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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£30k fines for rogue landlords… says Brandon Lewis, Minister for Housing
Good news for good letting agents and landlords! Brandon Lewis, Minister for Housing and Planning, took to facebook and Twitter on Sunday 20th December, to say, “We are determined to crack down on rogue landlords and to ensure a high quality, private rented sector. Good for tenants and good for the majority of excellent landlords.” Oddly, though, the launchpad for this latest package of measures was The Sun newspaper. The Sun reported: “Landlords who let out filthy or unsafe homes will face fines of up to £30,000 under new laws to be unveiled this week. Housing Minister Brandon Lewis will announce the biggest package of measures to drive out rogue property owners and agents Council chiefs will be able to slap a new civil penalty notice on offenders to provide an instant deterrent for criminal operators. Fines will be upped for failing to take action on overcrowding, hazardous conditions, poor sanitation, electrical faults, damp and vermin infestation. Measures to be introduced in the Housing and Planning Bill will go further to ensure landlords and agents who repeatedly break the rules will be banned for at least 12 months. A database of rogue landlords and letting agents will also be available…
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Mortgage chief calls stamp duty hike ‘political stunt’
George Osborne’s decision to raise stamp duty for buy-to-let landlords has been dismissed as a “political stunt” by Managing Director of Vere Mortgages, part of deVere Group, one of the world’s largest independent financial advisory organisations. The Chancellor announced an additional 3 per cent stamp duty on second homes and buy-to-let properties in his Autumn Statement, adding thousands of pounds in tax. A property worth £275,000 will currently cost £3,750 in stamp duty but will cost £10,800 from next April when the tax rise comes into play. Buy-to-let is increasing and is currently at the highest level since before the financial crash in 2008. Rather than dampen the buy-to-let market and free up much needed properties for first-time buyers, Mike Coady (left), who heads deVere Mortgages, believes that the clampdown on buy-to-let investors will be “ineffective for its purported aims” of raising cash to help first-time buyers and paying for more affordable housing. Describing the tax measure as “something of a political stunt”, Coady thinks that the Government’s desire to be seen to be acting on this “emotive and topical issue” by appealing to the “politics of envy” with buy-to-let landlords and second homeowner the targets, will not just “trigger…
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Court delays cost landlords dear
Under-resourced county courts are still struggling to cope with the number of possession claims being put forward, resulting in costly delays for landlords and agents, according to Landlord Action. Most residential possession claims are dealt with in the county courts and enforced by county court bailiffs. But with a lack of trained staff available, the tenant eviction service claims that many county courts are now operating call centres where temporary members of staff, with little or no experience, are being appointed to process claims and correspondence, resulting in further possession delays. In a recent routine phone call to follow up a case, an operator informed Julie Herbert (left), Head of Legal at Landlord Action, that there were just six people in one call centre dealing with calls and paperwork relating to 55 different courts. “It is evident that those at the call centre are not qualified to be able to differentiate between correspondence that can sit on a file, and correspondence that needs the urgent attention of a Judge in order for a case to progress. We have had numerous incidents where court staff appear to be opening post, filing it and doing little about it, adding to the problem…
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New law for lettings agents in Wales
A new registration and licensing system for landlords and lettings agents was introduced in Wales this week, as part of the Rent Smart Wales initiative. Under the new law, which came into play on Monday, with a view to improve letting and management standards for people who rent private accommodation in Wales,landlords and agents are now required to take part in a new registration and licensing scheme, which forms a key part of The Housing (Wales) Act 2014. Landlords who need to register, and landlords and agents who need to become licensed, can now register and apply for a licence. They have 12 months from 23rdNovember 2015 in which to comply with the new legislation. During this first year there will be a focus on raising awareness of the new requirements and encouraging compliance. This new law sees Wales become the first country in the UK where managing landlords and agents are obliged to obtain a new type of licence as well as undertake training to ensure they are aware of their rights and responsibilities. The new Rent Smart Wales scheme replaces the previous voluntary Landlord Accreditation Wales initiative, which was operated by Cardiff Council on behalf of all local…
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Half of tenant subletting occurs without consent
Landlords and managing agents should regularly check their rental properties to ensure that their tenants are not subletting without consent after new research found that almost half of tenants who sublet their property do so without their landlord’s permission. The findings from the NLA found that of the 11 per cent of tenants who say they have sublet all or part of their property before, just 5 per cent did so with their landlord’s authorisation. The NLA is now urging all landlords to insert a clause into new tenancy agreements that makes clear sub-letting is only permitted with the landlord’s consent, which should not be unreasonably withheld. “This would reduce their exposure to a whole host of unnecessary risks, including hefty fines and even a prison sentence,” said Carolyn Uphill (left), Chairman of the NLA. Some 26 per cent of tenants say they have approached their landlord about sub-letting but have had the request declined, and 63 per cent say they have never asked their landlord about subletting their property. Overall, the findings show that 32 per cent of tenants have approached their landlord about sub-letting their property, with 22 per cent of requests being permitted by the landlord. “These…
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Housing ‘no place for dirty money’, says NAEA
