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Labour MP's Intend To Introduce Regulation To Control UK Lettings Industry

Labour MP’s Intend To Introduce Regulation To Control UK Lettings Industry

The regulation of the private rented sector (PRS) and the UK letting industry as a whole has been the subject of many tabloid newspaper headlines in recent months and now MP’s are adding their weight to the calls for further regulations.

The subject of letting agent fees is now being used by politicians to create civil unrest among tenants and their landlords, in order to bring about even more regulation.

One of the many problems faced by tenants in the PRS has been highlighted by Hilary Benn, Labour’s shadow secretary of state for Communities And Local Government (CLG), who has spoken out over the high charges placed on tenancies by letting and property managing agents and she has claimed that some agents are ‘ripping off’ landlords and tenants.

The shadow secretary of state said Labour are concerned about commission charges and fees for additional services such as Tenant Referencing, credit checking, periodic inspections and sending letters.

The data gathered by the Labour Party suggests that agents’ charges vary to a huge extent, a worrying factor when it is considered that in 2013, the number of residential properties available to be rented out privately is set to exceed social housing in the UK for the first time.

Letting agent charges for Tenant Referencing and credit checking range from £10 (GBP) to an excessive £275 (GBP), while the charge for renewing a tenancy varied from £12 (GBP) up to £220 (GBP).

“What is actually £220 of cost in terms of administration if you had just to send an email, open an envelope and stick it in a file? That seems to me to be a rip-off. It’s a problem not just for tenants but also for landlords.” Said the Labour MP.

Hilary Benn and the Labour party have promised that they will look into ways to cap charges in the Private Rental Sector (PRS) and would be a widely welcomed move by Landlords and Tenants Groups across the UK.

Ian Fletcher, Director of Policy at the British Property Federation (BPF) said: “Anyone can set themselves up as a letting agent, and then potentially abscond with hundreds of thousands of pounds of people’s cash. It is therefore counterintuitive that estate agents who handle relatively little cash are regulated, but letting agents who handle lots of cash are not.”

Labour has conceded that part of the problem lies in the fact that the levels of social housing have still not increased from when they were last in power, and as a result, more and more people are forced to turn to the private rental sector as they are unable to get on to the property ladder and into home ownership.

In the present day, the Labour Party recognises that the PRS is meeting an urgent need and will press on with finding a solution to excessive agent charges.

With only 2 weeks to go, the UK coalition Government have finally produced guidance on the changes to Energy Performance Certificates, (EPC’s) for residential properties, complete with a contradictory anomaly.

The UK Government’s department for Communities and Local Government (CLG) are now under pressure to clear this up and have indicated that they may release further guidance in certain areas.

Currently, letting and estate agents have 7 days from the commencement of marketing a property for an EPC to be obtained, followed by 21-day period of grace should it have proved impossible to obtain one.

However, the guidance then contradicts itself, by then saying that the EPC must be made available to prospective buyers and tenants when they request information, or when a viewing takes place.

The guidance underlines that the EPC must not be provided later than either of those two events.

By definition, it means that all letting and estate agents might not be able to conduct viewings on the first day of marketing – or even within the first week, or at a push, the first 28 days, whilst awaiting an EPC, if the CLG department stick to the new rule.

Nick Salmon said that the requirement to produce an EPC on a viewing sets every alarm bell ringing: “Does it means that if I take a property on the market and the EPC is ordered, that I cannot do viewings on the property unless the EPC is actually at hand? Have they just killed off first-day marketing again.”

The requirement to have an EPC ready for viewings is repeated on both pages 3 and 4 of the guidance.

On page 4, it says:

Q. When should the EPC be made available under the new regulations?


A. The EPC should be made available as early as possible and in particular, when a prospective buyer or tenant requests information in writing or views the property in question. In addition, the seller or landlord must ensure that an EPC has been given to the person who ultimately becomes the buyer or tenant.

Salmon said: “We need an urgent answer to this. Unless CLG make it clear that viewings can be made while the EPC is ordered but awaited, we are back in the dark days of their mega-stupidity with HIPs.”

