Government has today announced measures to make Client Money Protection (CMP) mandatory for all letting agents across England. The announcement comes in response to ARLA Propertymark’s long running campaign to ensure that tenants and landlords receive greater protection. The move follows steps towards regulation taken in Scotland and Wales.
This is an argument we have been making for some time alongside Baroness Hayter and Lord Palmer. Working together we have managed to convince the Government of the merit of compulsory CMP. It’s a campaign that’s taken over two years to come to fruition and is a clear step forward towards a more regulated industry; akin to others such as solicitors or travel agents. CMP safeguards landlords and tenants in the event that agents misappropriate their money. With the ban on letting agent fees on the horizon, this is more important than ever before, so we are very pleased the Government has agreed to take it forward.
Baroness Hayter, a Labour peer who has championed the measure said:
“The working group, chaired by Lord Palmer and myself, looked carefully at whether CMP should be mandatory for all agents handling client money. The evidence was overwhelming, and we recommended the government use its reserve powers to implement this. We are therefore delighted that the Government has accepted our recommendation as it will ensure tenants and landlords alike are provided with extra security in the lettings process. May I also extend special thanks to ARLA Propertymark for its role in marshalling the industry to back the measure and for providing the working group with real ‘on the ground’ evidence for why mandatory CMP is so desperately needed.”
Government have today confirmed that new measures to crack down on rogue landlords will come into force on 6 April.
Those of you who have attended a recent ARLA Propertymark Regional meeting will be aware of the new measures, which include powers to prosecute and impose significant fines or issue civil notices with penalties of up to £30,000.
ARLA Propertymark has long called for greater enforcement activity in order to end poor housing provision. The new measures will effectively mean that income raised from these penalties will be ring-fenced for further enforcement activity.
While we are pleased that the government have been persuaded by our arguments, the responsibility now falls to local authorities to use the tools at their disposal to raise standards.
Local Authorities will also be able to receive details from deposit protection schemes to build a picture of the rental market in their area. We hope this will reduce the number of local authority licensing schemes which are seen by many as having have been brought in to try to map the private rented sector within their locality.
Whilst the Department for Communities and Local Government are enacting legislation to root-out rogue landlords and agents, HM Treasury has today published their response to the recent consultation on the 4th Money Laundering Directive, stating their intention not to regulate lettings activity.
Section 6.2 of the Money Laundering Regulations 2017 Consultation response states:
While it should be noted that the majority of respondents to the consultation supported the inclusion of letting agents within the regime, intelligence and evidence was not provided to justify the inclusion of lettings activity and the attendant costs of this proposal for those affected. The government will only “gold plate” where there is good evidence that a material ML/TF risk exists. In line with the directive, lettings agents will continue to be within the scope of the regulations where they carry out estate agency work in accordance with section one of the Estate Agents Act 1979 (as amended). However, the application of the Money Laundering Regulations will not be extended to include lettings activity.
ARLA is disappointed the Government has chosen not to include lettings activity within the Money Laundering Regulations 2017. The risk is that money laundering activity will transfer from the sales sector, due to the increased powers within the new regulation, into the lettings sector which remains unregulated.
However, within the context of the recently increased legislative burden on letting agents, coupled with the shock announcement to ban letting agent fees in the Autumn Statement, we understand why the Government has chosen not to impose these requirements at this critical juncture.
Property shortage is ‘dire’, RICS admits, as supply slips even further, iConn Property Management, Canterbury0
Prospective home buyers have returned to the market following the Brexit vote – only to find there is very little out there.
The RICS this morning described the property drought as “dire”, and a leading estate agent predicted that after the shock result of the US presidential election, things can only deteriorate.
As Donald Trump himself forecast, his election would be “Brexit, plus, plus, plus”.
The RICS report this morning, which covers October and was compiled well before the results of the election were known, said house hunters are returning to the market following the June Brexit referendum.
Home buyer demand has increased for the second consecutive month, said the RICS. Across the country, more of its agency members reported a rise in home buyer interest.
However, they also reported that the number of properties on the market dropped, continuing a two-year trend.
While prices have risen at a national level, central London respondents to the RICS survey report the eighth consecutive monthly drop in prices.
According to the RICS, the national rise in prices has been fuelled by a continued fall in the number of new properties on the market.
Respondents everywhere reported a further decline in new instructions over the month.
Simon Rubinsohn, RICS chief economist, said: “The dire shortage of available housing across the UK is continuing to push prices upwards, regardless of the uncertainty linked to the ongoing discussions surrounding Brexit.
“We are only weeks away from the Autumn Statement, and it will be interesting to see what measures – if any – the Chancellor will put in place to increase housing supply and create a more affordable market.”
The RICS also reported that agreed sales rose marginally across the UK.
In the lettings market, tenant demand picked up firmly in the three months to October with 29% more surveyors reporting a rise in enquiries, rather than a fall.
Demand continues to outpace new supply in all areas apart from London, where for the second consecutive quarter, demand – and rents – fell.
Separately, north London estate agent Jeremy Leaf yesterday warned of a likely deterioration in the housing market, caused by fresh uncertainty in the wake of Trump’s election.
Leaf, a former UK housing spokesperson for the RICS, said: “We are likely to see a further period of uncertainty because he [Trump] will not be able to take any decisive action until he assumes power in mid-January.
“At the very least it looks like we will have fewer transactions, tighter lending criteria, less housebuilding and higher rents – which is exactly the opposite of what we’re looking for at the moment.
However, some agents a few miles away in central London are anticipating doing deals with wealthy Americans looking to get out of the States, and also with Middle Eastern buyers who, until yesterday’s shock result, had been planning to purchase property in the US.
Property buying agencies are also hoping to cash in.
RICS says nearly 2m more rental properties will be needed within ten years, iConn Property Management, Canterbury0
The Government must urgently deliver 1.8m new rental homes for UK families, the Royal Institution of Chartered Surveyors has said.
The RICS is urging the prime minister to abandon David Cameron’s previous home ownership focus and reverse April’s Stamp Duty measures.
It is also calling for a stronger ‘build to rent’ sector.
Jeremy Blackburn, RICS head of policy, said: “It’s time for Theresa May to get out her hard hat. We are facing a critical rental shortage and need to get Britain building in a way that benefits a cross section of society, not just the fortunate few.
“Our latest figures show that there has been a 15% decline in house sales to first-time buyers over recent months.
“The private rented sector became a scapegoat under the previous prime minister. Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future.
“We must ensure that it is fit for purpose, and the Government must put in place the measures that will allow the rental sector to thrive. Any restrictions on supply will push up rents, marginalising those members of society who are already struggling.”
It says that there has been a sharp drop in the number of available properties.
According to the RICS, purchases of buy-to-let properties have dropped sharply since Stamp Duty changes kicked in on April 1, and 86% of landlords have no plans to increase their rental portfolios.
The RICS says the private rented sector is “ailing” and that 1.8m new rental homes are needed by 2025 just to keep up with current demand.
The problem of insufficient rental supply is expected to be exacerbated next year when landlords’ right to deduct their mortgage interest from their income tax bill is removed.