The NAEA has joined forces with the Transparency International to oppose money-laundering in the estate agency sector. The NAEA and the anti-corruption body want to see four major changes introduced to the sales and purchase process in a bid to combat the problem. This includes ensuring that all foreign companies are transparent over their ultimate beneficial ownership of property titles in the UK, anti-money laundering checks are carried out by estate agents on the purchaser, as well as the seller of high-value property, make sure that agents adhere to anti-money laundering regulations, and that meaningful punishment and sanctions are imposed on agents who break the rules and support criminal money laundering. Following on from the Channel 4 ‘From Russia with Cash’ documentary in the summer, the NAEA’s Mark Hayward said that there is still ‘not absolute clarity’ in relation to anti-money laundering among those in the property sector, despite the very clear legislation in place and regular training and updates from within the industry. “It is now time to step up the level of scrutiny that the sector comes under to ensure that a small minority of agents do not support criminal activity and those that do are appropriately sanctioned,”…
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New measures to clamp down on rogue landlords
Fresh proposals designed to crackdown on rogue landlords who force susceptible tenants to reside in substandard, overcrowded properties, have been announced by the Housing Minister Brandon Lewis. The suggestions made by the DCLG and the Housing Minister intend to make it easier for local authorities to raise standards in houses used as shared homes by extending mandatory licensing to smaller and medium sized properties, in order to bring an end to callous landlords who exploit their tenants and charge them extortionate rents to live in cramped conditions. The existing rules apply to homes of three storeys, but it has now been suggested that the rules also apply to more shared homes, including those that are one-two storeys, as well as poorly converted blocks of flats and flats above and below shops, while Mr Lewis also wants to set a minimum size of rooms in line with existing overcrowding standards. Additionally, the Government is reviewing the information requirements when applying for a licence in order to simplify and speed up the process. The discussion paper is available to view at https://www.gov.uk/government/consultations/extending-mandatory-licensing-of-houses-in-multiple-occupation-and-related-reforms. Responses are due on 18th December 2015. The Housing Minister (left), who was a keynote speaker at The Negotiator Conference…
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Buy-to-let mortgages to be overseen by BoE
Growth in the buy-to-let sector could soon come to a very abrupt end if the Chancellor George Osborne presses ahead with plans to regulate those mortgages available to landlords. The Chancellor announced late last week during a Treasury Committee hearing that he intended to give the Bank of England (BoE) additional powers to regulate the buy-to-let mortgage market. While the stock of owner-occupier mortgage lending has risen by just 2 per cent since 2008, buy-to-let mortgage lending has increased by more than 40 per cent over the same period. But growth could come to an end after the Bank, which already has the power to regulate the wider the residential mortgage market, was also given the authority to regulate the buy-to-let sector too, should it wish to do so. BoE warned last month that Britain’s buy-to-let market poses an increasing threat to financial stability because rising property prices expose vulnerabilities that could magnify a housing market crash. The Financial Policy Committee, led by Governor Mark Carney, said landlords were more sensitive to booms and busts, often buying property when prices increase but also selling homes swiftly during a downturn. Peter Williams (left), Executive Director of the Intermediary Mortgage Lenders Association…
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Right to Rent policy to be rolled-out
The Home Office has announced plans to roll-out the Government’s Right to Rent policy across England, following a successful pilot in the West Midlands. From the start of February next year all private landlords letting property in England will be required to check the immigration status – or right-to-rent – of prospective tenants before agreeing to establish a new tenancy. Announcements concerning the implementation in Scotland, Wales and Northern Ireland are expected at a later date. Richard Lambert (left), Chief Executive Officer at the NLA, said, “This policy is causing great concern among landlords so we’re pleased that those with properties in England finally have clarity over when the scheme will be rolled out. “With just over three months to go it’s vital landlords familiarise themselves with what they will need to do to properly check their tenants in order to steer clear of breaking the law come February, especially because those who fail to do so could wind up in jail.” The Home Office’s evaluation of the scheme so far seems to show that landlords’ experience of carrying out right to rent checks is not as bad as the perception of the problems they will cause, but Daniel Watney…
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MPs and Peers to consider energy efficiency of rented housing
From 1st April 2018, all privately rented properties will be required to have a minimum energy performance rating of E on an Energy Performance Certificate. This is likely to pose significant challenges given that privately rented homes are generally older and harder to treat than properties in other tenures. The Group’s inquiry follows the Government’s decision not to renew the Landlord Energy Savings Allowance in the March Budget. This had originally been introduced to encourage landlords to improve the energy efficiency of the properties they let but was dropped because of low take up. The Government has also ended funding for the Green Deal and a decision by the European Court of Justice earlier this year ruled that the reduced five per cent rate of VAT paid on energy efficiency products can no longer be applied, apart from when used for social rented housing. The Group will consider the impact of recent policy developments on energy efficiency improvements in the private rented sector and make recommendations about what new policies could be developed to support the sector within the Government’s overall ambitions for household energy efficiency and given its efforts to ensure value for taxpayers’ money. Announcing the inquiry, the…
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