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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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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Anti-money laundering rule change needed to help London agents
Central London based Sandfords has accused the Government and HMRC of a lack of understanding about the way in which the London housing market works and has called for a major overhaul in existing anti-money laundering legislation to help support London agents in their everyday business. Andrew Ellinas (left), Director at Sandfords, is urging the National Association of Estate Agents (NAEA) to lobby the Government to change the rules on sub-agent due diligence, thereby making it easier for agents in London to “carry out their daily working routine”. HMRC took over supervision of the estate agency business last year and has since published guidance on how to stay on the right side of money laundering regulations. But Ellinas believes that the existing rules work against agents in London and therefore need amending. He said, “The current legislation doesn’t allow for agents in London to carry out their daily working routine and the NAEA need to speak up and apply pressure on the Government before agents are heavily penalised for simply doing their job.” The Director of Sandfords insists that agents understand what is required of them, but says that there is an issue when it comes to sub-agent due diligence,…
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Trading Standards warning over silent killer
The Trading Standards Service has issued a warning to consumers after independent tests on CO alarms found that eight out of 10 failed British Standards tests. The warning comes as new Smoke and Carbon Monoxide legislation comes in to force demanding that all private sector landlords regularly test smoke and CO alarms in all rented properties. The new legislation, that comes in to force on 1st October 2015, is expected to prevent up to 26 deaths and 670 injuries a year. Trading Standards is advising consumers to check their appliances are in proper working order and to test their CO alarms in order to alert them to the ‘silent and invisible killer’ after tests showed many devices were faulty. John Stones, Managing Director of Gas Safe Europe, comments: “Carbon Monoxide is a silent killer and yet one that is easy to protect against. Consumers should fit alarms and regularly test them to ensure they’re in working order and fit for purpose.” CO alarms are sold to alert consumers to rising and deadly CO levels, yet when Trading Standards sent 10 types of alarm for testing to the British Standard, eight of which failed in one way or another. The tests…
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New smoke alarm laws passed
The Smoke and Carbon Monoxide Alarm (England) Regulations have finally been passed in Parliament, giving Landlords and Managing Agents until 1st October 2015 to comply. Following final scrutiny of the measures in the House of Lords last week, landlords and Managing Agents now have less than two weeks to ensure that all tenancies have a smoke alarm fitted on every floor of their property where there is a room used wholly or partly as living accommodation. They will also be required to put a carbon monoxide alarm in any room where a solid fuel is burnt. Failure to do so could result in a fine of up to £5,000. Baroness Williams of Trafford, the Communities and Local Government Minister, insisted that the aim of the regulations are to “save lives and not catch landlords out.” But while many professionals in the housing sector have welcomed the aims of the regulations, there are concerns that the Government has ignored calls from across the Private Rented Sector (PRS) to reconsider the timeframe for its implementation. David Cox (left), Managing Director of the Association of Residential Letting Agents (ARLA), commented, “Whilst these measures are entirely sensible, ARLA is concerned that landlords will not…
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