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Government Announces New Homes Ombudsman for New Build Sector

Published On: October 3, 2018 at 7:59 am

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Categories: Law News

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The Secretary of State for Housing, James Brokenshire, has announced that a New Homes Ombudsman will be launched for the new build housing sector.

The role of the New Homes Ombudsman would be to specifically address issues regarding the build quality of new homes.

Speaking at the Conservative Party Conference, Brokenshire also claimed that the Government’s domestic priority is building enough homes to satisfy the country’s needs.

He said that “decades of under-investment and lack of political will” have created an environment in which homeownership has become unattainable for many people.

Brokenshire insisted that the New Homes Ombudsman would “champion” consumers, despite the wider ombudsman circle emphasising that fairness and impartiality are always at the core of their work.

Brokenshire told delegates: “This new watchdog will champion homebuyers, protect their interests and hold developers to account, and give confidence that, when you get the keys to a new home, you get the quality build you expect and the finish you pay for.”

The announcement lacked any further details, but seems to indicate the Government’s wider direction with the housing market.

It had previously proposed one single ombudsman for the entire housing sector, covering new builds, social housing, and both private sales and lettings.

This now seems unlikely, considering that the Government is launching the New Homes Ombudsman.

An alternative proposal was that consumers would seek redress via a single portal, which would direct them to the appropriate ombudsman. This now seems more likely, with the possibility that there would be only one ombudsman to cover each part of the housing sector.

Katrine Sporle, The Property Ombudsman, has responded to the announcement: “We welcome the news that the Government will launch a New Homes Ombudsman. We have always agreed that new homes should be covered by an ombudsman, as consumers have no idea that, when they buy a new home directly from a developer, they will have no access to a redress scheme.

“This announcement will mean the housing market becomes a fairer place for all involved.”

Stabilising Rental Yields Could Cause London House Prices to Balance

Published On: October 2, 2018 at 9:54 am

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International buyers have been purchasing a high proportion of London property in PCL

As rental yields in the capital look to stabilise, the slide in the value of homes in Greater London is expected to come to a halt as early as autumn 2020, according to the latest analysis by Home.co.uk.

The company’s data suggests that house prices look set to stabilise in the capital within two years, due to improving rental yields.

Home’s Doug Shephard explains: “During London’s recent property boom, house prices soared ahead of rents. Investment fever drove prices up more than 50% in just five years. Meanwhile, rents rose only 10% over the same time period, causing yields to collapse.”

Stabilising Rental Yields Could Cause London House Prices to Balance

Stabilising Rental Yields Could Cause London House Prices to Balance

Rental yields fundamentally underpin house prices and, following a long period of decline, the tide has turned. Sliding property values, combined with rapidly rising rent prices, are driving yields back up in the capital.

The average house price in London has fallen by around 2.3% over the past year, while rents have jumped by 4.3%. Moreover, rent price hikes are accelerating due to a scarcity of rental accommodation. Overall, the number of available properties to let in Greater London has dropped by around 14%, but, if we filter out the unlettable properties that have been hanging around for more than 20 weeks on the market, the decline is more like 27%.

Low rental yields, sliding capital values, higher taxation and more regulations have all served to disincentivise investors from purchasing more properties. In fact, this combination of factors has been encouraging many landlords to leave the rental sector altogether, hence the decrease in available properties to let, caused by a steep fall in supply of 21% over the last 12 months.

At present, the average gross rental yield in London of 3.7% remains too low to be attractive, and returns in prime central locations are even worse, making buying a property to let far more lucrative in other UK regions.

Across England and Wales, the average rental yield in August was 4.7%, while, in Leeds, for instance, the typical return is a far more attractive 6.0%.

Looking at the counter trends of sliding prices and surging rents in London, Home estimates that rental yields could reach as high as 6.0% in the capital by the end of 2020; sufficiently attractive returns to trigger substantial reinvestment, thereby stabilising house prices.