University grants for poorest students axed and replaced with loans, iConn Property Management, Canterbury0
Around 500,000 of England’s poorest students are set to be saddled with more debt now that tuition fees have been increased to £9,250
The Government has faced heavy criticism on the day university maintenance grants were replaced with loans for half a million of England’s poorest students.
Sorana Vieru, National Union of Students vice president, labelled the move “disgraceful” and said it “basically punishes poorer students simply for being poor”.
“So they have to take a bigger loan than those students from privileged backgrounds,” she told BBC Breakfast on Monday
It could put off students from underprivileged backgrounds from applying, who might not understand how the loan system works, or are very debt-averse.
We also know mature students are way more debt-averse than younger students and BME [black and minority ethnic] students perceive student debt on a par with commercial debt.”
The Government was heavily criticised earlier this year for“frighteningly and undemocratically” pushing the changethrough a small committee most people had never heard of, consisting of just 18 MPs and at a debate which lasted just 90 minutes.
In the 2015 Budget, former chancellor George Osborne announced the Government’s intention to abolish grants and replace them with increased maintenance loans, a change which campaigners argued would have an impact on student perceptions of the value of higher education.
University students from families with a household income of £25,000 or less were entitled to a grant to cover living costs of £3,387 per year. This grant then decreased as the family’s income increased and came to an end when a household earned more than £42,620.
As of Monday, though, those students who live away from home outside of London will receive a higher loan amount of up to £8,200, while those in the capital will get up to £10,702.
This will then all have to be repaid under the same terms as existing loans once a graduate earns more than £21,000 per year.
At the time of the debate, Liberal Democrat leader, Tim Farron, described how he worked in higher education before becoming an MP and saw, at first-hand, how being at university allowed people “to grow and develop.”
He added: “This is a very frightening prospect for young people and their parents. This is a typical Tory reaction, they don’t understand what it is like to struggle.
“We have worked to target support to the poorest students, and removing that vital help will hurt those who need it most. Plans to cut maintenance grants are wrong and we will fight these plans tooth and nail. Social mobility is a real priority and these changes threaten to further entrench inequality. It is something I oppose.”
An opposition day debate in the Commons, which was launched by the Labour Party following significant cross-party opposition to the proposals and lobbying from students’ unions from across the UK, saw MPs vote down the opposition day motion to annul the Tories’ plan by 292 for and 306 against. The vote on the praying motion to annul the regulations also narrowly fell by 292 for and 303 against.
The Government, however, has faced fresh criticism of its handling of student loans repayments after making a U-turn on a 2012 promise by freezing the student loan repayment threshold at £21,000, meaning around two million graduates are now being forced to pay back more on their loans than originally promised.
The change was implemented despite 84 per cent of respondents to a Government consultation opposing the move.
A parliamentary debate was recently triggered after more than 130,000 people signed a petition calling on the Tories to overturn the decision. The petition said the retrospective changes “threatened any trust had in the student finance system.”
At the debate, MPs argued the Tories had “maxed out the nation’s credit card” and now students and graduates were being left to “foot the bill”.
Helen Jones, Labour MP for Warrington North and chair of the Petitions Committee, said in her opening remarks: “What’s happening at the moment is simply and totally wrong.
“The worst thing about this decision is it is retrospective. A commercial organisation would not be able to do this, but the measures it imposes on others it appears [the Government] is not prepared to adhere to itself”
Property Industry Eye reports mortgage approvals at 15-month low in month of Brexit vote.
Mortgage approvals fell to a 15-month low in June amid Brexit jitters, data from the British Bankers Association reveals.
Figures from the trade body show mortgage approvals for house purchases dropped from 41,842 in May to 40,103 in June while net lending fell from £1.6bn to £1.3bn over the same period.
The number of approvals are 11% lower year-on-year. Overall, however in the first half of 2016 ,numbers were 5.5% higher than in the same period of 2015.
While the number of approvals was down, the value was up with gross mortgage borrowing of £12.2bn in the month was 4% higher than in June 2015, while borrowing in the first half of 2016 was £79.9bn, which is actually up compared with £63.6bn in the same period of 2015.
Dr Rebecca Harding, chief economist at the BBA, said: “This month’s high street banking data reflects the uncertainty that was felt ahead of the EU referendum.
“Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote.”
“Mortgage lending and approvals also fell back in June but remain above the low levels seen in April following the introduction of the Stamp Duty surcharge.”
Andrew McPhillips, chief economist at Yorkshire Building Society, said: “These figures show that home buyers chose not to postpone getting on the housing ladder despite uncertainty around the EU referendum. That said, it’s important to note that increases in lending are not solely influenced by movements in demand, but also by house prices. “Current levels of house price inflation are putting upwards pressure on the size of the loans people are taking out which is, in turn, driving up mortgage lending. There was a 4.9% monthly increase in property transactions in June, according to HMRC, and the fact that lending is increasing on a much steeper scale shows how house price increases are affecting the mortgage market.
“Looking at the long-term trends, property transactions are actually down by 10.2% on last year, compared with a 4% increase in lending over the same period. The consequence of increasing house prices is that many people are being pushed out of the market due to the amount of money required to get on the property ladder.
“There is a clear need for more homes to be built, which should act to reduce house price inflation and help to make homes more affordable.”
New legislation regarding Right to Rent checks came into effect on 1st February 2016. The Home Office have published guidelines regarding Landlord’s requirements for ensuring the relevant checks are carried out, prior to a tenancy commencing. We thought the below guidance notice and relevant links would be useful for all Landlords.
For further information regarding Right to Rent, please click on the following link:
Many mortgage lenders are now tightening their lending criteria following changes to legislation on tax relief for landlords. The Guardian reports Nationwide’s response to this:
Nationwide building society is tightening up its criteria for lending to buy-to-let landlords ahead of changes to how much tax relief they will be allowed to claim against their repayments.
Landlords who take new loans from the society’s specialist arm The Mortgage Works (TMW) will only be able to borrow up to 75% of a property’s value, instead of the current 80%, and will have to prove that their rental income is at least 145% of their monthly mortgage payments. Currently the figure is 125%, in line with most other lenders.
The changes come ahead of new rules on mortgage interest relief for landlords, which will begin to take effect in April 2017, and as the Bank of England attempts to rein in buy-to-let lending.
Under the tax changes, landlords who can currently get tax relief of 40% on their interest payments will see the amount reduced over five years to 20%. Lenders have also been told to consider the borrower’s costs associated with letting the property, including tax costs, when they assess affordability for loans.
Nationwide’s changes to the rules on rental income, which come into effect on 11 May, will mean that a landlord who takes £10,000 a year in rent will see the maximum loan they can have reduced from around £160,0000 to £138,000.
Alternatively, if they want to borrow up £160,000 at 65% loan to value “they will have to source a property that will yield an extra circa £130 in rent per month”, the lender said.
Paul Wootton, the managing director of TMW, said the move was designed to help landlords strengthen their cashflow position “and help them withstand the impact of increased costs from the new tax regime”.
