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Scotland Leads Way On PRS Regulation

Scotland Leads Way On PRS Regulation

Better Regulation Of Scottish Private rented Sector On Way

As we reported on Wednesday, the Scottish government reviewed its strategy on PRS regulation on the 30th May and more new legislation will definitely be on the way, however, landlords and letting agents will be an important part of the consultation

The Scottish Government said that it “does not have a monopoly on good ideas. In order to deliver on the vision for the sector, we will engage with all of our partners on their innovative ideas.”

The Scottish Government PRS regulation strategy intends to improve the quality of the private rented sector in Scotland, including redefining the landlord registration scheme in order to target the worst offenders.

In 2011 it was estimated that some 11% of all households were within the PRS and the Scottish Government predict that this number will increase as there are already 500+ letting agencies north of the border who are managing over 150,000 rental properties, estimated to be about half the actual number.

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Even MP's Think Landlord Immigration Checks Are Unworkable

Even MP’s Think Landlord Immigration Checks Are Unworkable

MP’s Question Immigration Checks By Landlords

The Governments plan to make private rented sector (PRS) and social housing landlords legally responsible for checking the immigration status of all tenant applicants has raised questions on the policy from MP’s.

The proposal to make landlords perform immigration checks on tenants and prosecute those who fail to comply has caused outrage among UK PRS landlords, who would be expected to be doing the UK Border Agency’s work without payment.

Following the outline of the new proposals, Shadow Home Secretary, Yvette Cooper, a former housing minister, told the House of Commons during a lively debate on the Queens speech that landlords performing immigration checks on tenants would be unworkable, stating that: “The Government cannot tell us how their policy will be enforced, because they do not know who the landlords are and they will not have a statutory register.”

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The UK government have submitted new proposals that recommend Buy To Let landlords and home owners who apply for permission to make repairs and improvements to their properties are encouraged to make additional improvements at the same time as other ongoing works in a bid to make properties greener.

However the proposals fail to fully account for where the UK PRS landlords are expected to find the money for such extra improvements or even if such improvements will prove to be beneficial to tenants.

Conservative MP Tim Yeo said “The new proposals will effectively force landlords to complete non-essential improvements aimed at improving energy efficiency at the same time as they make minor repairs or improvements to their rental properties. If they refuse they could be denied permission to make essential repairs by their local council.”

It is also widely thought that the UK coalition government want to introduce a scheme that means all property repairs, such as the installation of a new boiler or central heating system, are logged with the council.
The council will then ‘recommend’ additional improvements, such as new double glazing or loft insulation that will also need to be carried out in order to get permission for the boiler installation.

The proposed costs of the ‘recommended’ improvements could be offset using the new government Green Deal scheme due to be launched in October 2012.

Mr Yeo commented on the proposals saying; “You’ve got to find ways of making the public more enthusiastic about energy efficiency and I think compelling people who have applied for planning consent to make some alteration to their home isn’t necessarily going to help.”

Council tenants in England who sub-let their homes could now face up to 2 years in prison under the coalition government’s new proposals.

The government plans would see the creation of a new criminal offence “Tenancy Fraud”, with a fine of up to £50,000 also possible.

UK Government officials estimate that up to 160,000 tenants sub-let their council homes to other people at cost of £5 Billion a year to the taxpayer.

Grant Shapps, the UK’s Government Housing Minister said: “Tenancy cheats are taking advantage of a vital support system for some of the most vulnerable people in our society and getting away with a slap on the wrist while our waiting lists continue to grow. It’s time for these swindlers to pay the price. It would cost us billions of pounds to replace the huge number of unlawfully occupied social homes across the country. Meanwhile tenancy cheats can earn thousands of pounds letting out their property, which was given to them in good faith and which could instead be offering a stable home to a family in need. The proposals I’ve announced today would not only deliver justice to these fraudsters but will also act as a deterrent to those who think they can earn a fast buck from this precious resource. I want everyone to know that our country’s social homes are going to those in genuine need, not providing a ‘nice little earner’ to someone who could afford to live elsewhere.”

Local councils would also receive more powers to investigate fraud, including better access to information from banks and utility companies.

Ministers are putting the proposals forward for consultation.

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Controversy has been ignited after Labour’s mayoral hopeful Ken Livingstone declared all-out war on letting agents and rogue landlords in London, whilst calling for rent caps.

Critics said his plans to intervene in the market, and cut rents to no more than one-third of a tenant’s wage, would result in landlords having to lower rents, leaving their yields in tatters and acting as a deterrent to further buy-to-let investment.

If elected in May, Livingstone will establish a London-wide, not-for-profit lettings agency, paid for by the public purse, and to be run by the Mayor’s office. Although  handful of local authorities do run lettings agencies, none begins to be on the scale proposed by Livingstone. There is speculation that other large metropolitan authorities could decide on a similar path.