Shephard poses the question: “How long will London prices keep falling? This is a key question for the UK market as a whole, as history tells us that what happens first in London happens later to the rest of the regions.

“The answer may be quite simple: when rental yields return to attractive levels. For that to happen, either prices must come down, or rents must rise, or both. In fact, the current trends show both processes are occurring already, but slowly.”

He adds: “We expect some significant rent hikes over the next two years, as tenants compete to secure a home in the capital, and this will accelerate the rise in yields. Sufficient yield recovery will prompt landlords to invest once more in London’s vital private rented sector, although, should rent controls be imposed, they will almost certainly stay away.”

Arthur Online Launches Integrations with Rightmove and Zoopla for Easier Lets

Published On: October 2, 2018 at 9:26 am

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Arthur Online, a cloud-based property management platform, has launched new integrations with portals Rightmove and Zoopla to make the lettings process easier for all involved.

Under the new integrations, you can now list your property for let directly via the Arthur Online platform. Millions of prospective tenants using Rightmove or Zoopla will be informed as soon as your property is available, helping to prevent long void periods.

If you struggle to find the time to manually upload your properties to portals, then Arthur Online will do this for you as soon as your property is marked as available for let. Rightmove and Zoopla will automatically pull all of the information needed for a listing directly from Arthur’s database, including images, property description, location, price, etc., meaning that you only have to upload this information once.

Once a new tenant has moved into your property, they can then use Arthur Online’s tenant app and web portal, so that both you and your tenant can track payments, view the tenancy agreement, flag and track the progress of maintenance issues, and schedule convenient times with contractors.

Marc Trup, the Founder of Arthur Online, discusses the new integrations: “We’re delighted to offer our customers an even higher level of service by partnering with Rightmove and Zoopla. As a property manager myself, I fully appreciate how hard it can be to manage a property portfolio and how much time it takes up – which is why Arthur Online uses an open API, so it can easily integrate with market leading websites like Zoopla and Rightmove.

“The rental market is moving faster than ever, and time lost literally means money lost. With the integration of Rightmove and Zoopla, you can significantly reduce your void periods. Not only that, vital documents and information like rental agreements, tenancy inventories and images are just a click or swipe away, so you can react quickly to those unexpected changes.”

Lettings Sector Warned to be Cautious of For-Profit Inventory Associations

Published On: October 2, 2018 at 8:48 am

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improve compliance with reports and inspections

The lettings sector, including landlords, agents and tenants, is being warned to be cautious of a rising number of companies claiming to be independent inventory trade bodies.

The Association of Independent Inventory Clerks (AIIC) says that these new businesses have been established to make money, while the AIIC is a not-for-profit organisation.

The AIIC argues that these so-called inventory trade bodies do not offer the correct level of protection for consumers and are damaging for the professional lettings industry.

“It’s a case of wolves in sheep’s clothing,” insists Danny Zane, the Chair of the AIIC. “These companies are masquerading as industry trade bodies when they are, in fact, for-profit ventures offering additional products and software solutions.”

He adds: “Unfortunately, these companies do not protect consumers in the way they should and could leave all parties involved in a rental transaction at risk of significant issues further down the line.”

The AIIC explains that, as the private rental sector continues to grow, more companies claiming to be industry associations have sprung up, and property professionals should be cautious about which organisations they partner with.

The trade body reminds all property professionals and consumers that the presence of an independent, professionally compiled inventory could be invaluable.

An inventory report confirms the condition of a rental property at the beginning and end of a tenancy, therefore making it clear whether any deposit deductions must be made.

Landlords who don’t have a comprehensive inventory available at the end of a tenancy could find it difficult to make deductions, while tenants who rent from a private landlord who hasn’t provided an inventory could leave themselves open to unnecessary costs or disputes.

In the event of a dispute at the end of a tenancy, deposit protection schemes will use an inventory report as their primary source of evidence, further highlighting the importance of providing a detailed and impartial report from a reputable source.