He said: “As a responsible lender, this change is a pro-active move that recognises the need to help safeguard rental cover for landlords over the coming years, and in advance of the forthcoming changes to mortgage interest tax relief.”
Andrew Montlake, the director at Coreco Mortgage Brokers, said the change showed that lenders were starting to worry about how recent tax changes would effect landlords’ income in the future.
“I suspect they will not be the last to change their rental calculations with this in mind and landlords should review their portfolio and financing requirements sooner rather than later, as well as making sure they are aware of the very real effects these tax changes will have on their future income,” he said.
“The worry is that this will hit not just landlords, but tenants too in the form of higher rental payments at a time when many are already stretched”.
Other lenders have been making changes to criteria, with Barclays increasing the rent needed to cover repayments to 135% in December. Borrowers who do qualify for loans, however, are being offered record low rates.
Letting Agent Today reports the large drop in rental housing, following information from the Association of Residential Letting Agents:
The supply of rental housing stock on letting agents’ books fell sharply in March, to the lowest level since the start of last year according to the Association of Residential Letting Agents.
Demand also dropped in March; ARLA agents had 33 prospective tenants registered per branch on average, down 11 per cent from 37 in February. This stands below the figure recorded in March last year when agents registered 36 on average.
Supply has also fallen year on year. In March 2015, the average number of properties managed per branch was 192, which is down 12 per cent this year with just 169 rental properties managed per branch- the lowest level since records began in January 2015.
It’s a brighter picture in Scotland, where agents had on average 273 properties on their books, and Yorkshire and Humberside, where 207 properties were recorded on average per branch. In London however, agents had just 122 properties on their books per branch.
In March, some 65 per cent of ARLA agents predicted that current and prospective buy to let landlords will walk away from the market following the April stamp duty changes, causing a decrease in the supply of rental properties.
Rent costs rose in March for a third of tenants and three in five ARLA members fear they will increase further as a result of the changes.
“We don’t expect falling supply to stop here – the recent stamp duty changes are very likely to cause supply to decrease even further, as landlords withdraw from the market” says David Cox, the association’s managing director.
April brings New Legislation For Letting Agents and Landlords – iConn Property Management, Canterbury0
New changes to legislation came into effect at the start of the new tax year (1st April 2016).
The big four legislations for lettings and buy-to-let include: SDLT changes, the abolishion of Wear and Tear allowance, tenants right to request energy efficiency improvements, and Universal Credit. ARLA explains:
Higher rates of Stamp Duty Land Tax for buy-to-let properties have now been introduced and apply from 1 April. A surcharge of 3% will be payable on all buy-to-let properties and second homes.
David Cox, ARLA MD said: “We’re about to see supply nosedive, demand sky-rocket and rent prices go through the roof. The introduction of the new stamp duty charges is set to push the private rental sector into a state of despair.” “In order for landlords to be able to afford to own a BTL property, tenants will begin to see the additional costs passed onto them, which means they could see less money spent on maintaining their property, and also an increase in rent costs.
Wear and Tear Allowance
The current 10% Wear and Tear Allowance which allows landlords to reduce the tax they pay, regardless of whether they replace the furnishings in their property, will be replaced. From April 2016 landlords will only be allowed to deduct the costs they actually incur for replacing furnishings in their rental properties.
Right to request energy efficient improvements
Tenants now have the right to request energy efficiency improvements to the property they are renting that may not be unreasonably refused by their landlord, provided that:
– The measure is one of the energy efficiency measures listed in the Schedule to the Green Deal (Qualifying Energy Improvements) Order 2012, or is a measure to be installed in order to connect to the gas network;
– The improvements can be financed at no cost to the landlord – this may be from central government, a local authority or any other person;
– It can be wholly funded by the tenant/s themselves;
– OR it an be wholly financed by a combination of two or more of the financial arrangement listed above.
Universal Credit is a new type of benefit designed to support people who are on a low income or out of work. It will replace the six outgoing benefits including housing benefit and is currently being rolled out across the UK.
In times of many recent legislative changes, Landlords and Letting Professionals are put under pressure to keep up-to-date with all new regulations. As licensed members of ARLA, landlords and tenants are guaranteed to be using a professional agent that understands and complies with the current legislation and best practice. iConn are “governed by a Code of Practice”, and therefore able to provide a framework of ethical and professional standards at a level far higher than the law demands, making sure our landlords and tenants remain in safe hands.
The office of iConn will be closed on Good Friday, Easter Sunday and Bank Holiday Monday, but will be open on Saturday 26th March between 9am-1pm.
As usual, we have arranged an emergency call out service for when the office is closed, for all our managed properties. For tenant find properties, please report any faults direct to your Landlord as normal.
Faults should be reported as follows:
Plumbing and Heating faults:
Belmont Heating 0800 756 6748
TS2 Contracts 07793809322
Locks & Key faults:
Acme Locks 01227 785551
Plumbing & Drainage faults:
Mains & Drains 07809330751
Please note if you have a British Gas homecare agreement in place, you should contact them in the first instance as usual on 0800 365 100.
Please also refer to our website for procedures regarding emergency call outs. http://www.iconnproperties.co.uk/contact/out-of-hours-contact.php
Happy Easter from all at iConn Property Management
Councils told to stop telling tenants in process of eviction to stay put – iConn Property Management, Canterbury0
A recent article submitted by the Property Industry Eye discusses the issue of how authorities treat homelessness applications, stating that “Local Authorities must stop routinely advising tenants to stay put until the bailiff arrives before they can be accepted as homeless”.
Housing minister Brandon Lewis has written to all chief executives of local councils saying that households should not be put in this position, and clarifying the guidance about homelessness.
In his letter he says: “Authorities should not routinely be advising tenants to stay until the bailiffs arrive; there is no barrier to them assisting the tenant before this. By doing this, local authorities miss a valuable opportunity to prevent homelessness.”
The letter follows pressure from ARLA, whose managing director David Cox has repeatedly raised the issue of local authorities advising tenants to stay in their property beyond the notice period, compelling the landlord to go to court to gain possession, running up considerable costs.
In his letter, Lewis says: “Landlords and tenants continue to raise concerns about local authorities advising tenants to stay when issued with a Notice seeking possession of a property let on an Assured Shorthold Tenancy under Section 21 (1) or (4) of the Housing Act 1988.
“I receive a large amount of correspondence on this.”
He continues: “The statutory Homelessness Code of Guidance, which local authorities are required by law to have regard to, is clear on this matter.
“It contains guidance on how authorities should treat homelessness applications in circumstances where a tenant has received a valid S21 notice.
“It says that housing authorities should not, in every case, insist upon a court order for possession and that no local authority should adopt a blanket policy in this respect.
“The Guidance states that if the landlord intends to seek possession and there would be no defence to an application for a possession order, then it is unlikely that it would be reasonable for the applicant to continue to occupy the accommodation.
“Unless a local authority has very good reason to depart from the statutory guidance, then they should not be placing households in this position.”
Lewis says that he will specifically be looking at the way local authorities deal with S21 notices.
