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Government End Outdated Law To Allow Short Term Letting In London

Government End Outdated Law To Allow Short Term Letting In London

New Measures Allow Londoners To Conduct Short Term Letting
Of Homes For Extra Cash

The UK Government have announced that they are set to introduce new measures that will bring to an end outdated rules from the 1970’s that prevented home owners in London from renting out their properties on a short-term basis to visitors.

Communities and Local Government (CLG), Secretary Eric Pickles said that there were almost 5 million overseas visitors to the capital between July and September 2013, and thousands of properties were advertised as being available as holiday lets on travel accommodation websites such as Airbnb.

However, under laws dating back to the 1970’s, Londoners who want to rent out their properties for less than 3 months, technically still have to apply for planning permission from the council, which does not apply anywhere else in the UK.

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Will Landlords Be Safe Under New Rental Rules?

Will Landlords Be Safe Under New Rental Rules?

Tenants Charter could put tenants in a

stronger position over PRS landlords

Regulations which hand private rented sector tenants more power and rights to request longer leases have been greeted with cautious optimism, although the new code of practice, intended for launch by the Government, would bring in much-needed protection for many tenants from rogue and inexperienced landlords.

The proposed Tenants’ Charter, could mean honest and hard working landlords are at a disadvantage and could be put off from renting out properties.

The results of the introduction, could lead to another shortage of available rental stock for the UK property market leading to rent increases and landlords becoming trapped by more stringent legal binding agreements.

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Compulsory Redress Schemes For Lettings And Property Managing Agents New Government Measures Intend

To Regulate Private Rented Sector

The Government has announced that there are to be new regulations introduced in 2014 to provide private rented sector landlords, tenants and leaseholders with additional protection when working with lettings agents or property managing agents.

The Department for Communities and Local Government (CLG) want the introduction of compulsory redress schemes for lettings and property managing agents will ensure that they can be fully investigated where information is not made clear on additional charges, administration fees or any other property or tenant related issue. The proposed measures are intended to provide a cheaper, easier way for landlords, tenants and leaseholders to pursue compensation from lettings and property managing agents if they have a complaint.

The conditions that have to be met by lettings and property managing agents to be a part of a redress scheme have now been published by the Government.

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Tenants Charter Proposals For Longer Tenancies Breach Mortgage Lenders Current Buy-To-Let Mortgage Terms

Tenants Charter Proposals For Longer Tenancies Breach Mortgage Lenders Current Buy-To-Let Mortgage Terms

Industry welcome to weak tenants’ charter that could see UK PRS landlords at odds with

Buy-To-Let Mortgage Lenders

The new tenants’ charter was announced by the Secretary of State for Communities and Local Government (CLG), Eric Pickles, last Wednesday, allowing tenants to ask for longer tenancies and better transparency of letting agents’ fees.

The new tenants’ charter will also aim to force all lettings and property managing agents controlling PRS rental properties to join a compulsory redress scheme.

The Tenants’ Charter, published for consultation, outlines what tenants should be looking out for at every stage when renting a property in the UK’s private rented sector, including lettings agents having to inform customers what all their fees are upfront, before they have committed to anything, including visiting a property.

However, the introduction of these terms under the banner of the tenants’ charter could threaten the business future of large numbers of landlords who would technically be in breach of the strict buy-to-let mortgage terms imposed by many mortgage lenders, which generally stipulate that tenancy agreements are to be for a period of no more than one year.

Secretary Of State For Communities & Local Government, Eric Pickles

Secretary Of State For Communities & Local Government, Eric Pickles

Mr Pickles stated that the Government intend to publish a code of practice setting standards for the management of property in the private rental sector (PRS) along with guidance setting out the role of public bodies in protecting tenants from illegal eviction.

