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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Don’t let property investments go to pot
Letting agents and property managers are being reminded to remain attentive when viewing or inspecting rental properties in order to weed out tenants that may be growing cannabis in properties belong to their clients, after a new report revealed that the number of cannabis seizures in rented homes soared by up to 195 per cent in 2014. New analysis from landlord insurer, Direct Line for Business, reveals that police seized 456,911 plants across the UK last year, reflecting a sharp rise in home-based cannabis cultivation. Police raids resulted in no fewer than 59,002 plants being seized in London, which was more than any other part of the country. Birmingham had the second worst record with West Midlands police confiscating 52,218 plants, while 33,547 plants were removed from homes in Greater Manchester. Although the overall volume of seizures fell by 10 per cent between 2013 and 2014, a third of police forces have seen an increase over the year, of 40 per cent on average. West Mercia in the Midlands leads the pack with a 195 per cent increase in confiscations, followed by Cambridgeshire at 110 per cent and then Wiltshire at 75 per cent. Direct Line for Business is now…
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Stamp duty changes save homebuyers £701m
The Stamp Duty Land Tax reforms that were introduced in December last year have saved UK homeowners £701million in the six months since the changes came into force, according to myhomemove. The Government’s estimate that the changes to how stamp duty is levied has cut the tax for 98 per cent of people purchasing homes under £937,500, is supported by the research carried out by the conveyancing service provider, which found that since the reforms each house buyer below this level has saved an average of £1,400. “The stamp duty reforms have saved UK home buyers a significant amount of money since its introduction and provided an important boost to the property market, just as house transactions were starting to slow down in the run up to the General Election,” said Doug Crawford, CEO of myhomemove. He points out that the changes have had a particularly positive impact on those struggling the most to get onto the property ladder, including first-time-buyers, as they can now save more money towards a deposit for their purchase. Crawford (left) continued, “Under the old ‘slab’ system, there was a substantial increase in price at the stamp duty thresholds, which the reforms have reduced significantly,…
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Bad week for online agent
Online estate agent eMoov is under pressure for making unsubstantiated and misleading claims to home sellers over fees and asking prices, while their lodged complaint with the Competition and Markets Authority (CMA) against OnTheMarket (OTM) will not be followed up by the regulator. The CMA took over many of the functions of the Competition Commission and the Office of Fair Trading last year. Having investigated claims made by eMoov in an advert that its sales performance last year resulted in 99 per cent of the asking price being achieved for its clients compared to the national average of 96 per cent, the Advertising Standards Authority (ASA) concluded that that the statements were unsubstantiated. ASA said that sales data only covered the period of January to September 2014, while no comparable information relating to asking prices achieved by traditional estate agents in London was provided. The online estate agent also claimed that its customers had saved more than £11 million in fees by using its services because its business model depended on it selling a higher proportion of its inventory. But once again, this was panned by the ASA because it was based on the average fee its customers paid instead…
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Zoopla share prices dip after Ofgem probe
Shares in The Zoopla Property Group (ZPG), which recently acquired energy provider comparison site uSwitch, dropped by 15.9p to 258.7p at the tail end of last week, following an Ofgem investigation into whether two or more companies providing a supporting service for the energy industry breached competition law. Following shareholder and FCA approval, ZPG last week completed its acquisition of uSwitch, the comparison website and lead generation engine for energy and communications switching. But while ZPG said that the deal was designed to reaffirmthe company’s mission to be the most useful resource for consumers and most effective marketing partner for professionals operating within the property industry, the acquisition may actually prove to have been badly timed. The concern for ZPG is that uSwitch, along with MoneySupermarket, has been asked by Ofgem to provide information in relation to an investigation over whether companies supporting the energy industry have broken any rules. Despite the pending investigation, the enlarged ZPG group is now working on developing products which will directly benefit ZPG members by allowing them to source the best gas, electricity, broadband, TV and phone deals in the market and earn fees whilst saving money for their clients. The aim is that…
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Help for letting agents to stay on top of immigration checks
Letting industry suppliers are already adjusting to the national rollout of immigration checks, announced in last week’s Queen’s Speech, to ensure that letting agents comply fully with the new measures. Let Alliance, a specialist tenancy reference and rent guarantee provider to the UK letting agency sector, has announced that it will be extending its Ultimate Global tenancy referencing service nationwide, following the Government’s decision to press ahead with a national rollout of immigration checks. The Ultimate Global tenancy reference takes full account of the Immigration Act, and includes Right to Rent certification; ID validation; follow-up checks for time-limited certification; Home Office checks; and residency confirmation – all done on a documented audit trail. The service was successfully trialled in the West Midlands, which is where the pilot scheme of immigration checks by landlords and agents was introducedlast December, but will soon be accessible by agents across the UK. Importantly, Let Alliance will “take full accountability” for the full referencing process, protecting all their customers against any penalty that may be applied by the Home Office if the tenant has completed the ‘Ultimate Global’ referencing process and met their criteria, according to Andy Halstead (left), CEO of Let Alliance. He said,…