Cox said that he hoped that the letter would end what has been a “real problem” for the industry, but added that ARLA would continue to press the minister on the issue.
First-time buyers outnumbering buy-to-let purchasers by three to one – iConn Property Management, Canterbury0
Rosalind Renshaw from Property Industry Eye reveals the turn around with the sales market;
There were 311,700 mortgages issued to first-time buyers last year. While the figure was the same as 2014, the amount borrowed – £46.7bn – was the highest since 2007.
Home movers took out 365,800 loans for house purchase, down fractionally (0.2%) on 2014. Again, though, the amount, at £72.1bn, was the highest since 2007.
Buy-to-let lending rose by both volume (up by 28%) and by value (up 39%), and that too was at its highest since 2007.
Despite the rise in buy-to-let lending, last year first-time buyers outnumbered buy-to-let purchasers with mortgages by three to one.
Only 41% of buy-to-let mortgages were for house purchase, a total of £15.6bn. The bulk of buy-to-let lending was in the form of re-mortgaging – something which buy-to-let borrowers constantly do as they seek out better deals.
John Heron, managing director of Paragon Mortgages, said: “A common accusation levelled at buy-to-let landlords is that they have an unfair advantage over home-buyers.
“The data would suggest this is not the case, with buy-to-let purchases making up only 11.6% of all purchases.
“First-time buyers accounted for three times as many transactions as buy-to-let purchasers.”
Separately, the Office for National Statistics has said that average house prices ended last year at £301,000 in England, £175,000 in Wales, £193,000 in Scotland and £148,000 in Northern Ireland.
The highest average house price in England was in London at £536,000, and the lowest was in the north-east at £155,000.
The ONS puts annual house price inflation last year at 7.3% in England, 1.0% in Wales, -0.2% in Scotland and 1.5% in Northern Ireland.
Another relevant article from ARLA regarding the Government’s Right to Rent Scheme:
The Right to Rent scheme – which reguires landlords or agents to check ID of all prospective adult occupiers – is being rolled out across England from 1 February 2016. Where an adult occupier has a time limited right to remain, landlords and letting agents will need to conduct follow up checks. These need to be made 12 months from the initial check or at the expiry of the individual’s right to be in the UK, whichever is the later.
ARLA have been part of the Landlord panel throughout development of Immigration Act 2014 and Immigration Bill 2015 and have delivered a series of events across England to support letting agents in complying with the legislation.
Right to Rent FAQ
We have worked with Home Office and UK Border Agency to answer the questions that are widely asked by landlords and letting agents.
What happens where I have a US citizen and her family moving to the UK? They are not visiting prior to arrival and need to agree a residential tenancy, ship their furniture and occupy on arrival?
Prior to any agreement for residential tenancy, the landlord or letting agent should conduct Right to Rent checks. In such a scenario as above, if the US citizen had a relevant visit visa and therefore a ‘limited’ right to reside in the UK (specifically in the implementation phased area), their visa will substantiate that. In practice, this will generally mean that the new tenancy agreement is subject to a condition that the Right to Rent checks are satisfied once the US citizen arrives in the UK.
I’m a law abiding agent organising a tenancy for a family moving from Australia in December. I meet all requirements of all legislation that I am asked to comply with. They will arrive at 7pm on a Friday evening. In reality, how do I deal with this?
As above. Prior to any agreement for residential tenancy, specifically in the implementation phased area, the landlord or letting agent should conduct right to rent checks before the prospective tenants are entitled to occupancy and the prospective tenants will be able to substantiate their right to reside through provision of their visas.
How should I carry out a check on someone who wears a headscarf or veil?
Individuals should be asked to show their face to check that it matches their facial image on their documents. Scarves which cover the hair need not be removed. Those conducting the check should offer the opportunity for the prospective tenant to show their face in a private area and/or in the presence of another female.
I have to use sub agents around the country to find my tenants and never see them face to face, how can I comply?
This is a very problematic area as the whole aim of the scheme is for a landlord or a delegated agent to do a quality face to face check. The 2014 Act only allows for a landlord to delegate to an agent. It does not allow for that agent then to delegate the checks and liability to yet another agent. The other alternative is that the first agent sets up a contractual relationship with the second agent in terms of the Right to Rent check. Contact the ARLA Legal Helpline 0330 124 1212 for advice.
What happens with company lets where we don’t know who the occupiers are? We let to the company who allow the current CEO etc to occupy on terms that are generally longer than three months?
In these circumstances, the agreement is with a corporate body and not directly with a ‘tenant’ (albeit the body can be a tenant). The body will have control over who may stay at the property, i.e. a form of licence and they will be the liable party. Employers already conduct right to work checks and are subject to civil penalties if it is found that they are employing illegal workers.
What happens if in Jan 2015 I take over responsibility for a property in the pilot area which is already let? If the landlord hasn’t got evidence of checks to pass to me, do I conduct checks at that point? And if he does pass evidence to me, I still won’t have seen the original myself.
It depends on whether the tenancy (letting) was agreed before or after the implementation date of 1 December. If after the implementation date, it will be the person who granted the residential tenancy who is liable for a penalty where checks were not carried out and an illegal immigrant is found living in the property. That is, the previous landlord in the circumstances set out above. Where the new landlord has no evidence that checks that should have been conducted ever were, they should conduct fresh checks on the sitting tenants/occupants.
What if I have student occupiers from overseas arriving on different dates?
A check needs to be carried out on each adult occupier. If tenants are arriving from abroad at a later date than other occupants, they will need to pass a Right to Rent check before taking up occupancy.
If I acquire a property with occupying tenants and the date that they took up their tenancy with the previous landlord precedes 1st December therefore no checks were needed, do I now need to carry out ID checks because I have acquired the property or do I need to obtain and retain evidence from them that their tenancy started prior to 1 December 2014?
No, you do not need to carry out retrospective checks on tenants. It would be best practice that you would obtain evidence and details of the existing tenancy that has been taken over.
What are the Home Office doing to inform landlords directly?
The Home Office have been working with a wide variety of partners to publicise the requirements of the scheme to landlords and tenants. Within the Minister’s implementation panel meetings ARLA has stressed the importance of raising awareness of the scheme with landlords, householders with lodgers and with tenants. The greater the number of tenants who expect checks, the easier it will be for agents to carry them out.
If I discover a prospective occupier with no right to rent in the UK and know their current address, an address that I am not responsible for, can I be liable for penalty if I do not make a report to the Home Office?
No, you would not be subject to a civil penalty for not making a report to the Home Office against an individual you have not rented to. You would only be liable for a civil penalty if you rent to a tenant where they have no right to rent in the UK (in the implementation phased area) and you knowingly did so.
How does this affect existing Housing Law? What are the implications for existing housing law in reality?
Landlords and lettings agents may wish to consider reviewing and amending the stock of contracts, terms and conditions that they use in day to day business. When updating your landlord Terms of Business don’t forget to include Right to Rent checks.
What if the landlord wants to discriminate against a prospective tenant?