Castigating letting agents across London, he called for rent controls and widespread intervention in the sector, including licensing.

Speaking to the Institute for Policy Research, Livingstone said: “We must actually intervene into the private rented sector.”

Livingstone said: “No tenant in the private rented sector should have to pay more than one third of their wage in rent. What London needs is a London-wide non-profit lettings agency. So I can announce today that I will work with other stakeholders to establish one that can start to make a change in the private rented sector for the better. It will put good tenants in touch with good landlords across the spectrum of private renting so that both can benefit from security of tenure and reduce the costs of letting. The new agency would get to grips with the problem of rogue landlords and tackle a series of issues on accreditation, inspection and enforcement, licensing and energy efficiency, as well as tenants’ deposits protection. Through this work we will challenge the scandal of rip-off agency fees, horrific standards and the daily experience of disputes over deposits in the private rented sector. In the coming weeks I will set out more detail of how this new arm of the Mayor’s role will work.”

The response from the current mayor of London, Boris Johnson, reckons rent controls would be devastating and he would tackle things much differently.

Mr Johnson has said as London Mayor he would introduce a new London-wide accreditation scheme for all landlords.

A new London Rental Standard, which would accredit private landlords. He would also introduce a ‘rent map’ to give tenants more information on fair rents in their local area.

But he will not countenance rent controls, hitting back at election rival Ken Livingstone’s plans and saying they would be ‘devastating’ for the sector.

A spokesperson for the Mayor said: “The proposal of rent controls would be devastating for the sector. Rent controls were ended in the UK because they were counter-productive. Whatever the ideological appeal, the mayor does not have the power to introduce them, and even if he did, they would be devastating for the construction industry. It would result in fewer homes being built and lead landlords to invest less in stock. Other major international cities such as New York are removing rent controls for precisely these reasons.”

But, chairman of the Residential Landlords Association, (RLA), Alan Ward was severely critical of both Livingstone’s and Johnson’s proposals. He said: “Livingstone’s call for rent controls is an old idea that never worked in the past. Until 1988, rent controls resulted in a shortage of supply and poorer conditions for tenants. Hardly a remedy for 2012. There is no doubt that rents in the capital remain far higher than anywhere else in the country, but the answer lies in improved supply.”

Mr Ward said of Johnson’s ideas: “With over 10,000 landlords in London already members of the London boroughs’ accreditation scheme, it would seem a waste of time and money re-inventing the wheel in this way. The Mayor should focus on supporting and encouraging existing accreditation schemes, freeing his office up better to target the minority of landlords who bring the sector into disrepute. This should be matched by a programme of serious tenant education, providing tenants with all the information needed to better hold their landlords to account for the service they provide. It beggars belief that some people spend more time assessing the state of a car they wish to buy than the homes they seek to rent.”

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Following on from Mike Clarke’s post on Spotlight on the 20th September – More Anger Over English Planning Law Changes I came across this story in last week’s press and thought I should share this here so that it can be read by other landlords…

The Government has insisted there is no “malign intent or hidden agenda” in its planning reforms in the face of a huge outcry over the proposals.

Adopting a more conciliatory tone than that shown by ministers in recent weeks towards opponents of the reforms, planning minister Greg Clark said the current public consultation over the proposals is genuine.

Ministers have previously expressed a determination to “win the battle” over the draft reforms, which slim down 1,000 pages of policy to 52 and focus on a “presumption in favour of sustainable development”.

The Government says the changes to the planning system are needed to boost growth, give communities more say in their local area and protect the environment, but concerns have been raised they could lead to a return to urban sprawl and damaging construction

Mr Clark admitted that some of the draft National Planning Policy Framework may not be expressed in “the clearest way” but insisted there is no Government agenda to change the nature of planning.

At a seminar organised by the British Property Federation, Mr Clark said: “The idea that the Government and I would have any part in introducing a set of reforms that have an impact on the ability of local people to express themselves and did anything to undermine the protections to the natural and historic environments that all my life I’ve been passionate about is simply not the case.”

He said the presumption in favour of sustainable development – which opponents say has not been explicitly defined – is not intended to introduce a “loophole” through which development could be imposed on local communities.

Countryside and environmental campaigners have claimed the reforms tip the balance too far in favour of short-term economic growth instead of protecting the environment, and ministers had labelled those who criticised the planned changes as “semi-hysterical”, “left-wingers” and of “nihilistic selfishness” for opposing housing development.

Prime Minister David Cameron, however, wrote to the National Trust on Wednesday assuring them that sustainable development is about maintaining balance between economic, environmental and social concerns, sentiments echoed by Mr Clark.

The planning minister said that when “1,000 pages is cut down to a document which is 50-odd pages it is inevitably the case that not everything is expressed in the clearest way, but that doesn’t signal any malign intent or hidden agenda to subvert the process”.

Read the full Daily Express article here

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