Zane explains: “Letting a property is becoming increasingly expensive and the private rented sector is becoming more widely regulated. Therefore, commissioning an independently compiled inventory from a clerk who is a member of an organisation like the AIIC is vitally important to protect a landlord’s investment and provide tenants with the required level of protection.”

If you decide to compile your own inventory, we have created a comprehensive guide to help you produce a document that protects both you and your tenants: https://landlordnews.co.uk/guides/a-landlords-guide-to-inventories-and-avoiding-disputes/

Average Stamp Duty Charge Rises to £8,400, Reports HMRC

Published On: October 2, 2018 at 8:03 am

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The average Stamp Duty charge on a residential property transaction rose by 7% in the last financial year, to hit £8,400, according to HM Revenue & Customs (HMRC).

HMRC has recently released its Annual Stamp Duty Statistics, covering the financial year 2017-18.

During this timeframe, Stamp Duty receipts increased by 10%. HMRC reports that £12,905m was raised, with 97.3% coming from property transactions in England. Wales and Northern Ireland contributed just 2% and 0.7% respectively. Scotland has its own devolved system.

Within England, property sales in London contributed £4,860m, or 39%, of total Stamp Duty receipts.

Generally, properties worth over £1m accounted for just 3% of transactions, but a significant 44% of total Stamp Duty receipts during the year.

The majority of Stamp Duty receipts – £9,275m – came from residential transactions, of which HMRC reports that there were 1.1m.

The average Stamp Duty charge per residential property transaction increased by 7% over the last financial year, to reach £8,400.

During 2017-18, there were 69,100 property transactions for which the Government’s first time buyer Stamp Duty relief was claimed, totalling an exemption of around £160m. This relief was introduced in the Autumn Budget last November.

In the same timeframe, 252,000 additional dwellings transactions were recorded, bringing in a higher amount of receipts, at a total of £4,060m. Of this, £1,895m worth of receipts came from the 3% Stamp Duty surcharge for extra homes.

Additional dwellings transactions accounted for 23% of all residential sales and 44% of residential Stamp Duty receipts.

As a landlord, you will be subject to the 3% Stamp Duty surcharge on the purchase of additional properties, including buy-to-let and second homes, worth £40,000 or more.

We have compiled a handy guide to help you understand these Stamp Duty charges in more detail – click the following link to read the article: https://landlordnews.co.uk/landlords-guide-3-stamp-duty-surcharge/

Labour Offers Support to Tenants in Private Rented Homes

Published On: October 1, 2018 at 9:33 am

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Categories: Tenant News

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Last week, it was announced by Labour’s Shadow Housing Secretary John Healey MP that he was willing to offer support to the 11.5 million people who rent from private landlords. This was part of his speech at the Labour Party Conference, in Liverpool.

Specifically, this promise included creating more power for tenants, with the creation of a £20m fund, in order to aid the expansion of renters’ unions. Healey described how tenants have had to accept a rise of over £1,800 a year in rent prices, since 2010. He also went on to point out that the end of a tenancy in a private rented home is the biggest single cause of homelessness in the UK.

Healey began his speech by saying: “The next Labour Government will be the most radical Government on housing since that great post-war Labour Government.”

In Labour’s analysis, it shows that there are 1.3 million sub-standard private rented homes in England, occupied by 490,000 families with children.

He also commented: “Tenants who rent from private landlords have been hit hard by the housing crisis. Labour’s commitment is clear: we’ll give renters new rights to control rental costs, improve conditions and increase security.

“Renters’ unions help put power in the hands of tenants. And the next Labour government will fund set-up costs for these unions across the country to support renters to defend their rights, and make the housing market fairer.”

Healey has also made the promise to put an end to rough sleeping. He wants to build more social housing, as well as ensure that there are affordable rental homes, with rents set at a third of the average local income.

If Labour are successful at the next general election, there will be plans to scrap Section 21 no-fault evictions. They also want to undo cuts to legal aid for housing related cases, as well as introduce the option for three-year tenancies.