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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City firms bid to replace tenant deposits with insurance passport
A tenant deposits platform backed by two major City firma has launched with the aim of competing with the current cash deposit schemes. Backed by both Hiscox insurance and credit score provider Experian and accessed via an iPhone app, InsureStreet says it will issue renters with a digital ‘RentPassport’ that validates their profile and then provides them with an instant insurance quote to cover their deposit. Tenant deposits Instead of paying a cash deposit, renters make a one-off payment for an insurance policy that covers them for the duration of the rental contract. InsureStreet claims that in most cases, this insurance premium will be less than a tenth of the cost of a deposit, and that the system will reward good tenant behaviour by offering lower premiums at renewal. The app is free for agents, landlords and renters to download and use, the company says. But what’s not clear is whether the premiums paid by renters for the insurance will be included in the looming letting fees ban. The Negotiator asked CEO Tahir Farooqui (pictured, below) about this. He replied that: “We absolutely support the letting fees ban and so do many of the property partners we are engaging with” which would indicate…
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EasyProperty withdraws advertising claims after ASA probe
Online agent easyProperty.com has agreed to withdraw several claims about its service from any future advertising following a complaint to the Advertising Standards Authority (ASA). The complaint was made by a member of the public who had clicked on a link within a Google-sponsored search result to an ad that included: “Get an offer within 20 weeks”, “Save £2809 on estate agent fees”, “No commission fees” and “Save with low fixed fees”. After contacting easyProperty, the complainant was quoted a saving of less than £2,809 and “was not given an explanation of how the advertiser could get them offers within 20 weeks”, the ASA says, and then challenged whether the claims in the ad were misleading and could be substantiated. Claims removed EasyProperty has now removed “Get an offer within 20 weeks” and “Save £2809 on estate agent fees” from its advertising. It also agreed in future ads to use less definitive savings claims – such as ‘You could save’ and that they would make it clear that the ‘offer within 20 weeks claim’ actually referred to their money back guarantee offer, whereby consumers would receive a refund if their property wasn’t sold within 20 weeks. On this basis and…
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Jeremy Corbyn reveals Labour will crack down even harder on rental sector
Labour leader Jeremy Corbyn has announced that if he wins power the private rented sector would see the introduction of tougher regulation under his government. He told The Guardian newspaper today that this would include more secure tenancies, the adoption of the Conservative’s plans to ban outright fees charged to tenants, and the prevention of unreasonable rent increases. He said these would all be wrapped up within a new charter of private tenants’ rights. “We will tackle soaring rents in the private rented sector through regulation,” Jeremy Corbyn also announced on his campaign website. Labour also plans to build a million new homes including half a million new council properties during its first five years in office. “We will rebuild and transform Britain by building council homes and homes that first-time buyers can afford,” he says. Priorities “There are obviously many priorities but the crisis of housing and setting in train a housing programme that would build more council housing at socially affordable rents and ensuring there is proper regulation of the private rental sector is a very high priority for me,” Jeremy Corbyn told The Guardian. Labour strategists believe housing is one of the key concerns of ‘generation rent’ while official…
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Former Ascot property developer jailed for £640k fraud
A former Ascot property developer, who hijacked details of an offshore company in the British Virgin Islands and forged documents to commit fraud and evade VAT, has been jailed for three years and seven months. He was also trading while disqualified as a company director. HM Revenue and Customs (HMRC) investigators discovered that in June 2011 Keith Conner, 55, hijacked the details of the British Virgin Islands registered company, Pruton Investment Holding Ltd, to buy and sell a residential property in Thurloe Square, Kensington, London. Conner then forged a Power of Attorney document, in the name of a Malaysian businessman, to transfer the £309,000 profit from the London sale into a company bank account he controlled. A similar property deal in October 2011 involved the purchase and immediate sale of a business property in Earls Court Road, Kensington. Conner again hijacked the details of a company to commit the fraud, this time a UK based company, Bishopsgate Homes Ltd. Investigations showed that signatures had been forged on the contracts, leading to £331,000 in profit from the sale being paid into another bank account Conner controlled. The directors of the UK business had no involvement with their company being used for…
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Scottish letting agents welcome new regulation
The Letting Agent Code of Practice Regulations will come in to law in Scotland in January 2018. Measures within the code include setting up a Letting Agent Register.