Mr Pickles said: “This government is on the side of hardworking people and the last thing we want to do is hurt tenants and kill (property) investment by increasing costs and strangling the sector with red tape. But tenants deserve better value for money, and dodgy landlords should be under no illusion they can provide a shoddy service with impunity. These proposals will raise the quality and choice of rental accommodation, root out the cowboys and rogue operators in the sector, and give tenants the confidence to request longer fixed-term, family-friendly tenancies that meet their needs”

Mr Pickles also said that the Government will develop a model tenancy agreement which will clearly set out the rights and responsibilities of tenants and landlords, and ensure families can benefit from longer tenancies, without changing the existing legal framework for the rental market. He said “Longer tenancies will give families greater certainty and security, especially for those with children at school, and reduce costs for both tenants and landlords who will not have to pay letting agents to arrange frequent contract renewals.”

Clive Betts MP, Chair of the Communities and Local Government Committee said: “I am pleased that the Government has embraced many of the recommendations in our private rented sector report. The proposals for a tenants’ charter and model tenancy agreements reflect our calls for greater awareness of rights and responsibilities. Far too often the security needed by families is not being provided by the private rented sector. I am pleased, therefore, that the Government has listened to what the Committee said about the need for more family friendly tenancies. It is also welcome that the Government is taking forward our proposal to allow rent and housing benefit to be clawed back when landlords have been convicted of letting out dangerous property. The Committee will be watching closely to ensure that they are translated into action. We will also press to ensure that the Government’s gathering of information on selective licensing leads to action to raise standards. Much remains to be done if renting is to become an attractive alternative to owner occupation. It is disappointing; therefore, that the Government does not see fit to crack down on cowboy letting agents and their rip off fees and charges. It is also regrettable that the Government has declined to give local authorities the powers and freedom they need to improve housing in their areas.”

Tenants Charter Proposals For Longer Tenancies Breach Mortgage Lenders Current
Buy-To-Let Mortgage Terms

Property professionals generally agree with the introduction of the new tenants’ charter but many think that the Government have sidestepped the opportunity to enforce much tighter regulation of landlords in the private rental sector and lettings and property managing agents in particular and many feel that the new measures fall short of what is really needed.

It will be interesting to see if the Government put pressure on the banks and mainstream mortgage lenders to abolish or ignore such limiting clauses, allowing them to deliver on the real aim of the tenants’ charter.

Caroline Kenny, an executive of the UK Association of Letting Agents (UKALA) wants the Government to build on the experience and expertise of those industry bodies which already require higher standards of their members. Commenting “Responsible agents who choose to belong to professional bodies which require client money protection insurance, impartial redress and an adherence to a strict Code of Practice are forced to compete with those who show little regard to professional standards or the needs of their clients. UKLA believe that this package of proposals represents a missed opportunity for the Government to make mandatory the kind of comprehensive protection offered by the UK Association of Letting Agents and other industry regulatory bodies, which are called UKALA & NLAfor by those working in the property industry and needed by hardworking consumers who are unable to differentiate between good and bad letting agents.”

Richard Lambert, Chief Executive of the National Landlords Association (NLA), said: “The NLA has long argued that private renting can be far more flexible than commonly perceived, and we need to tap into this potential to meet the changing needs and expectations of those who rent. We look forward to working with government to make a success of these proposals. However, we believe that the Government has missed an opportunity to require greater professionalism of letting agents. While the requirement to belong to an approved redress scheme is a step in the right direction, it does little to protect the financial interest of landlords and tenants working with unregulated agents.”

Residential Landlords Association

Join The Residential Landlords Association

Alan Ward, Chairman of the Residential Landlords Association (RLA) welcomed the Government action to improve tenants’ understanding of their rights and responsibilities saying: “Tenants take more trouble buying a second-hand car than renting a house” Ensuring that tenants and landlords each understand clearly their rights and obligations to one another ensures a balanced relationship and enables them to hold each other to account based on the large number of laws already in existence. It will also play a vital role in rooting out those willfully criminal landlords who reap misery on tenants. We look forward to working with Ministers on the Charter as well as on how to best get this information to tenants.”

