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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Mansion Tax would be bad for property, warns agent
With just over a week until the General Election, London based estate agents Sandfords has joined a chorus of other industry experts and warn of the possible ‘disastrous consequences’ for the residential property market if Labour is elected into power. The estate agency firm is particularly concerned about the party’s plans to introduce a mansion tax on all homes worth more than £2 million, and the potential impact that the levy could have on the housing market in London as well as other parts of the country. _“In the immediate run up to the Election we are seeing a lot of influential individuals, economists and agents shouting about the reality of a Labour Government and the effects their proposed mansion tax will have on the whole property market, and not just in London,” said Tim Fairweather, a Director at Sandfords. “We have voiced our fears of Labour’s taxing policy on numerous occasions ever since its proposal but it’s now increasingly apparent that it will provoke far reaching problems that will have an effect on millions of everyday people,” he added. Although Labour insist that they want to help aspirational homeowners gain a foot on the housing ladder, Fairweather claims that…
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Ed’s last stand: “a load of cobblers”
General Elections bring out the opinions of the electorate and property people have been more than forthcoming in these last days before the big election day on 7th May. Naomi Heaton (left), CEO of London Central Portfolio says that Ed Miliband’s “last stand” is “a load of cobblers”. Among her points are: “The latest Labour pledge is to abolish stamp duty for first-time buyers buying homes worth up to £300,000 for the next three years. They have said that it will benefit nine in 10 such buyers to the tune of £5,000. Rubbish. “Labour is clearly very bad at its sums, which is why, of course, we are so worried about them running the economy. “The average purchase price for a first time buyer outside London is £137,120, (Halifax). Following the Stamp Duty reforms introduced by the Conservative coalition last December, the Stamp Duty charge for buyers at this level is just £242. This is what the Labour policy would save, not £5,000. “If we look at the country as a whole, including London, the average price for a first time buyer, is £171,870. Again, due to the recent reforms, Labour would be knocking off £937 off their purchase costs,…
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Political leaders vow to tackle housing crisis
High residential property prices are the single biggest concern among home-hunters, a new Rightmove survey reveals. The latest data from the property portal shows that asking prices for homes on sale in England and Wales hit an all-time of £288,133, on average, in the month to early April, pushed up by a drop in the number of properties on the market, creating a lack of choice in the market, which incidentally, is the second biggest concern for house-hunters. Miles Shipside (right), Rightmove Director and Housing Market Analyst, commented, “April’s Rightmove House Price Index reported an all-time high in asking prices this week of £286,133, setting an interesting challenge for political leaders. Failure to meet house-building targets since the eighties, nineties and noughties to match forecast housing demand has been a major factor in upwards price pressure both in the property sales and private rented sectors. “ As the cost of housing is a key concern for many home-hunters Rightmove asked David Cameron, Ed Miliband and Nick Clegg for their proposed solutions to make more affordable homes available, and what else they would do to try and solve the UK’s housing problems. Here are extracts from the interviews with the three…
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General Election
We are not even building half the number of homes that we need to keep up with demand. A record number of young people are living at home with their parents. Many young people and families are priced out of homeownership and some of these families are living in overcrowded conditions. We have committed to ban letting agent fees to tenants.” Despite the desperate need for more homes, under this Tory-led Government we have seen the lowest level of house building in peacetime since the 1920s and homeownership is now at its lowest level for 30 years. THE FUTURE Labour is committed to tackling the housing shortage and we have set out a comprehensive plan to get at least 200,000 homes built a year by 2020. Under our plan, we want to see all local communities take responsibility for their own future and plan for the homes local people need. A Labour Government will make it compulsory for every local authority to have a plan which sets out how it intends to meet local housing needs. But with that responsibility will come much greater powers to deliver the homes their communities need. We’ll give local councils the ability to designate…
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42% rise in complaints to The Property Ombudsman
There has been a significant increase in complaints made to The Property Ombudsman (TPO), partly due to a growing trend in the consumer world to challenge when a product or service does not offer satisfaction, and partly due to a sharp rise in the number of agents signed up to the TPO. Six months on from the introduction of new legislation, making it a legal requirement for lettings agents and property managers in England to join a Government approved redress scheme, the report shows that the number of letting offices now signed up to TPO scheme has reached a record level of 12,915, up 28 per cent year-on-year. This brings the total number of sales and lettings offices offering TPO’s free, independent dispute resolution service to 26,735. Commenting on the report, Christopher Hamer (left), The Property Ombudsman, said, “In 2014 we saw continued and significant growth in the Private Rented Sector. With an estimated 1.6 million private landlords, many of whom have limited experience and understanding of their responsibilities, and large numbers of consumers seeking tenancies, the role of letting and managing agents in providing quality customer service based on a comprehensive knowledge of relevant legislation, is more important now…
