Written By Em

Em

Em Morley

Investigation Launched into Competition in the Mortgage Market

Investigation Launched into Competition in the Mortgage Market

Investigation Launched into Competition in the Mortgage Market

The City of London regulator, the Financial Conduct Authority (FCA), has launched an investigation into competition in the mortgage market.

It is concerned that the current regulatory system could be stopping new borrowers entering the market. The Mortgage Market Review (MMR) tightened lending rules and requirements in April 2014.

The FCA is also investigating whether borrowers can find out information about mortgage products and services easily enough.

Director of Strategy and Competition at the FCA, Christopher Woolard, says: “A mortgage is one of the biggest, if not the biggest, financial transaction millions of consumers will enter into in their lifetime. The mortgage sector also plays a vital role in the financial services industry and many areas of the economy.”1

He notes that competition is important to ensure that the sector operates well, by causing lower prices, better customer service and more product choice.

The FCA has launched a Call for Inputs to collect evidence from interested parties, such as consumer groups and lenders. It will close on 18th December 2015. In the first quarter of 2016, an outline of responses and a further action plan will be published, with the option of a full market study later in the year.

1 http://www.independent.co.uk/money/fca-launches-investigation-into-competition-in-the-mortgage-market-a6684126.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pressing Test on Carbon Monoxide Alarms is NOT Testing Them

Landlords and letting agents are warned that they may not be complying with new legislation if they simply press the test button on carbon monoxide alarms.

The law, which came into effect on 1st October, requires landlords or their agents to test smoke and carbon monoxide alarms at the start of each new tenancy.

However, an expert has advised that the test button on carbon monoxide alarms is not sufficient in ensuring that the alarm works; the test button tests the circuit, but does not check whether the sensor is functioning.

Pressing Test on Carbon Monoxide Alarms is NOT Testing Them

Pressing Test on Carbon Monoxide Alarms is NOT Testing Them

However, the new regulations require landlords to ensure that their rental properties have working carbon monoxide alarms.

Agents conducting these checks for landlords, including those that delegate the duty to maintenance staff or inventory clerks, could leave landlords exposed to prosecution if they do not specifically check that the alarms work.

Managing Director of Gas Safe Europe, John Stones, states: “Simply pressing the so-called test button only tests the battery, buzzer and circuit, yet the sensor is the component most likely to fail.”1 

He says that testing can only be done properly by injecting test gas, such as Detectagas, over the alarm.

Landlords and agents should also be aware that carbon monoxide alarm sensors have very short life spans.

From 1st October, private landlords have been legally required to install smoke alarms on each floor of their rental properties and carbon monoxide alarms in rooms where there are solid fuel burning appliances. This applies to new and existing tenancies.

The new law only applies in England.

However, some believe that the new laws do not go far enough. Some argue that carbon monoxide alarms should be required where there are gas boilers.

In Northern Ireland, the legal requirement is to have carbon monoxide alarms fitted in all new homes, whether rental or owner-occupier, and whenever a boiler or solid fuel stove is upgraded.

Recently, a mother spoke on Radio 4’s You and Yours show, urging the law to cover all homes, both old and new and rented or owner-occupied.

Stacey Rodgers lost her only child, ten-year-old Dominic, to carbon monoxide poisoning in February 2004.

He died after a neighbour’s faulty boiler leaked the gas through the brickwork into his bedroom.

Stacey has since become a campaigner to raise awareness of the dangers.

On the programme, she asked: “Your own property might be okay, but what about the home next door?”1

Scotland is due to have its own legislation created in December and in Wales, alarms are recommended, but not compulsory.

Unfortunately, it often takes a tragedy before there is action.

The show also considered whether landlords would turn a blind eye to the alarm regulations.

Landlords should stay up to date with all new laws and responsibilities.

1 http://www.propertyindustryeye.com/carbon-monoxide-legal-duties-agents-warned-that-pressing-test-is-not-enough/

 

 

 

 

 

Bristol to Adopt Ethical Lettings Charter

A new ethical lettings scheme for landlords and agents in Bristol has been announced, following a series of protests.