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Town planning expert slams Right to Buy scheme
Giving housing association tenants the right to purchase their homes will do nothing to solve the UK housing crisis but instead is aimed at targeting new Tory voters, a Birmingham City University expert has warned. Alister Scott, Professor of Environment and Spatial Planning at Birmingham City University, describe the Government’s plans to extend Right to Buy discounts to 1.3 million housing associations as a “double whammy and bad news for the provision of social housing”. The Government announced new measures in the Queen’s Speech to Parliament last week, giving tenants the Right to Buy their homes while requiring councils to sell off high-value properties and invest the proceeds into building affordable ones. But Professor Scott pointed out that history has shown that the replacements of new homes will not keep up with the losses of housing associations stock and high price stock of council housing, and that the spatial impact of where these properties are lost will be significant and will worsen the housing waiting lists. Professor Scott (right) also highlighted other Government initiatives that seem destined to fail. He commented, “David Cameron’s recent pre-election pledge for 200,000 new discounted houses is what I would call a ‘Ryanair approach to…
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New protection for tenants and landlords
Letting agents are now required to publish full details of the fees they charge. In addition, agents are also obliged to state whether or not they are a member of a client protection scheme and which redress scheme they are signed up to. The new legislation contained within the Consumer Rights Act 2015 came into force last week and is designed to ensure a fair deal for landlords and tenants, closing off the opportunity for a small minority of rogue agents to impose unreasonable, hidden charges. All letting agents are now required to publish a full tariff of their fees – both on their websites and prominently in their offices. Anyone who does not comply with these new rules will face a major fine. David Cox (left), Managing Director, Association of Residential Letting Agents, said, “Relevant information should be placed prominently in offices where letting agents have face to face contact with clients, as well as on their websites. Any costs to landlords and tenants must be clearly defined and comprehensively outlined, including all fees, charges and penalties that may be charged before, during and after a tenancy.” Meanwhile, more than 3,000 professional lettings agent across the UK have joined…
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NLA slams CAB report
A new report which claims that landlords earn in the region of £5.6 billion a year from unsafe homes which fail to meet legal standards has been slammed by the National Landlords Association (NLA). The Citizens Advice study report, A Nation of Renters, says 740,000 households in England now reside in privately rented homes which present a severe threat to tenants’ health from problems like rat infestations and damp. Gillian Guy, Chief executive of Citizens Advice, said, “Rogue landlords are putting profits before safety.” The Government is planning to give councils new powers to tackle unscrupulous landlords which own homes with a category 1 hazard, as part of number of proposals to be tabled in a new Immigration Bill. The details of the Bill, which will be a central part of the new Government programme will be announced in the Queen’s speech this week. “The Government has rightly said it wants to tackle the country’s housing crisis – it must make targeting dodgy landlords, giving tenants better rights and driving up standards a major part of that effort,” Guy added. But while recognising that bad practice does exist in private housing, “and that it needs to be stamped out”, Richard…
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Labour appoints new Shadow Housing Minister
Roberta Blackman-Woods (right), the MP for the City of Durham, has been named as the new Shadow Housing Minister, the Labour Party has confirmed. Professor Blackman-Woods, a sociologist with expertise in housing, is originally from Northern Ireland and pursued a career in academia before becoming an MP in 2005. The Durham MP has replaced Emma Reynolds (left), who was promoted to Shadow Communities Secretary in last week’s reshuffle following the result of the General Election, and becomes the fourth Labour politician to hold the post in the past five years. She will be responsible for both housing and planning, which Labour had previously divided. Her last role in Parliament was as Shadow Planning Minister. The new Shadow Housing Minister will now have to take a long hard look at Labour’s recent housing policies, including proposals to introduce a mansion tax, cap rents, ban letting agent fees,make three year tenancies the norm and restrict tax reliefs for landlords who do not keep properties to basic standards. She will also decide which policies to keep and which were ill-thought-out and, possibly,contributed towards Labour losing the recent General Election. Only then can she begin to challenge the Conservative Party and Brandon Lewis (right),…
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Regulation of the letting agents needed, says CEO
The newly elected Conservative Government should make the regulation of letting agents a priority in a bid to deal with unscrupulous letting agencies and help improve standards in the industry, according to Leaders’ Chief Executive, Paul Weller. Mr Weller (left) believes that millions of landlords and tenants in the private rented sector (PRS) would prosper from the formal regulation of letting agents. He said, “More people and families than ever before now use the PRS and the services of letting agents. Yet the vast majority are unaware that letting agents are not regulated by the Government and that anyone can set up a letting agency, with no experience, knowledge of lettings law or client money protection in place. “Letting agents can hold hundreds of thousands of pounds in rent which they are supposed to protect. But without regulation, there is no way to enforce this and there have been countless cases of letting firms losing their clients’ money, using it for their own ends, or completely disappearing with it, leaving landlords and tenants badly out of pocket. Too many people have suffered at the hands of agents like this, as well as incompetent and unscrupulous agents who fail to provide…
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