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TDS issues reminder on Immigration Act
New legislation on the Right to Rent came into effect on 14th November 2016 and The Tenancy Deposit Scheme has issued a reminder for letting agents.
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Theresa May does it her way – 8th June is Election Day
Election Day has been confirmed by Parliament and it will take place on 8th June 2017 – and by a massive majority of 522 to 13, a result that must have delighted the Prime Minister, Theresa May who needed 434 votes to go ahead. Mrs May urged the British people to ‘put their trust in me.’ Nine of the 13 MPS who voted ‘No’ were Labour: Ronnie Campbell (Blyth Valley), Ann Clwyd (Cynon Valley), Paul Farrelly (Newcastle-under-Lyme), Jim Fitzpatrick (Poplar and Limehouse), Clive Lewis (Norwich South), Fiona Mactaggart (Slough), Liz McInnes (Heywood and Middleton), Dennis Skinner (Bolsover) and Graham Stringer (Blackley and Broughton). the other four were Alasdair McDinnell, SDLP and Independents Lady Hermon, Michelle Thompson and Natalie McGarry. David Westgate, Chief Executive of Andrews Property Group, was surprised, but says it’s business as usual, “Theresa May’s announcement that she intends to seek the support of MPs to hold a snap election on June 8 undoubtedly came as a surprise, but we must not let it destabilise the property market. Elections can lead to uncertainty and that can affect confidence; however the mechanics of the market are such that it is driven by demand and that remains extremely high at the moment. We need to seek ways…
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NLA questions Right to Rent scheme
The Right To Rent immigration control scheme introduced by the government in England last February is not having the “desired effect”, the National Landlords Association says. The comments come from its head of policy Chris Norris in reaction to figures released today showing that one landlord is being fined every four days under the Right to Rent rules. Sixty-two landlords received penalties under the scheme during its first eight months of operation from February to September last year, the figures show. Fines totalling £37,000 were handed out, or £596 on average per landlord, although fines in theory can reach £3,000 for the most serious cases. Out of the 62 cases 36 were for lodgers in private houses and 26 were handed to landlords of private rented accommodation. The figures were obtained by the Press Association through a Freedom of Information request. Chris Norris, head of policy at the National Landlords Association (pictured, left), says he believes that most of the landlords involved are accidentally breaking the immigration rules rather than knowingly doing it. He also said that “ultimately this scheme should be judged on whether it tackles or prevents those who knowingly ignore the law and let to people who…
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UK to set up world’s first property register of properties owned by foreign companies
The government has announced plans to introduced a nationwide register of foreign companies that own properties in the UK in a bid to tackle corruption. In what is claimed to be a world first, the system will reveal the beneficial owners of property controlled by overseas companies and other legal entities such as partnerships. This will end the current and very common practice of foreigners owning UK property through offshore registered companies, as highlighted by Channel 4’s From Russian with Cash documentary in two years ago. Offshore trust During it one of the agents was filmed suggesting how 80% of sales at the time in central London were with international, overseas buyers and that “50 or 60%” of them were carried out in “various stages of anonymity…whether it be through a company or an offshore trust”. Police investigations looking at international corruption within the UK have identified more than £180m of property in the UK that are suspected proceeds of corruption, and that 75% of those involved were using international companies to cover their tracks. “Greater transparency of ownership brings many benefits,” says Margot James, Minister for Small Business, Consumer and Corporate Responsibility. “We know that market transparency fosters confidence…
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How much will agents lose when letting agent fees ban kicks in?
It’s a figure much discussed within the consultation document published on Friday setting out the Department of Communities and Local Government (DCLG’s) plans to introduced a letting agent fees ban. If the DCLG’s plans are implemented as they stand following the consultation period, then neither landlords nor agents will be able to charge tenants any “fees, premium or charges to facilitate the granting, renewal or continuance of a tenancy”. “The Government also proposes to ban any letting fees charged to tenants by landlords and any other third parties to ensure that letting agent fees are not paid by tenants through other routes. Tenants should only be required to pay their rent and a refundable deposit,” the consultation says. Average fee Within the document’s detail, the DCLG says the average fee taken by agents is between £200-300, based on the 2014-15 English Housing Survey, while the National Approved Letting Scheme (NALS) is reported to have indicated an average fee of £172 with a range of between £30 and £500. Campaigning group Generation Rent told DCLG that the average for a couple renting a home is £400 within range of between £40 and £780, while homelessness charity Shelter believes one in seven renters…
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