Any letting agents that sign up to the scheme may have to voluntarily agree to stop charging fees to tenants.

Bristol to Adopt Ethical Lettings Charter

Bristol to Adopt Ethical Lettings Charter

Acorn, a group of demonstrators, has organised ongoing campaigns at letting agent offices. It wishes for rent controls to be enforced.

Supporters protested before a cabinet meeting of Bristol City Council on Tuesday 6th October.

They chanted: “I don’t know what I’ve been told – they rent houses full of mould.”1

The Mayor of Bristol, George Ferguson, announced the adoption of an ethical lettings charter, which will encourage minimum standards in rental properties.

The voluntary scheme will encourage landlords and agents to achieve a bronze, silver or gold standard.

Ferguson told Acorn demonstrators: “There is one thing that absolutely rues me and that is the misuse by some landlords and agents of the deposits system.

“We must all unite to make sure we reduce that exploitation; I’m absolutely with you to tackle that abuse.”1

Last year, Acorn protested in a trick-or-treat style at an estate agent office.

The original ethical lettings charter is expected to be amended by Bristol City Council, which wishes to make a “few improvements” to make it legally sound.

The final charter is likely to be launched next month.

In its original form, it calls for:

  • An end to rolling tenancies.
  • Reasonable notice periods for repossessions.
  • Protection of all deposits.
  • An end to letting agent fees charged to tenants.
  • DSS welcome.
  • Control when and by how much rents rise.
  • Reasonable deposits.
  • Quick and adequate repairs.
  • Damp issues resolved.
  • Regular safety checks on appliances and utilities.
  • Smoke and carbon monoxide alarms.

1 http://www.propertyindustryeye.com/ethical-lettings-charter-adopted-as-demonstrators-win-the-day/

House purchasing up by 20% annually

Published On: October 8, 2015 at 4:27 pm

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Categories: Property News

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A survey from e.surv has found that over the past year, the total number of house purchase mortgage approvals has reached a twenty-month high, rising by 19.8%.

Rises

This represents the greatest monthly lending total since January 2014. In addition, last month saw 72,930 house purchase lending approvals. In August, there were 71,003, meaning that there was a 2.7% month-on-month increase.[1]

‘Mortgage lending is enjoying a late summer,’ observed Richard Sexton, director of e.surv chartered surveyors. ‘After record house purchase lending through the summer months, the numbers suggest that confidence within the UK housing market is still steadily strengthening. With interest rate speculation dying-down and a rate hike before next year appearing increasingly unlikely, lenders appetite for growth appears unchanged.’[1]

Sexton feels that, ‘this increase is both tempered by and benefiting from new regulations, including the Mortgage Market Review changes which came into effect earlier this year. Levels of High LTV lending are stable and reflect a steady, rather than volatile pace of growth.’[1]

‘It’s not just lenders who have been affected by a calmer financial outlook in recent months, prospective mortgage borrowers have seen their potential savings bolstered by low inflation rates and a recovering economic climate. Comparisons with the previous high in January 2014 underscore this point. Today’s progress isn’t the result of a final gasp of artificial support from the likes of Funding for Lending – but represents seven years of gradual rebuilding and consolidation by mortgage lenders,’ he added.[1]

Small-deposit, significant increase

Additionally, small-deposit lending soared to its highest level since October 2008 during the last month. The new post-recession high saw lending to buyers with a deposit of just 15% or less rise both monthly and annually. As a result, small-deposit borrowers made up 18.1% of overall house purchase mortgage approvals in September.[1]

In absolute terms, there were 13,200 small-deposit house purchase loans approved in September, up by 7.4% from August’s figure of 12,288. Annually, this represented a 22.5% increase.[1]

These increases particularly benefited first-time buyers, with the latest First Time Buyer Tracker from Your Move and Reeds Rains indicating that August 2015 saw 30,200 first-time buyer sales. This was a rise of 27.4% from May 2015.[1]