Whether or not a person needs and has permission to stay in the UK and has a right to rent is a matter of fact that can be verified. Only the listed documents should be used to reach a decision. Checks should be performed without regard to race, religion or other protected characteristics or equality.
How do I know that the Home Office reference number that I have been given relates to the person in front of me? Can you give me a copy of the photo ID for the person that is the subject of the Home Office appeal?
The reference number will relate to an individual known to the Home Office and checks will be conducted against the details held on that individual. All positive results will be recorded and monitored so as to identify any instances where we suspect fraudulent activity.
If a guarantor’s visa expires mid tenancy does a check on renewal status still apply?
If the guarantor does not live in the property there is no stipulation from the Landlords Scheme perspective for the landlord to carry out a repeat check when their visa is due to expire. Though of course from a commercial angle they may want to do this – but that is your choice to mitigate against any risk. Of course if the guarantor lived in the property they would be subject to a repeat check just prior to their visa expiring.
Here at iConn we secure our tenancy deposits with the Tenancy Deposit Scheme (TDS). ARLA gives us a brief overview of the various deposit protection services available and the necessary links for more information:
The Tenancy Deposit Scheme (TDS)
The Tenancy Deposit Scheme (TDS) is an Insurance-based scheme run by an organisation called The Dispute Service and was established back in 2003 to provide independent dispute resolution and complaints handling for the lettings industry. It has been running a voluntary tenancy deposit scheme for use by regulated agents since that time and is backed by the three professional bodies for letting agents in the residential property sector, ARLA, NAEA and RICS. For more information visit the website www.tds.gb.com or call 0845 226 7837.
Tenancy Deposit Solutions Ltd (TDSL)
Tenancy Deposit Solutions Ltd (TDSL) is an Insurance-based scheme; it is a new company set up as a partnership between the National Landlords Association and Hamilton Fraser insurance brokers. For more information visit the website www.mydeposits.co.uk
The Deposit Protection Service (DPS)
The Deposit Protection Service (DPS) is the sole Custodial scheme – the running costs of this scheme are funded entirely from the interest earned on all the deposits held by the scheme. The Custodial scheme is run by Computershare who have administered similar schemes for some years in other parts of the world, particularly Australia and New Zealand. For more information visit the website www.depositprotection.com.
Countdown to Right to Rent as Home Office updates Code of Practice – iConn Property Management, Canterbury0
Rosalind Renshaw keeps us all updated with her article for Property Industry Eye;
With landlords and letting agents faced with getting to grips with Right to Rent less than a month away, the Government yesterday updated its statutory Code of Practice.
In doing so, there is still a certain amount of muddle, as the Code suggests there will not be a big bang introduction, but one that will be phased in geographically.
The Code says that the scheme will be implemented “on a phased geographical basis, and will apply to residential tenancy agreements entered on or after the date of implementation for that area”.
However, users are then directed to the Right to Rent website where it says that for tenancies starting on or after February 1, “landlords of properties throughout England should check that someone has the right to rent before letting them a property”.
This morning, a Home Office spokesperson confirmed that the reference in the Code to a phased geographical implementation is both a reference to the pilot scheme in the west midlands, where landlords – or agents acting on their behalf – have had to carry out Right to Rent checks for just over a year and also to the UK-wide roll-out. However, the spokesperson confirmed that Right to Rent goes live throughout the whole of England on February 1.
The Code also clarifies its own legal status, saying: “This is a statutory Code. This means it has been approved by the Secretary of State and laid before Parliament. The Code does not impose any legal duties on landlords, nor is it an authoritative statement of the law; only the courts can provide that.
“However, the Code can be used as evidence in legal proceedings and courts must take account of any part of the Code which may be relevant.
“Home Office officials will also have regard to this Code in administering civil penalties to landlords and their agents under the Immigration Act 2014.”
The Code is here
For any emergencies that may arise outside of normal office hours or over the Christmas/New Year period, when the office is closed, please contact the following contractors:-
For plumbing/heating/maintenance faults – Cherrywest Property Maintenance – 07568140153
For electrical faults – TS2 Contracts – 07793809322
For locks/keys – Acme Locks – 01227 785551
Happy Christmas to you all and best wishes from all at iConn Property Management
Protecting your student property over the christmas holidays – iConn Property Management, Canterbury0
Here Policy Expert offers a few pointers for students for keeping your accommodation safe this Christmas;
Whether you live in university halls or a private student property, visiting home at Christmas or Easter can leave your student digs exposed to thieves. Here’s what you need to consider before driving home for Christmas.
Although it’s important to take responsibility for your own things at university, you can still get contents insurance to cover yourself in worst-case scenarios. Some home insurance policies also cover student contents, so check with your parents’ insurance provider first. Stand-alone student contents policies are also available from some insurers. Leaflets from student insurance firms are usually circulated during the first week of term but you can also try looking online.
If you have any concerns about your security while at university, ask for advice from your parents, halls mentor or university services.
Many universities offer students the chance to take a room for just 30 weeks a year. This time period only takes term-time into account and most students return to their family home over Easter half-term, summer and Christmas holidays.
Over these holiday periods, you may be asked to completely vacate your room. This could mean removing everything from contents to furnishings depending on your contract. They’ll also ask you to clean your room. Sometimes universities rent these halls to visitors over the empty period. Therefore it’s important to make sure you check underneath and behind any furnishings for anything that may of dropped down the back.
When you pack up your things, be sure to wrap everything carefully to prevent breakages and get rid of any food-stuffs from you room and communal areas. Clean your room thoroughly using appropriate cleaning products that the university should be able to recommend or loan to you.
Holidays are also a good opportunity to get rid of things you no longer need. You may be able to give quality items to friends or donate them to local charity shops. If not, your uni or local shopping centre should provide recycling facilities. The earlier you start this process the better, don’t leave it to the last minute when there are sure to be end of term parties and nights-out to enjoy.
You may not want to take all your possessions home with you, if not – see if you university provides a secure storage facility. If they don’t have such a facility, you could try a a well-known self-storage company in the local area who uses high-quality security features. Prices may vary, but you might be able to store some of your stuff near your halls for a reasonable price.
If you’re allowed to leave items in your halls over the festive period, be sure to take valuable items like laptops, phones, cameras and jewellery home with you. Also, make sure you lock all windows and doors carefully and unplug all electrical items. If you must leave valuables behind, try to make sure they’re hidden out of sight to help avoid opportunist thefts.
After your freshman year you may want to move into a private property. Your landlord will outline how you should leave your property over holidays. Generally it’s considered best to shut off water while you’re away. You will also need to empty your fridge and throw away food that will go out of date. Cancel any regular deliveries to your house like milk and newspapers and make sure you get any other orders sent to a relative or friend’s address.
Your landlord should have bought buildings insurance (which may or may not cover the property when it’s empty). Comprehensive cover should pay out in the case of accidental damage, damage by tenants and also provide emergency home cover. Their policy may also contain a vacancy clause with regulations for how long the property can be empty for. They may have some contents insurance in place if they have furnished the property for you, however this will not cover your personal items in the house. It’s wise to buy your own contents insurance to make sure all your possessions are covered.
