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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BBC says 76% of tenants want lettings reform
The BBC has waded into the lettings reform debate after Victoria Derbyshire’s show on BBC 2 revealed that 76% of the 1,000+ people it polled want the government to regulate how homes are let and that 74% want caps set on private rents. Those interviewed by public policy research firm ComRes during early October on the show’s behalf this year were asked whether they supported the government regulating the ‘terms of lettings’ including agency fees, the drawing up of contracts and deposits, and it is this area of reform that garnered the greatest support. But there was less backing for two other suggestions. Only 69% supported rent rises being capped at the point of renewal and just 63% liked the idea of increasing the standard minimum letting period from six to 12 months. The show interviewed several unhappy tenants including a 28-year-old who said she paid agency fees of £500 when moving into her current one-bedroom flat in London, and who has moved home eight times at a cost of £5,000 over the past decade. The BBC’s Victoria Derbyshire website also quoted Alan Ward, chairman of the Residential Landlords Association (pictured), who said rent controls would be a “disaster” and that…
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Is conveyancing reform FINALLY going to happen?
The Conveyancing Association has published a White Paper that calls for a radical shake-up of the sales process in England and Wales after revealing that most estate agents are dissatisfied with its failings. Its White Paper is the result of extensive research and consultation among estate agents, lenders, solicitors, local and national government as well as surveyors, and suggests significant changes to almost every part of the conveyancing process as well as examination of the US and Scottish conveyancing systems, which the association considers to be better than ours in many ways. This includes suggested changes to aspects of the moving process that often frustrate agents, buyers and vendors alike including the non-binding nature of offers, the difficulties of chain management, mortgage finance, money laundering, local authority data, leaseholds, property information and contract completion. But the most sweeping of the Conveyancing Association reforms is to make offers a legal commitment tempered by a five-day cooling off period either through a reservation agreement or conditional contract. Other key suggestions in the document include: 1. Drawing up a central database of authenticated solicitors and agents to prevent fraud and money laundering, and also establish a secure portal to enable conveyancers, estate agents…
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Brighton to pilot smaller To Let boards
Brighton and Hove letting agents who use To Let boards to advertise properties within the city may soon have to reduce the size of their signs and only mount them flush on property walls if plans for a voluntary scheme are voted through today. The council is considering the scheme which will operate in the largely student Lewes Road corridor area of the city and is backed by The Brighton & Hove Estate Agents Association, which says it is “supportive of better management of residential letting agents boards and will continue to work with [council] officers to this end”. Brighton and Hove’s scheme will run for a year and be voluntary, but if unsuccessful the council says it will return to the Secretary of State to ask for a Regulation 7 Direction order to enforce stricter policing of To Let boards. In 2010 the council asked for 17 zones mostly in Conservation Areas to be considered for a Regulation 7 Direction and of these 12 were allowed, two partially allowed and three turned down. If the scheme gets the go-ahead then, following several months of consultation, it is likely to start in May 2017. Documentation from council officers (pictured) suggests…
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NALS Fair Fees Forum meets to head off a ban
The Fair Fees Forum set up last month by the National Approved Letting Scheme (NALS) met yesterday for the first time to consider the contentious issue of excessive fees charged to tenants by agents. Many in the industry are hoping the consensus it will built can head off an outright ban on tenant fees by replacing it with a fees cap. It was quite a meeting of minds. Every interest group was invited including those from the lettings industry, two of the redress schemes and the Department for Communities and Local Government. Representatives from trading standards and tenant groups such as Crisis and Shelter were also at the ‘first of its kind’ gathering, which NALS hopes will lead to consensus among the different groups on a ‘fair fees charter’. Agents represented at the meeting included Belvoir, Chestertons, Foxtons, Hunters, Leaders, Northwood, Portico, Savills, Spicerhaart and Winkworth, all of whom made up an ‘agent group’ at the day’s proceedings. The Residential Landlords Association also had representatives at the meeting. The agent group agreed unanimously on the need for ‘fair, justifiable and transparent fees’ and that excessive fees should be curbed. But they also made it clear that agents should be able to…
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Online-only agent’s ‘fee saving’ claims rejected by ASA
Online-only agent Housesimple.com’s claims that it can save London vendors thousands of pounds in fees compared to a traditional agent, and that it sells property three times faster than the average have been rejected by the Advertising Standard Authority (ASA) after a complaint about one of its London Underground posters. The ruling by the ASA today means online-only agents, who often promote ‘fee saving’ as a key part of their proposition, must be more careful about the claims they make in advertisements and be more clear about the data they use to substantiate their claims. Within the lengthy Housesimple ruling published today the ASA questions whether the data was London specific enough to substantiate the company’s claim that “we potentially save our average London client £18,764 in fees”. Also, the ASA says that anyone reading the advertisement “would think that the online-only agent’s average client selling an averagely-priced home in London would be able to save that figure on fees in comparison to competing agents,” it says. The ASA questions several aspects of the data used by Housesimple to substantiate its claims. This includes using just one competitor’s fee structure – Foxtons’ – to represent the average fees charged to London…
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Rent Smart Wales: 75% of letting agents not licensed yet
Three quarters of letting agents in Wales have not signed up to register with the country’s compulsory licensing scheme for agents and landlords, even though there is just two and a half weeks to go before it starts. The warning comes from a ‘concerned’ Association of Residential Letting Agents (ARLA) as the deadline looms for agents and landlords alike. “If landlords and agents find themselves unlicensed when the deadline arrives on 23rd November they will be unable to practice, so it’s important to act soon,” says David Cox, ARLA’s managing director. After the deadline Rent Smart Wales will responsible for policing the country’s rental market through a licensing system for agents that requires them to complete training and then get approved by the scheme. Landlords must also undertake the training if they wish to self-manage their properties, or alternatively use a licensed agent if they do not want to do the training. Also, anyone renting out a property in Wales must comply with the new regulation regardless of whether they live there or not. ARLA, which runs one of the Rent Smart Wales-approved training courses via the NFoPP Residential Letting and Property Management qualification (Levels 2,3 and 4) says it reckons…
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Are Swansea and Dorset agents worst at displaying letting fees?