House purchasing up by 20% annually

House purchasing up by 20% annually

Mr Sexton noted that, ‘September was a particularly positive month for anyone looking to buy a home with a smaller deposit, even when compared to more generally benign conditions.’[1]

‘A more active mortgage market won’t directly build more homes. Deeper reforms to planning and skills are still needed to help that side of the equation if more demand via mortgage lending isn’t simply set to push up prices faster in turn,’ he added.[1]

Regional rises

Southern regions saw the most significant rises in small-deposit lending. By region, the rises recorded were:

Region Proportion of small-deposit loans(September 2015) Proportion of small-deposit loans(August 2015)
Yorkshire 29% 27%
Northwest 26% 26%
Midlands 21% 22%
Northern Ireland 21% 17%
UK Average 18% 17%
Scotland 17% 17%
South/South Wales 17% 15%
Eastern 15% 14%
South East 14% 12%
London 8% 8%

The South, South East and South Wales are emerging as improving locations for small-deposit borrowers. In the South East, small-deposit borrowers now represent 14% of all house purchase borrowers, up from 12% in August.

However, Yorkshire continues to retain its reputation as a great place for first-time buyers and in tandem, small-deposit borrowers, who represent 29% of all house purchase lending. Only the Midlands region saw a marginal dip in the proportion of small-deposit borrowers within their total house purchase lending[1]

[1] http://www.propertyreporter.co.uk/finance/house-purchase-lending-up-20-year-on-year.html

 

 

Right to Buy for Housing Association Tenants Given the Go-Ahead

Right to Buy for Housing Association Tenants Given the Go-Ahead

Right to Buy for Housing Association Tenants Given the Go-Ahead

Around 1.3m housing association tenants will be given the right to buy their home from as early as next year, as the Government’s controversial scheme is given the go-ahead.

The Government has secured a deal with social landlords and the National Housing Federation (NHF).

Prime Minister David Cameron comments: “Some people said this would be impossible and that housing associations would never stand for it. But today we have secured a deal.”1 

When they give a Right to Buy discount, the housing association will be compensated by the Government.

Housing associations will then keep the sales money to help them fund new homes. They will have flexibility over the tenure of the new stock, such as shared ownership.

In some cases, the housing associations can choose not to sell a particular property, for example, if it is in a very rural area and could not be replaced or if it has been adapted for disabled tenants.

However, if this arose, the housing associations would offer tenants the chance to use their discount on another home from either their own or another association’s stock.

1 http://www.propertyindustryeye.com/right-to-buy-for-social-housing-tenants-gets-go-ahead/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Good Landlord and the Rogue Tenant

The Good Landlord and the Rogue Tenant

The Good Landlord and the Rogue Tenant

One landlord has written into The Guardian after dealing with a rogue tenant. The newspaper’s expert resolves their query.

The landlord from Ipswich, Suffolk, writes: “I let a property through a well-known estate agent. After a couple of months the tenants abandoned it and I had to spend £150 on cleaning. They owed several months’ rent and I had to pay the Council Tax.

“I have been unable to get the agent to release the deposit held through the Tenancy Deposit Scheme [TDS]. They say they cannot release it without the agreement of the tenants. Is there any way I can force them to, as clearly the tenants are not going to return or respond?”1

Anna Tims explains what can be done: “The law, in seeking to protect tenants from rogue landlords, makes it difficult for landlords to seek redress from rogue tenants. The agent can only hand over the deposit with the tenant’s permission or, if that is not forthcoming, following a decision by the TDS or a court.

“You could ask the TDS to adjudicate, but it is not allowed to do so if, as in this case, the tenant is uncontactable. You would have to take your case to court and the deposit holder would need to pay the amount into a suitable client account pending the judgement.”1 

Have you had a similar experience and what was the outcome?

1 http://www.theguardian.com/money/2015/oct/08/rent-property-landlord-rights-tenancy-deposit-schem-es