RICSPeter Bolton King, RICS global residential director, said “The long overdue announcement was definitely a step in the right direction. The lettings sector has for far too long been the Wild West of the property industry, with many tenants having absolutely nowhere to go should they wish to complain about shoddy service. The introduction of a code of practice specifically covering those managing rented property should certainly improve standards.”

Chief Executive of the Housing & Homelessness charity Shelter, Campbell Robb said “This announcement is recognition that current private renting arrangements are not fit for families with children, who need greater long-term stability. This is a welcome step in the right direction, and ministers now need to consider how to make longer tenancies a real choice for the families desperate for a more stable place to live.”

The announcement of the new Tenants’ Charter was good news for consumer champions, Which? Who have been campaigning since 2007 when they first called for an amendment to the Consumers, Estate Agents and Redress Act 2007 requiring letting agents to join an approved complaints scheme, just as property sales agents are. The consumer groups investigations also discovered earlier this year that major letting agents are acting unlawfully by not being upfront about the fees charged to clients.

The Enterprise and Regulatory Reform Act 2013, looks set to be implemented in Spring 2014, giving all landlords and tenants access to a complaints scheme. This will mean that 40% of agents who currently aren’t signed up to a redress scheme will have to become members

Which? Executive Director, Richard Lloyd, said: “Renting is now the only housing option for millions so we’re pleased to see the Government taking steps to address problems in the lettings market. Making charges clear upfront will enable people to shop around more easily, and longer tenancies could mark the end of unnecessary renewal fees. The new legislation giving landlords and tenants access to a complaints scheme now needs to be brought in as soon as possible and there must be strong action taken against any agent in breach of the scheme.”

  • Do you think the proposals go far enough?

Take our Poll on the Tenants Charter or leave a comment below!

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New Affordable Housing Guarantees Funding Is Intended To Deliver

New Affordable Housing Guarantees Funding Is Intended To Deliver
Thousands Of Affordable Properties

New Affordable Housing Guarantee Funding Is Intended To Deliver Thousands
Of Affordable Properties

On the 24th July 2013, Government ministers announced a multi-million pound boost to build thousands of new and affordable residential properties in the UK.

69 different housing associations and developers will each receive a share of £220 million (GBP) to deliver almost 14,000 new and affordable residential properties outside of the London area.

Work on the new residential properties will be started by March 2015 and will be expected to be completed by 2017.

The move is part of wider government efforts to get Britain building, which will lead to the fastest annual rate of affordable house building for over 2 decades.

The increased funding is part of the expanded £450 million (GBP) Affordable Housing Guarantees which will support up to £3.5 Billion (GBP) in government debt guarantees to deliver thousands of new homes.

Of the almost 14,000 homes this money will help deliver, the majority will be available at an affordable rent with 2,000 of those available to buy through shared ownership.

Housing associations and developers who plan to use the guarantee scheme will now work with the Affordable Housing Finance to finalise the details of the loan funding that will work alongside today’s grant allocations.

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Uncertainty Remains Over Recovery Of Universal Credit Rent Arrears

Uncertainty Remains Over Recovery Of Universal Credit Rent Arrears

The UK Government are to introduce a mechanism to automatically recover rent arrears, alongside the direct payment of housing benefit to tenants.

Details released last week by the government explained that under the welfare reforms landlords will now be able to contact the Department for Work and Pensions (DWP) to request Universal Credit benefits designed to cover housing costs of tenants are paid to them once a prescribed level of rent arrears have been reached.

At this point the DWP will recover the arrears by docking universal credit payments to tenants.

In its response to a Communities and Local Government (CLG) select committee report on the implementation of universal credit, the government says deductions can be up to 5% under existing legislation, but the government are considering whether this level of deduction is appropriate for tenants claiming universal credit, or if it should be increased in the future.

