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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Housing industry welcome Chancellor’s boost for homebuyers
First-time property purchasers saving for a deposit will be given a 25 per cent financial top up from the Government, George Osborne (right) announced in last week’s Budget statement, much to the delight of many property professionals. Many industry experts are pleased that the Chancellor has recognised the need to provide yet more support for homebuyers by announcing the launch of a Help to Buy ISA later this year. Whilst the operational details still need to be finalised, in principle the scheme will provide an important financial incentive for first-time buyers, helping many people achieve the goal of owning their own home. “Combined with the extension of Help to Buy and measures introduced in the Autumn statement to reform Stamp Duty Land Tax with a fairer system, this should provide further positive stimulus for the wider housing market,” said Chris Endsor, Chief Executive of Miller Homes. Nicholas Leeming (left), Chairman of Jackson-Stops & Staff, with 44 offices nationwide, also welcomed the announcement of a new Help to Buy ISA in last week’s Budget. He commented, “Any help to incentivise the young to save money and enable them to get on the property ladder has to be welcomed. We look forward…
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Property Redress Scheme attracts 3,000 members
More than 3,000 individual residential property agents and professionals are now signed up to the Property Redress Scheme (PRS), new figures show. The new consumer redress scheme for the property industry, authorised by the Department of Communities and Local Government (DCLG) and the National Trading Standards Estate Agency Team, aims to provide fair and reasonable resolutions to disputes between property agents and their consumers. It became a legal requirement for all property agents, as defined by legislation, to join a consumer redress scheme on the 1st October 2014. The PRS began trading in the summer of 2014 and was authorised and set up as an alternative to the two other schemes, the Ombudsman Service: Property and The Property Ombudsman, which were already in operation. The PRS claims that prior to 1st October 2014 deadline, there were an estimated 3,000 to 4,000 letting agents that would be required to comply with the new legislation, indicating that many of these previously unregistered agents have chosen to join the PRS. The PRS also claims that its scheme is also seeing an increase in the volume of agents switching from the other schemes now that awareness is spreading that there is another option available…
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Government makes it harder to license landlords
Reforms to the Selective Licensing scheme, announced last week by Brandon Lewis (left), the Minister of State for Housing and Planning, will further restrict local decision making powers making it harder for councils to license landlords. Since 2010, local councils have had the power to licence landlords across an entire borough or jurisdiction in order to combat issues such as anti-social behaviour in so-called ‘hotspot areas’. However, the changes, which come into force on 1 April 2015, will mean that councils will require Government approval before implementing a licensing scheme if they plan to license a large area or proportion of the market – likely to be above 20 per cent of either the geographical area covered by the council or the local private rented sector (PRS). The decision appears to have been influenced by sustained lobbying efforts by various organisations, including the National Landlord Association (NLA), which published its report on the state of landlord licensing across the country in February. The report points to a boom in the number of blanket licensing schemes since 2010 but highlights a lack of enforcement actions being taken by local councils. It also shows a correlation between the political control of a…
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COMMENT
This year a bright and harsh light has been shone onto the letting industry. Agents now face compulsory redress scheme registration and there’s a voluntary code for property management. And model tenancies are in the pipeline too. These all pale into insignificance compared to lettings fees. Agents, of course, have been charging registration and application fees for decades and most feel that they are a legitimate charge for the paperwork, reference checks and deposit chasing that tenancies require. But in recent months a well co-ordinated campaign to abolish these fees has been underway, led by housing charity Shelter, which has persuaded Labour to pledge to abolish lettings fees for tenants in the private rented sector if it forms a government after the next election. Unless the industry comes up with a solution the criticism will not go away.” It is not difficult to see why Ed Milliband wants to join in. Campaign organisations such as Generation Rent have painted a national picture of low paid tenants, high rents and young tenants being ‘ripped off’ by landlords and agents – all natural territory for Labour. The response of the industry thus far has been defence and it’s been a successful tactic…
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Majority of buyers benefit from progressive stamp duty
Some 71 per cent of homebuyers in England and Wales will benefit from changes to the Stamp Duty Land Tax (SDLT) announced in the Autumn Statement, according to Nationwide. Nationwide said that 86 per cent of purchases in London and the South East would profit from the Government’s decision to abolish the slab structure on Stamp Duty tax. Homebuyers in London are set to be the biggest beneficiary of the change due to the fact that home prices are generally higher and thus a higher proportion of transactions are liable for stamp duty. Overall, it is estimated that 98 per cent of buyers will pay the same or less tax under the new system in which purchasers pay the marginal tax rate on the relevant elements of the purchase price. According to 2013/14 data from the Land Registry, homebuyers in England and Wales would save an average of £1,600. In fact, according to the latest H M Revenue & Customs Tax Receipts statistics released in recent days, the Chancellor’s reform of the SDLT regime is already having an impact on tax receipts. The figures show that following the changes, SDLT receipts in January 2015 were down £299 million month-on-month, and…
