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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London Rental Standard faces Khan ‘review’
Boris Johnson’s flagship London Rental Standard (LRS) scheme has a less certain future after Sadiq Khan’s team confirmed to The Negotiator that it is now ‘under review’ with a decision on its future likely ‘very soon’. The LRS is already on shaky ground. Soon after coming to office Khan released papers revealing that City Hall officials warned Boris Johnson back in 2013 that the scheme’s target to sign up 100,000 landlords was “unrealistic and unachievable”. Launched in May 2014 it is supposed to enable tenants to ‘rent with confidence’ and give landlords ‘peace of mind’ and has the strong support of the industry including the Association of Residential Letting Agents, whose parent organisation NFoPP runs the accreditation programme for ARLA agents wanting to join. The LRS originally brought seven landlord accreditation schemes across London under one roof but was a voluntary scheme for letting agents and so far, only 338 have signed up to it via their membership of either ARLA, the National Approved Letting Scheme or the UK Association of Letting Agents. It’s invisible on the main portals and for example Zoopla doesn’t use the logo on the details pages for LRS members such as Foxtons, and agents are left to…
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Cherie Blair says: axe the tenant tax!
Landlords fight back over The Tenant Tax: Cherie Blair QC is to represent the organisation called, ‘Axe the Tenant Tax’ at a permission hearing for judicial review of section 24 of the Finance Act 2015 on Thursday 6th October 2016 at the Administrative Court, Royal Courts of Justice, WC2A 2LL The organisation says that changes proposed in Section 24 of the Finance (No.2) Act 2015 will stop buy-to-let finance costs (largely mortgage interest) being a claimable business expense. This means, they say, that most landlords with mortgages will now have to pay tax – The Tenant Tax –on their turnover rather than their profit and no other business in the UK is treated in the same manner. Many landlords will have to pay extra tax of 20 per cent or more of their mortgage interest payments. The tax they pay might be greater than their real profit, leaving them with a rental loss and a cash shortfall. This tax will only affect individuals who own rental properties in their own names, like the millions of smaller landlords in the UK. Companies owning buy-to-let property and wealthy cash investors are excluded from the tax. Co-claimants Steve Bolton, Founder of Platinum Property Partners, and…
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Trading Standards backs TPO stance on portal juggling
The National Trading Standards Agency Estate Agency Team (NTSEAT) has waded into the issue of portal juggling with a resounding thumbs up for The Property Ombudsman’s imminent changes to its guidance. James Munro, who leads the NTSEAT, today said that he welcomed the TPO’s new guidance, which will be published on Saturday. It is likely to prevent TPO member agents from misleading consumers by removing and re-listing homes on property portals, enabling them to hide price cuts and make properties appear new to the market when they are not. Munro said he believes many agents do this to “manipulate sales figures” and that the new TPO guidelines could, he says, “lead to a ruling by the Ombudsman and also referral to enforcement agencies such as NTSEAT and local trading standards authorities”. “Such referrals could lead to prohibition orders or prosecution,” he added, and that “we will continue to work closely with industries bodies to stop this unfair practice, which misleads prospective homebuyers and harms honest estate agents who conduct their business in a fair and professional way.” One agent The Negotiator spoke to, who wished to remain anonymous, pointed out that although “unscrupulous”, it was a practice created in part…
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Online rental fraud: scams create landlord nightmares
Rental fraud is on the rise, fuelled by a highly competitive rental market and low cost, or free-to-list platforms for advertising property. Research conducted by YouGov in 2013 estimated that over 1 million people had fallen victim to rental fraud, with at least a further 315,000 new victims each year, showing just how widespread the problem has become. Reported incidents increased by 44 per cent from 2014 to 2015, from 2216 reported incidents in the year ending March 2014, to 3193 in the year ending March 2015. However, it is likely that these figures underestimate the real scale of the problem – the Local Government Association claims that only 5 per cent of fraud incidents are reported. Classified advertising sites have become breeding grounds for scammers to post fake or misleading adverts at little cost and with few security measures. It is estimated that bogus landlords are making £775 million per year through rental scams, with an average cost per victim of roughly £2400. Now, the property classifieds site TheHouseShop.com has implemented a unique ownership verification process, using Land Registry databases, which, they say, combined with their numerous other security and safety checks, sets a new standard for security in…
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Local tragedy sparks campaign against letting fees
A councillor in Southend, Essex has vowed to do battle with local agents who charge tenants high letting fees after his son killed himself over the cost of renting a flat. Southend independent councillor Tino Callaghan says the council has supported his motion to ‘name and shame’ local agents charging tenants high administration costs. Mr Callaghan, who launched the initiative with fellow councillor Laurence Davis, says his son was worried because he couldn’t afford the cost of a deposit for a flat to house his family. “Registration fees can be astronomical and we have spoken to many tenants who been caught out with fees,” Mr Davis told the Halstead Gazette. “The council can’t enforce anything but they can name and shame those who are not acting in the best interests of the public.” This tragedy played out in Southend is the latest development in a growing campaign by several media outlets, councils and politicians to highlight what they see as the excessive administration fees charged by some agents. This includes The Guardian newspaper which recently called fees a ‘great letting agency rip-off’ while in May this year the London Borough of Tower Hamlets gave six local agents 28 days to display…
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80,000 homeless families every year
Labour MP calls for more action as a new Homelessness Reduction Bill is published.
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Portal juggling? Beware, Trading Standards officers are on your case.
“This is an illegal practice that misleads homebuyers on property websites and estate agents are warned that they could be prosecuted and face a ban from working in the industry.”
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Right to Buy Scheme: expanding in England, shut down in Scotland…
And now Wales says it will scrap its Right to Buy as well.
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