You can take other steps to secure your property. Tell your landlord or letting agency the dates the house will be empty and request they check up on it. Alternatively, ask a trusted friend or neighbour to keep an eye on the property wile you’re away. Automatic lights that are set on timers and burglar alarms can help deter night-time opportunists.
Yet another useful article courtesy of Property Industry Eye, detailing the various identification documents required for all new tenants:
Under Right to Rent, landlords or their agents should check identity documents for all new tenants, and take copies.
The documents include:
- a UK passport
- a European Economic Area passport or identity card
- a permanent residence card or travel document showing indefinite leave to remain
- a Home Office immigration status document
- a certificate of registration or naturalisation as a British citizen
A full list of documents is available here
Agents should bear in mind that the checks should be carried out on all, not just some, new tenants.
There are codes of practice to be followed, including guidance on avoiding unlawful discrimination which was drawn up with the assistance of the Human Rights Commission.
There are four steps involved in making a Right to Rent check:
- Check which adult tenants will live in the property as their only or main home
- Ask tenants for the original documents that show they have the right to be in the UK
- Check the documents are valid with the tenant present
- Make and keep copies of the documents and record the date you made the check
If a potential tenant has an outstanding immigration application or appeal with the Home Office, you can conduct a check on that person’s ‘right to rent’ via the Landlords Checking Service.
Landlords and agents in the pilot area (Birmingham, Dudley, Sandwell, Walsall and Wolverhampton) should continue to make the checks as they have been doing since December 1, 2014.
NEWS FLASH: Right to Rent being extended across England from February 1 – iConn Property Management, Canterbury0
Rosalind Renshaw from Property Industry Eye reveals all:
The Home Office has announced that from February 1, 2016, the Right to Rent scheme will be extended across England. This means all private landlords, or their agents, in England, including those subletting or taking in lodgers, will have to check new tenants have the right to be in the UK before renting out their property.
The scheme is being extended following an evaluation of the first phase in the West Midlands and has received the continued input of a panel of industry experts, housing and homeless charities and local authorities.
Right to Rent is one part of the government’s ongoing reforms to the immigration system to make it harder for people to live in the UK illegally.
As of February 1, anyone who rents out private property in England will need to see and make a copy of evidence that any new adult tenant has the right to rent in the UK (for example a passport or a biometric residence permit).
The process is simple, according to the Government which says many organisations in the private rented sector already check the immigration status of tenants.
In most cases, it says, checks can be carried out without contacting the Home Office. However, if a tenant has an outstanding immigration application or appeal with the Home Office, landlords can request a Home Office Right to Rent check. A yes or no answer will be provided within two working days.
Landlords who don’t make the checks could face a civil penalty of up to £3,000 per tenant if they are found to be renting out a property to someone who is in the UK illegally.
The Government is also making it easier for landlords to evict illegal migrants as part of the Immigration Bill.
Here Rightmove advise on the dos and don’ts of being a landlord:
Managing a residential lettings property means covering all the bases – a combination of common sense, practical organisation and using a letting agent who signs up to the standards of a professional body such as ARLA (Association of Residential Letting Agents).
Alongside this there are a range of basic do’s and don’ts; ARLA President, Peter Savage, highlights these below.
Notify your mortgage and insurance providers
Speak to your lender about your mortgage terms. Letting a property requires a different form of mortgage to owner-occupation and the same applies to insurance so discuss the change with your provider as buildings and contents may not be covered. It is also worth taking out insurance to protect against a tenant defaulting on rent.
Sign up to Deposit Protection
It has been a legal requirement for Assured Shorthold Tenancy deposits to be protected by a government backed scheme since 2007. For more information, visit our page Deposit Protection or go to the Communities and Local Government website.
The pros and cons of furnishings
A furnished property can be let at a higher monthly rental however if the furnishings are second-hand or ‘leftover’ it can deter prospective tenants. You also need to consider whether everything meets Furniture and Furnishing Regulations.
Pipework, appliances and flues must be maintained in safe condition. Gas appliances should be serviced in accordance with the manufacturer’s instructions. If these are not available it is recommended that they are serviced annually unless advised otherwise by a Gas Safe registered engineer.
There are also regulations governing the installation of electrical equipmentin rental properties – ensure that these are being followed and that any equipment in the property is regularly tested, as you will need to prove your property is safe.
Enlisting a managing agent to oversee the property can help you to overcome all of these hurdles, especially if you are moving away from the area. At the very least work with a lettings agent to find your tenant as this helps to make the process smoother and can ensure that your tenants have undergone checks. Select the agent carefully, always use a professional agent (such as ARLA members) to ensure client money protection thereby securing both your money – and that of your tenants’ – and access to a redress scheme should it be required.
Finally, when making decisions about letting out your home, try to remember that you are handing it over and hopefully creating an income stream. It may have been your home or that of someone else in the family but you now need to allow someone else to make their home in it me for someone else and, hopefully, an income stream for you. The chances are that accidental damage or wear-and-tearwillhappen, and tenantswillcomplain – so try and keep a clear, detached head when dealing with those kinds of issues, and don’t take it personally.
‘Letting Agent Today’ have released this informative article concerning tougher sentencing and guidelines for rogue landlords and agents:
A body representing over 370 local councils in England and Wales wants more powers to control the private rental sector, letting agents and landlords – and says magistrates should have the right to jail the worst offenders.
The Local Government Association claims that all too often the sector has been, in its words, “ripping off tenants” and says that councils’ own licensing schemes have not rooted out rogue landlords who then “have shrugged off paltry fines” when taken to court.
The LGA now wants tougher sentencing guidelines for magistrates and a wider range of penalties. It also says it backs the government’s call for a blacklist of rogue operators – but wants to know how this will be funded.
The association has put forward a series of recommendations including:
– the introduction of sentencing guidelines on housing offences as a priority to ensure consistent and appropriate fines. It also says the Housing Act could be amended to bring in a new range of penalties from a fine up to a community order or custodial sentence;
– a blacklist of persistent offenders would be useful to councils to support the issuing of licenses to landlords and other enforcement work, as long as the administrative burden and cost of compiling a list does not fall on local authorities;
– the ‘fit and proper person’ test for landlords should be strengthened to provide a clear framework to remove the uncertainty for councils and landlords and to provide a robust basis for accepting or refusing a license;
– the government should amend the notice period and compensation arrangements for Article 4 planning powers so that councils can respond effectively to local concerns over concentrations of houses in multiple occupation;
– councils should be given ‘power to direct’ surplus public land to improve the quality of the private rented sector through large scale investment.
With ten working days to go, our Property Manager Paul Lang has a very important message for all Landlords on behalf of ‘Landlord Zone':
As announced recently by Housing Minister Brandon Lewis, from October 2015 Landlords will be required by law to ensure working smoke and carbon monoxide alarms are installed in rental properties in England. The information below is intended to help you understand your responsibilities in relation to the new legislation.
Why have these changes been made?
This legislation has been proposed to address the imbalance between protection levels for private tenants in contrast to residents classed as owner occupiers, or social housing occupants.