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End of revenge evictions
The House of Lords late last week approved a Government amendment to the Deregulation Bill 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. The legislation has been criticised for imposing rules that can be exploited by bad tenants. But the decision to approve the new regulation targeted at tackling the problem of retaliatory eviction has been slammed by the CLA, which represents landowners, farmers and other rural businesses, for being rushed through Parliament. CLA President Henry Robinson (left) said, “We support action to prevent retaliatory evictions but this law will not stop bad landlords evicting tenants. It is much more likely to give tenants that are damaging the property or not paying their rent scope to delay eviction. As a result it will cause significant uncertainty for thousands of responsible landlords throughout rural communities. “This is the definition of bad policy making. It imposes a poorly designed, burdensome new regulation as part of…
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Get with the programme, say tenants
Half of tenants believe the tenancy application process is slow and outdated, according to market research company, Populus, who conducted a survey on behalf of tenancy software specialist OnBoard Pro. 1,000 Private Rental Sector tenants were questioned to give an independent analysis of the technology used in the lettings market. The results raised some thought-provoking points about current technology and how improvement could mean a better experience for tenants and more efficient processes for landlords and agents. The technology used varies but paperwork and manual processes occupy a huge amount of employees’ time. 52 per cent of tenants agreed that tenancy applications are reliant on outdated technology and feel that the efficiency of the application processes are not adding value or positivity to their customer experience. The survey also highlighted that an overwhelming majority of tenants would like to be able to pre-complete applications before meeting an agent and are keen to migrate from paper forms to apply from home. Tenants prepared to pre-apply and tee-up their referees in this way can reduce the agent’s workload and put themselves in a better position to secure their property of choice. Whilst increased regulation has been proposed, the tenancy 61 per cent…
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Are your HMO landlords licensed?
Many landlords operating Houses in Multiple Occupation (HMOs) properties are doing so without the correct licence in place, risking heavy fines, as well as potentially putting their tenants’ safety at risk, warns Rentguard Insurance. When a landlord recently received a huge fine for various breaches, including £3,000 in relation to violations of HMO regulations such as fire safety and being unlicensed, it added to a spate of cases highlighting the fact that many landlords are operating HMO properties without the correct licence in place. In another case, a Hounslow landlord who let out an overcrowded and rat-infested unlicensed HMO was recently ordered in court to pay nearly £40,000 in fines and legal costs. A total of 16 people were found crammed into the house and outbuildings, they included a family with a six-month-old baby living in a garden shed. Elsewhere, two west London landlords were ordered to pay a total of more than £50,000 for failing to register their property as an HMO and for breaching fire safety regulations after a fatal fire at their property in July last year. The landlords were prosecuted by Hounslow Council, which said that had the property been licensed as an HMO it would…
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Scottish Government revises property tax after UK stamp duty changes
Deputy First Minister John Swinney has announced a series of changes to the Land and Buildings Transaction Tax (LBTT) – which will replace stamp duty for homebuyers in Scotland – following Chancellor George Osborne’s amends to stamp duty in his Autumn Statement in December. Among the headline amendments, is the fact that homes in Scotland worth up to £145,000 will not now attract any tax, up from the previously proposed £135,000. For sales between £145,000 and £250,000, a tax rate of 2 per cent will be applied, with the introduction of a new rate of 5 per cent between £250,000 and £325,000. Mr Swinney had previously planned a tax rate of 10 per cent on residential properties sold for between £250,000 and £1 million – prompting concerns that those acquiring family homes could be hit. However, the 10 per cent rate will be applied to properties valued between £325,000 and £750,000. The top rate of 12 per cent – which was previously going to apply to residential properties worth in excess of £1 million – will now take effect from £750,000. The Deputy First Minister defended the Scottish national Party’s (SNP) decision to change the taxes following the Chancellor’s surprise…
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Labour’s proposed mansion tax under attack again
Ed Balls, the Shadow Chancellor, has been forced to defend Labour’s plans for a mansion tax on homes worth more than £2 million after it was described as “crude” by Lord Mandelson (left) who insisted last week that he did not like the idea of “clobbering people” with the levy. In offering his thoughts on the planned mansion tax, Lord Mandelson told the BBC’s Newsnight that, “I think it’s crude, I think it’s short-termist.” He went on to declare his support for the Liberal Democrat idea of adding new higher council tax bands. The Lib Dems, who originally called for a mansion tax on £1 million-plus homes prior to the 2010 General Election, have since refined their plans and are now calling for a review of the council tax bands in place since the early 1990s, with new bands above £2 million introduced. However, Shadow chancellor Ed Balls (left) has defended Labour’s planned mansion tax and insisted that a levy on properties worth £2 million-plus, which his party insists will be spent on the NHS, would be introduced in a “careful, consulted way.” He told BBC Radio 4’s The World at One: “I promise you that it [a mansion tax]…
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