The guidance, which cites an industry survey which found that 36% of estate agents believed EPCs were only needed at the point of sale as one of the reasons for introducing the changes, answers a number of outstanding issues, although it does suggest that agents needing further clarification take their own legal advice.

It makes it clear that the ultimate responsibility to make an EPC available to potential buyers and tenants rests with sellers and landlords. However, under a new duty, an agent must be satisfied that an EPC has been commissioned before marketing can start. Trading Standards officers can ask for evidence of this.

The seller, landlord or their agent must use all reasonable efforts to obtain the EPC within seven days of the start of marketing. A further 21 days is allowed if necessary. “The effect of this is to provide an absolute duty to obtain an EPC within 28 days of the property going on the market,” says the guidance.

If the property remains on the market after 28 days without an EPC, Trading Standards officers may serve a £200 (GBP) penalty notice ‘even if there is a legitimate reason for the delay’.

The guidance also defines ‘written particulars’ and what the ‘giving’ of written particulars is.

“The giving of written particulars includes making them available electronically, such as in an email or as information on a website.” In other words, agents will have to retrieve the EPC from the central Register and attach it to online written particulars.

However, newspaper adverts and estate agents’ window cards appear to be let off the hook. This also needs further clarification as the guidance actually specifies ‘lets’.

Q. Do newspaper adverts or window cards for property lets meet the definition of written particulars?

A. No. The requirement to attach a copy of the front page of the EPC to written particulars is where an agent provides written particulars to a person (i.e. a specific individual) who may be interested in buying or renting the building.

This implies that a copy of the front page of the EPC does not need to be attached to advertising material, i.e. a newspaper or window card.

The guidance also clarifies what attached means: The first page of the EPC can be incorporated into the property details, or attached.

In an apparent swipe at NFoPP and RICS, who both wanted redactions, CLG has stuck to its guns about not allowing addresses to be redacted from residential EPCs, although redactions are allowed from commercial EPCs.

It says addresses cannot be removed from domestic EPCs, “Following discussions with property agents’ representatives it was agreed there was no requirement to extend this service to domestic sales and rentals.”

One issue which is not specifically addressed in the Q & A concerns lists of available rental properties which are sent or emailed to applicants.

However, as the guidance suggests that properties listed would meet the criteria of ‘written particulars’, a list could hypothetically list 15 rental properties on an A4 sheet of paper, and then have individual EPCs attached.

The changes kick in on April 6th 2012. Any letting or estate agent who has not seen the Q & A guidance can email EPC.Enquiry@communities.gsi.gov.uk

Source: Estate Agent Today

The new version of the EPC, and the new legislation governing their use, are meant to come into force on Good Friday, 6th April 2012.
However, changes to the rules governing EPCs were supposed to be implemented in July 2011, and then in October 2011. Both dates came and went without any sign of the changes happening and with no explanation of what was going on.
Detailed guidance from the Department of Communities and Local Government, (CLG), is promised well in advance of the date, but it’s rumoured that the new version of the EPC hasn’t been approved yet!
In practical terms, this is more of a worry for lettings and estate agents than it is for the general public, who will become legally responsible for EPCs, and face censure and EVEN have to pay fines if the new rules governing their production and use are broken!
Yet they are almost completely in the dark about what’s going on!
However, the big question is will any changes make EPCs more useful?
The official government line is that anything which increases the awareness of the energy efficiency and environmental impact of a property has got to be a good idea.
But so far, there is little evidence to suggest that buyers actually care about energy efficiency very much. After all, there is a lot more to choosing a home than the cost of heating it.
Very few buyers are showing signs of rejecting properties that they like and can afford, simply because they have a “G” energy rating.
Of course, this may change as we are forced to become greener. However, that day is still a long way off.
Alan Kirkman

