogue agent’ crackdown
Housing minister Alok Sharma is to proceed with plans to significantly widen HMO licensing in the UK, and has also published the range of criminal offences that will soon trigger letting agents and landlords being automatically banned from the sector. The new measures will introduce significant additional responsibilities for landlords, letting agents and property managers, and stiff penalties for those convicted of certain criminal offences. The HMO measures, which apply to England and are to be introduced in April 2018 – assuming parliamentary approval – will see some 160,000 additional properties brought into licensing. The proposals frame these as those housing five or more people from two or more separate ‘family groups’. This significantly widens the range of property types included within HMO regulations, which used to only include properties with three or more storeys. Now, apartments and smaller houses will have to be licensed if they fit the new criteria. Enough is enough and so I’m putting these rogue landlords on notice – shape up or ship out of the rental business.” Alok Sharma, Minister for Housing Also, bedrooms offered by landlords and letting agents within HMOs will soon have to meet a new minimum size standard of 6.52…
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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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