The Property Ombudsman Katrine Sporle has revealed that the enforcement letters sent to TPO member agents in Dorset and Swansea last week requiring them to prove they are clearly displaying fees details targeted these areas first because it had found that 50% of letting agents within them were not compliant. Her comments came during her speech at The Negotiator Conference in London earlier this week. The letter (see link below) strikes a new and relatively aggressive tone compared to previous efforts and is a taste of what’s to come for agents elsewhere in the UK. TPO says the campaign is national and that the letters are being rolled out region by region in a phased approach. The next roll-out is due to be revealed. In a nutshell, the letter requires TPO members to provide an image of their fees on display in the branch and a web link and image to demonstrate where their fees are displayed on their website. “Agents in Swansea and Dorset have until 21st November to provide evidence and any agent that fails to do so will be referred to Trading Standards,” a TPO spokesperson told The Negotiator. The campaign is being conducted in partnership with the…
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TPO to report agents who don’t display letting fees
Agents who cannot provide photographic evidence that they are displaying their letting fees both in their branch and on their company website will be referred to Trading Standards for further action by The Property Ombudsman (TPO), it has been revealed. The initiative has been launched jointly by TPO and the Chartered Trading Standards Institute (CTSI) both to improve industry compliance with the 2015 Consumer Rights Act, and also raise awareness among tenants and landlords about fees and create competition between agents. TPO members, who make up 85% of all UK letting agents, are bound to comply with its CTSI-approved lettings Code of Practice, which clearly states that agents must display their fees in accordance with the act. The joint campaign is to kick off in Dorset and Swansea before being rolled out across the UK and to enforce compliance, Property Ombudsman Katrina Sporle (pictured, above) says she will be working closely with Trading Standards Officers. Those found not to be displaying their fees can be fined up to £5,000. “Any agent that has failed to display their fees up until now must act,” says Adrian Simpson from the CTSI. “We are aware of Trading Standards Officers taking serious action against those…
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Advertising watchdog tackles three companies for misleading ads
Three different property firms including two agents and a developer have made it on to today’s Advertising Standards Authority (ASA) naughty step after complaints were made against them for publishing misleading ads. The most serious is against London-based agent Harper Brooks, whose website for a 98 unit, £18m new-homes development in Manchester called Grove House was investigated by the ASA following a complaint. Its website for the development, www.grovehousemanchester.co.uk, claimed to offer two-bedroom properties for rent from £650pcm but the complainant said no properties were available at that price, and that no “manned concierge desk” was available, as claimed. The ASA upheld the complaint but also heavily criticises Harper Brooks – which trades as Cambourne Properties Ltd – for not responding to the ASA’s enquiries quickly or adequately enough, which itself is a breach of the ASA’s code. When The Negotiator visited the website earlier today the advert had yet to be amended. The other complaints about misleading ads were less serious and were informally resolved. Hybrid agent YOPA was reported for failing to make it clear that VAT was not included within its ‘savings’ calculator, which shows potential clients how much less they might pay using YOPA compared to a traditional high street agent. YOPA…
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Has Ryanair’s legal win weakened Right to Rent?
National estate agent chain Carter Jonas says a recent landmark ruling won by budget airline Ryanair has a direct bearing on the recently-introduced Right to Rent scheme. Earlier this year Ryanair won a case against the government when the airline was fined £4,000 after it flew two Albanians into Edinburgh from Spain who were subsequently found by UK Border Agency staff to have false passports. Ryanair argued successfully that it’s not fair to fine airlines when illegal immigrants arrive at UK airports because most airline staff are not experienced enough to spot fake passports. During the appeal hearing the court heard that Ryanair has been paying out more than £400,000 a year in fines for flying illegal immigrants into UK airports. Lisa Simon, Head of Residential Lettings at Carter Jonas (pictured), says there are “clear parallels” for landlords and agents under the Right to Rent scheme, which requires those renting out property to check a potential tenant’s documentation to prove they have the right rent in the UK. Where the regulations are vague, Lisa says, is when they set out the ‘reasonable steps’ that agents should take when checking a document’s validity. “The difficulty comes in knowing what a good forgery is,” says Lisa. “But…
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