It is estimated that the national percentage of all households with a working smoke alarm currently stands at over 90% compared with 83% in rental properties. Although a seven percent difference between the level of protection in rental properties and the national average may seem relatively minor, the numbers are much more compelling when qualified in terms of casualties. Between April 2013 and March 2014, 97 people died and 1900 were injured in domestic fires affecting properties where no smoke alarm was present.
Why do you need to install a CO detector?
The Royal Society for the Prevention of Accidents reports that there are approximately 50 deaths per year and over 1100 hospital admissions annually as a result of carbon monoxide poisoning in the UK. Carbon monoxide (CO) is a tasteless, colourless and odourless gas that is produced by incomplete combustion. A common source of CO in a domestic property would be a faulty appliance such as a boiler.
Statistics show that residents of privately rented accommodation account for a much greater proportion of annual carbon monoxide incidents than could be expected. A report by the Gas Safety Trust into carbon monoxide risks per housing sector showed that the likelihood of an incident in privately rented accommodation was significantly higher than that associated with any other housing sector. According to statistics gathered since 1998 residents of rental properties are on average three times more likely to suffer a CO related incident.
Although landlords are already obliged to have a yearly check carried out on any gas appliances, this alone cannot guarantee protection from carbon monoxide. The installation of a CO detector is quick, easy and cheap, and ensures your tenants are protected from what is often referred to as the ‘silent killer’.
Current advice from the Health and Safety Executive already states that a CO detector should be installed in rental properties, but this has always been down to the discretion of each landlord or letting agent. From October 2015 it will become law that that any high risk room, i.e. those containing a heating appliance, must have a CO detector installed.
What happens if you don’t act on these changes?
Failing to comply with the legislation planned to come into force from the 10th of October 2015 will leave you open to a penalty of up to £5000.
What does this mean for you?
As a private landlord, a professional landlord, or a letting agent, you must consider the effect this legislation will have on your portfolio.
Building regulations already require that properties constructed after June 1992 have a mains powered, interconnected smoke alarm system installed to BS5839-6 2013 Grade D. Therefore, many landlords may find their smoke alarm provision already meets the new requirements.
There has previously been no legislation requiring landlords of properties let to single family units and built prior to 1992 to have smoke alarms. However, these properties will now be subject to the new legislation, meaning smoke alarms will need to be installed by October.
HMO’s are already subject to tighter legislation in accordance to The Housing Act 2004, and the Regulatory Reform (Fire Safety) Order 2005.
It is likely, however, that Landlords of all of the above property types will need to consider their carbon monoxide detector provision in light of the new regulations.
***BANK HOLIDAY OPENING TIMES***The office of iConn will be open Saturday 29th August between the hours of 9am and 1pm and closed Sunday 30th August and Monday 31st August. We will reopen on Tuesday 1st September at 9am. Please see our website on the link below for our out of hours contact details:
Another interesting read concerning the question of tenants working from home:
Agents and residential landlords have long been concerned about tenants who work from home.
There has always been a worry that by permitting the operation of a business the landlord will inadvertently create a tenancy under the provisions of the Landlord and Tenant Act 1954 and the tenant will then gain the automatic right of renewal provided by Part II of that Act.
The Government has reacted to this concern by passing Section 35 of the Small Business, Enterprise and Employment Act 2015 [http://www.legislation.gov.uk/ukpga/2015/26/section/35/enacted].
This creates a new definition of a “Home Business Tenancy”.
This is any tenancy under which the tenant is required to occupy the rented property as a home and is also permitted to run a home business from the property.
A home business is defined as any business which can reasonably be run from home but specifically excludes any business for the sale or supply of alcohol.
Where a tenancy is a Home Business Tenancy it will automatically be excluded from the Landlord and Tenant Act 1954 and will count as a tenancy of a single dwelling for the purposes of the Housing Act 1988.
The Housing Act 1988 already permitted some home working as long as the tenancy was substantially for the purpose of providing the tenant with a home. As a result, all forms of home working will now be possible and those tenancies will fall within the Housing Act 1988.
However, that does not mean that everything is now okay.
While there may now be no issue from the landlord’s perspective in relation to home working, there are other parties to consider.
Mortgages, superior leases in flats, and insurance policies all routinely have clauses requiring home use only and prohibiting business use of the property.
Depending on how these are worded, permitting business use by the tenant, even as a home business, may not in fact be an option for landlords.
The changes also do not apply to any tenancy which exists before the new provisions come into force, which they have yet to do, or which are renewals of tenancies which existed before the provisions came into force.
Therefore, while this is a sensible change which is welcome, it will be of no effect unless it is taken up by notoriously conservative mortgage lenders and insurers. Hopefully, the Government will take steps to encourage changes in their terms to allow this in future.
* There is an interview with David Smith on the Property Tribes website in which he spells out some current concerns for the private rented sector.
Source: Rosalind Renshaw, Property Industry Eye: http://www.propertyindustryeye.com/essential-advice-is-it-okay-for-tenants-to-work-from-home/
Rosalind Renshaw from Property Industry Eye reveals all:
The Right to Rent scheme – by which landlords or their agents must check the immigration status of tenants and evict any tenant who does not have right to live in the UK – is likely to go live nationally by next April, and possibly much sooner.
There could be a phased roll-out across England from this autumn onwards.
Landlords – and presumably their agents – who do not comply face fines or prison sentences of up to five years.
The eviction of illegal tenants will be abrupt, and without having to go through court.
It would follow the issuing of a notice by the Home Office when an asylum application fails, confirming that the tenant no longer has the right to rent.
The Government is expected to enact new criminal offences as early as next month. Normally, measures enacted in September come into force the following April. However, in view of the crisis in Calais, sources say there is speculation that ministers could decide to bring implementation sharply forward.
Greg Clark, the communities secretary, said the legislation will also create a blacklist of persistent rogue landlords and letting agents to allow councils to know where to concentrate their enforcement action.
“We are determined to crack down on rogue landlords,” said Clark.
There will also be measures to prevent the letting out of sub-standard properties.
The new measure looks to be controversial.
The pilot scheme in the West Midlands has been running only since December and awaits evaluation.
In the pilot, there is no criminal penalty, with civil sanctions of up to £3,000.
Also in the pilot, landlords are able to assign Right to Rent responsibilities to their agents, and it is thought that this same system will continue in the national scheme.
The new clampdown is already raising fears that landlords and agents will simply discriminate against certain types of prospective tenants – including those with a right to live in the UK.
The Joint Council for the Welfare of Immigrants said that the pilot has shown serious shortcomings, with British people who have foreign accents finding it difficult to find somewhere to rent.
Lawyer and policy director of the Residential Landlords Asociation David Smith told the BBC’s World at One that there was evidence that landlords in the pilot were reluctant to let their properties to anyone without a valid passport.
He said: “This means that huge segments of the population, including genuine UK national who do not have passports – of whom there are many – are being excluded.”
There are also accusations that the Government is guilty of a knee-jerk reaction to the Calais crisis.
However, David Cox, managing director of ARLA, said: “ARLA believes that the measures announced by the Government today are a good first step and we welcome the proposals in principle.