Under the new universal credit scheme, which is being rolled out nationally in the UK from autumn 2013, a range of benefits, including Housing Benefit (HB) or Local Housing Allowance (LHA), will be combined into a single monthly payment termed “Universal Credit”.

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Government Set To Backtrack On Landlords Conducting Immigration Checks

Government Set To Backtrack On Landlords Conducting Immigration Checks

Bill forcing landlords to check Immigration status of tenants
will be watered down

As previously reported on Spotlight the Government proposals for landlords to check the immigration status of all tenants, has already caused a great deal of outrage from all sectors.

http://mypropertypowerteam.com/landlords-expected-to-do-uk-border-agencys-job-for-them/
http://mypropertypowerteam.com/even-mps-think-landlord-immigration-checks-are-unworkable/

Government ministers look likely to perform the expected U-turn and backtrack on the proposal that would require landlords to verify the immigration status of their tenants.

Prime Minister, David Cameron is reported to have been livid when he was told that the proposed new legislation would have to be watered down.

According to a report in the Daily Telegraph, the legislation that is set to become part of a the new Immigration Bill, will not be rolled out nationally, instead, only landlords in certain parts of the UK will be forced to carry out immigration checks and the newspaper named some boroughs in West London would where landlords would be at the forefront of policing the immigration requirements.

Communities and Local Government (CLG) secretary, Eric Pickles, is reported to think that a mandatory requirement for all UK landlords would involve a great deal of additional red tape, and the resulting extra costs would end up being paid for by tenants.

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Government Funding To Boost Shared Tenancies For Homeless

Government Funding To Boost Shared Tenancies For Homeless

£1 million Government funding boosts rental options for single homeless people

This week, Communities Minister Don Foster announced a cash boost of up to £1 Million (GBP) to support single homeless people providing access to shared tenancies within the UK private rental sector.

The funding is intended to help homeless people to find a safe and secure home in shared accommodation or Houses of Multiple Occupation (HMO’s) in private rented sector (PRS) properties.

Mr Foster allocated up to £800,000 (GBP) for homelessness charity Crisis to fund schemes to set up new shared tenancies for single homeless people within the UK’s private rented sector.

The minister also announced a further £230,000 (GBP) for the charity to continue its Private Rented Sector Access Programme, which works with local landlords to help vulnerable people find the homes they need in privately rented accommodation.

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UK Housing Minister Promises No Property Purchasing Reforms

UK Housing Minister Promises No Property Purchasing Reforms

UK housing minister Mark Prisk has stated that the Government has no plan to reform the property buying process in England and Wales.

Answering a question from Welsh Tory MP Alun Cairns in the House of Commons, Mr Prisk, a former chartered surveyor, dismissed any idea that he considered the Scottish system superior.

Mr Cairns asked the Secretary of State for Communities and Local Government (CLG) what consideration the department had given to reforming the residential property purchase system; and what assessment had been made of the same process in Scotland.

Mr Prisk replied that there were no current plans to change the current residential property buying and selling system in England and Wales, where properties are sold ‘subject to contract’.

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Welfare Reforms Could Increase Fraud

Welfare Reforms Could Increase Fraud

The Government’s controversial welfare reforms will leave the benefits system more vulnerable to fraud, according to a group of MPs.

The Government decision to press on with welfare reforms means that Universal credit is set to be implemented nationally from October 2013 and replaces a string of existing benefits such as local housing allowance (LHA), housing benefit (HB) and child tax credits.

Changes to IT system for universal credit could make it harder to distinguish fraudulent claims from those that are genuine, and there are calls for the government to give swift assurance that the introduction of Universal Credit will not cause a rise in benefit fraud,

MPs issued the warning after a report by the Communities and Local Government (CLG) Committee into the extent of the welfare reforms highlighted several concerns about the new Universal Credit scheme.

The first trial of the new system begins on 29 April 2013 in Ashton-Under-Lyne, Greater Manchester.

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