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Lib Dems reiterate Mansion Tax ambition with Election manifesto
The Liberal Democrat party has placed housing at the heart of its election manifesto, revealing plans to introduce a £100 cut in council tax for 10 years for people who insulate their home, as well as confirming that it plans to introduce a ‘mansion tax’ – originally a Liberal Democrat policy – on residential properties worth £2 million or more. Homes worth between £2 million and £2.5 million would face an annual mansion tax of up to £2,000 a year, under Liberal Democrat plans. Nick Clegg (left) confirmed the Lib Dems had scaled back the policy and it would now raise only £1 billion – considerably less than the £1.7 billion initially proposed. Mr Clegg commented, “It is less than originally mooted but as we have worked up the idea, looked at what we think is reasonable and fair, we think this is a reasonable and fair way of doing it and shouldn’t scare the horses.” The Labour Party has also proposed its own mansion tax, which would see properties valued between £2 million and £3 million paying £250 a month or £3,000 a year. The party is yet to set out details of higher bands. The Lib Dems’ manifesto,…
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Landlords’ body voice concerns over sub-letting
The Residential Landlords Association (RLA) has expressed concern over controversial plans to allow private tenants to sub-let their tenancies in England, announced by the Chancellor in the Budget last month. The Chairman of the RLA, Alan Ward (left), has written to DCLG Director General, Peter Schofield, seeking greater clarification over the detail of the proposals and has raised various questions as to how this would affect landlords with leases, licensing, and mortgage conditions, and why it is that this proposal has been put forward with no consultation. You can read Alan Ward’s letter in full below. Last month, tenant eviction firm, Landlord Action, also expressed grave concern over Government plans to allow private tenants to sub-let from their tenancies, claiming that it would be “catastrophic” for the rental market. “This appears to have slipped in under the radar which, if it goes ahead, will throw up a magnitude of problems in the buy-to-let industry,” said Paul Shamplina (right), Founder of Landlord Action. “We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented,” he added. Shamplina believes that “the risk of nightmare sub-tenants” and subsequently…
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Average 2-year fixed rate falls below 3% for the first time
Mortgage borrowing rates are continuing to plunge with the average cost of a two-year fixed rate deal dropping below 3 per cent, new figures show. Fierce competition between mortgage lenders is increasing the options for borrowers, as well as pushing interest rates down to record lows, with five lenders now offering fixed rate mortgages of less than 1.3 per cent, according to financial information group Moneyfacts. The average cost of a two-year fixed rate mortgage has fallen by eight basis points during March to stand at 2.98 per cent – the first time it has ever dropped below 3 per cent. Average 2-year fixed mortgage rate by max loan-to-value Date Max 60% LTV – Ave Rate Max 70% LTV – Ave Rate Max 75% LTV – Ave Rate Max 85% LTV – Ave Rate Max 95% LTV – Ave Rate Overall 2 -Yr Fixed 01-Mar-15 1.93 2.67 2.81 3.06 4.9 3.06 29-Mar-15 1.92 2.65 2.72 2.89 4.81 2.98 Change -0.01 -0.01 -0.09 -0.17 -0.09 -0.08 Source: Moneyfacts.co.uk The drop in rates is due to increased competition and falling…
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‘Retaliatory evictions’ should be reconsidered, says ARLA
The Association of Residential Landlords (ARLA) is calling on the Government to reconsider a recent amendment to the Deregulation Bill which prevents so-called retaliatory evictions after May’s General Election. The House of Lords in February approved a Government amendment to the Deregulation Bill, given Royal Assent last week, which will bring an end to so-called ‘revenge evictions’ by private sector landlords tired of moaning tenants. The new legislation will impose a ban on any landlord from serving a section 21 eviction notice on a tenant for a minimum period of six months if they make a complaint about the state of their property. But the legislation has been criticised for imposing rules that can be exploited by bad tenants. David Cox (left), Managing Director of ARLA, commented, “The provisions in the Act designed to prevent retaliatory evictions by landlords, creates a number of unintended consequences. ARLA supports the principle of legislation seeking to stop landlords from evicting tenants in response to a genuine disrepair issue. The measures will mean that protections previously afforded to compliant landlords may be eroded by dishonest tenants using the new powers to defend against legitimate possession proceedings; possibly by intentionally causing damage to properties.” The…
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Plans to allow sub-letting would be “catastrophic”
Concerns are growing over “catastrophic”plans to permit private tenants to sub-let their tenancies in England, while a Scottish housing organisation is calling on the Scottish Government to introduce a new law banning retaliatory evictions in the private rental housing sector north of the border. Following the Chancellor’s Budget last week, tenant eviction firm, Landlord Action, has expressed grave concern over Government plans to allow private tenants to sub-let their tenancies by preventing landlords from using clauses in residential tenancy agreements that expressly rule out sub-letting. “This appears to have slipped in under the radar which, if it goes ahead, will throw up a multitude of problems in the buy-to-let industry,” said Paul Shamplina (left), Founder of Landlord Action. “We have seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented,” he added. Landlord Action, which is currently exposing the level of the sub-letting problem in a Channel 5 documentary due to air in a few months, reports that it continues to experience problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting…
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