“The plans will help to weed out the minority of rogue landlords who exploit vulnerable immigrants for their own financial gain and, with the introduction of a new five year imprisonment penalty, will help to deter other such unscrupulous individuals from entering the private rented sector.
“The proposals also build upon the Right to Rent checks as imposed by the Immigration Act 2014.
“We will be organising training sessions for our members to ensure they are fully prepared and understand the new rules and we urge all letting agents to ensure they are ready for the impending roll out.”
What will rising interest rates mean for the housing market? – iConn Property Management, Canterbury0
Another interesting read from Property Industry Eye:
So what will happen when interest rates rise, as Bank of England Governor Mark Carney has suggested, at around the turn of the year?
Well, putting aside that Carney has said this sort of thing before and it hasn’t happened, the effect could be imminent woe, death and destruction – or not.
The Guardian is fairly confident that the end of the world is nigh.
The housing market could collapse and “it is estate agents who have most to fear”, it says.
The paper reasons that it won’t be so much about mortgages and affordability, but about confidence.
It also predicts that lenders won’t wait until base rates rise early next year, but will start repricing their mortgages “almost immediately”.
As for borrowers, one third will struggle if interest rates rise, consumer spending will fall and there’ll be repossessions.
It all sounds like a terrifying vision of doomsday about which all of us should do something very quickly indeed – such as hand back our keys if we’re borrowers, or go into recession survival mode if we’re agents.
But here’s a mortgage broker with a more reassuring view.
Simon Tyler said rates may not rise for all borrowers, even if the base rate does increase.
“If we see a rate rise next year, those on tracker loans will be hit straight away but many other people may not be affected – at least initially.
“Competition in the mortgage sector is so intense, with so many new entrants vying for market share, that we may find that the first rate rise is hardly passed on at all by many lenders.
“Remember, most lenders’ standard variable rates are already at over 4%, which is miles above the level of the base rate at just 0.5%.
“So we may not see much movement at all, even after a rate rise.”
Long-term, Tyler is not quite so sanguine: “However, if a rate hike is passed on it is going to hurt. Household debt is so high, with so many people stretching to repay their mortgages and other credit, that any rate hike is going to be very painful and have a disproportionate impact.
“Remember, wages have barely been rising for years but many people have stretched to get on the housing ladder, often only with the aid of government assistance.
“These people may find a rate hike hard to cope with.
“House prices are unlikely to be hit very hard given that demand is still so high, but it could dampen the market a little and slow price growth in some areas.
“First-time buyers may find some areas where prices drop back a little which will help them, but at the same time they are likely to find that higher rates mean they won’t qualify for the mortgage that they want.
“As rates begin to rise you could even see a rush of people coming to buy because they fear they will miss the boat if rates increase too far, and that could even push house prices up in the short term.
“In short, raising rates will have to be a very delicate process in order not to derail the economic recovery which is actually paper thin. If they rise too fast too soon it will take away the feel good effect that people are starting to get with rising wages and push the economy backwards. Business borrowing could be hit and that would hit employment.
“The fact is that any big increase in rates is still some years away and competition among lenders should ensure that there are fantastic value deals still around for several years from now.”
And what did Carney actually say? That rate rises will be “limited and gradual” and “proceed slowly” rising to a “level in the medium terms that is perhaps half as high as historic averages”.
We suspect that most estate agents will be telling the public: “There has never been a better time to sell – or buy.”
Rightmove have published this little article giving you a few tips on protecting your property against theft during the summer months;
According to Halifax Home Insurance, opportunistic thieves ramp up their activity during spring and summer, resulting in a 10% increase in domestic burglaries and a 40% increase in outdoor thefts. One of the reasons for this is because more of us leave windows and doors open while we are out in the garden, or while we nip to the park to enjoy the sunshine.
There is also a marked increase in thefts due to larger numbers of us going on holiday and leaving our houses empty, unsecure and unguarded. We also start bringing out valuables such as bicycles and lawn furniture, and leave them outside, which then tempts would-be criminals.
To protect your property against thieves this summer, the home security specialists at Yale recommend that you try to avoid leaving expensive outdoor equipment such as barbeques lying around your garden. Wherever possible, ensure they are kept in a shed or garage, secured with a sturdy weatherproof padlock when not in use.
Love your shed
Many of us believe our garden shed contains nothing but old junk, but astonishingly, a quarter of people with a shed said it would cost more than £750 to replace the items stored in them, according to a YouGov survey commissioned by Yale.
Even more surprising then, is that the research showed that 1 in 6 people with sheds do not bother to secure them, even though it may contain high value items such as bicycles, lawnmowers and power tools.
It’s worth securing these types of items using additional padlocks or anchors and cables, which can be looped through bike wheels or lawnmower handles to provide an extra level of security if an intruder does manage to gain entry.
Bicycles are a great way to get around during the summer months. They are convenient and great exercise, but unfortunately thieves are quite fond of them too! In fact, according to the Crime in England and Wales Survey, performed by The Home Office, 53% of bicycles are stolen from a semi-private area such as a garden, garage or shed.
So to avoid becoming a victim of cycle theft always lock your bicycle to something immovable, even when it is at home in your garage or shed. Fix your bicycle to an object that it can’t be lifted over, and something that cannot be broken, cut or removed. For maximum protection use two locks of different types (a D-lock and robust chain and padlock is ideal).
Keep an eye out
The majority of garden thefts occur at night, as opportunistic burglars operate under the cover of darkness. To deter shady burglars, invest in good security lights at the front, back and side of your property.
For added protection, CCTV systems allow you to keep a careful eye on your home and its boundaries while you are away. Recorded footage can also be stored on a PC, or supplied to the police in the event of a break-in.
These few simple steps can help you to enjoy the summer months, safe in the knowledge that your home and valued possessions have been left protected.
Another relevant article courtesy of Property Industry Eye;
A new online tool has been launched, aimed at making rented homes safe and legally compliant.
The ‘safe and secure’ toolkit, which features a clickable house icon, has been launched by the Residential Landlords Association.
Advice includes how best to ensure gas, electrical and fire safety, as well as information on how to prevent damp and mould, improving the energy efficiency of a property and how to prevent trips and falls around the house.
Each part of the house, when clicked on, provides details of the legal requirements for a landlord and information on the likely cost of fitting safety features such as window safety locks, carbon monoxide detectors, and fire alarms.
It also includes a simple, easy to understand checklist about features a landlord should check regularly.
According to the most recent English Housing Survey, 16% of private rented sector properties have at least one hazard that means the home fails the minimum safety standards expected of them.
Alan Ward, chairman of the RLA, said: “Providing a safe, legal and secure home should be the first duty of any landlord to their tenant.
“Whilst the vast majority of homes to rent meet the legal standards required of them, we must do all we can to support landlords to address hazards quickly when they arise.
“The reality is that there are a large number of legal requirements expected of rented homes.
“The problem is not a lack of law but of enforcing these requirements and ensuring landlords understand the complexities of renting homes out.”
The toolkit is here