However, Communities and Local Government department insisted on Friday that guidance for lettings and estate agents on EPC changes has been issued.
The department denied keeping property lettings and estate agents in the dark and says it will be issuing further guidance, although it has not said when.
CLG said that guidance was issued on March 2nd 2012 .
CLG confirmed that the changes to UK EPCs will be implemented on April 6, and the new-look EPC will be released on April 1.
Regarding further guidance, CLG said: “To avoid piecemeal announcements, it is the Department’s intention to make further information available, including the Q&A guidance, with details of other changes being made to enhance and improve the energy performance of buildings regime which will also be implemented in April.”
But the claim that any guidance had been issued baffled the NAEA and ARLA, who said that they had not received anything to circulate to members, and bemused individual estate agents.
The Communities and Local Government department statement said:
“The Property Agents EPC Retrieval Service guidance issued by DCLG on 2nd March provides UK estate agents with details of the service being provided to enable them to attach a copy of the first page of the EPC to electronic on-line written particulars to ensure the most up to date EPC is always provided directly from the EPC Register. This service has been set up at the specific request of property agents. If required, a copy of the first page of the EPC can also be printed and attached in hard copy to written particulars. This guidance has been made available to key partners within the property industry for circulation to their members. However, any property agent is welcome to contact us and request a copy of the guidance. A summary sheet regarding the regulatory change is also available.”

Almost 40%, (four in ten) properties in the UK Private Rented Sector, (PRS),  have Buy-To-Let mortgages on them.

The estimate was made by Communities and Local Government (CLG) minister Andrew Stunell in response to a question from campaigning Labour MP Graham Jones asking about “The effects of buy-to-let mortgages on the size of the private rented sector”.

Stunell replied: “Based on data drawn from the English Housing Survey for 2010/11 and the latest figures from the Council of Mortgage Lenders, (CML), we estimate that buy-to-let mortgages currently support some 39% of private rented sector stock. The Government’s Housing Strategy outlines our support for a thriving private rented sector, (PRS), as well as taking a series of measures to build more affordable homes and support home ownership.”

Graham Jones has repeatedly called on the Government to tackle the problem of rogue landlords.

Mr Jones is the MP for Hyndburn in Lancashire, whose council is currently making a second attempt to regulate private landlords by introducing selective licensing.

The authority’s first attempt was blocked when a legal challenge by a collective of landlords was upheld by the courts

the number of empty UK properties still increasing

The Number of UK Empty Properties Continues To Rise

Despite campaigns from all quarters of the media and industry bodies, the number of empty homes in the UK increased significantly in 2011, new research has shown.

Data from the Communities and Local Government department, (CLG),the Office for National Statistics, (ONS), and Halifax’s own housing statistics database, the study revealed a 1.8% rise in empty residential dwellings.

According to the Halifax Empty Homes survey, which takes into account all private and public empty residential abodes, including those that have been vacant for under six months – leapt from the 650,127 recorded in April 2010 to 662,105 for the same period earlier this year.

Despite this trend, the study also revealed some more positive movement, with the amount of long-term empty private homes, those that have been without occupants for at least 6 months, dropping to the lowest levels since 2008.

These properties account for 44% of all empty residences, underlining the significance of the improvement.

It was shown that April 2011 that there were 292,313 examples of this kind of home, which represented a 1.1% decline on the 295,519 reported in the same four-week period 12 months earlier.

Stephen Noakes, Mortgage Director at Halifax,(a division of Bank of Scotland), said: “The findings show the considerable impact empty properties can have on the overall housing market, claiming it is therefore necessary for action to be taken to address the issue. Long-term empty homes account for about 1.6% of all private homes in England. And at a time when first-time buyers are still facing numerous obstacles to getting on the ladder, it is imperative we look further at the issue as an industry.”

The issue of empty homes that are fit for purpose remains a particular problem in a number of areas across the UK, where the proportion of void occupancy is double the national average. Even the UK’s Private Rented Sector is not unaffected. Landlords with properties requiring substantial improvements are lying empty due to the current lack of available finance.

UK property owners and landlords are reminded that they should have appropriate <a href=”http://www.legal4landlords.com/insurance-services/”>insurance</a>, in order to protect their property assets. However, that insurance may still be invalid if the property is unoccupied for a lengthy period of time (see the small print) and specialist insurance may be required.

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