Property investment clubs to be more closely regulated reveals FCA

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The Financial Conduct Authority (FCA) has launched proposals that aim to better protect consumers when using financial services including property investment clubs.

Its consultation sets out ways to tackle the causes of harmful practices, with suggested rules to raise industry standards by putting the emphasis on firms to get products and services right in the first place.

Under a new Consumer Duty, firms will have to provide information they can understand, offer products and services that are fit for purpose and provide helpful customer service.

However, while the FCA’s remit covers property investment clubs – either collective investment schemes or alternative investment funds – which allow people to pool resources and invest in property often linked to developers, it does not cover unregulated property training companies and education programmes.

The FCA’s Consumer Duty proposals hope to bring about a fairer, more consumer‑focused and level playing field in which firms consistently put their customers’ interests at the centre of their businesses.

The FCA has also published draft guidance to help them prepare before it is introduced. 

Sheldon Mills (pictured), executive director of consumers and competition at the FCA, says that too often, consumers are not given the information they need to make good decisions and are sold products or services that don’t offer the benefits they might expect.

“We want to change that. We’ve been working to set a higher standard for firms, to put more of the onus on them to act in their customers’ interests and get their products and services right,” adds Mills, who says it will hold senior managers accountable if they don’t.

“The duty will also help create an environment for healthy competition between firms, encouraging them to be innovative in developing products and services that meet consumers’ needs.”

The consultation is open until 15th February and final rules are expected to be announced by July.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Property investment clubs to be more closely regulated reveals FCA | LandlordZONE.

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Tenants in arrears are falling further behind

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Average rent debts still owed by renters as a result of the pandemic have increased by 41% since May according to new research. A survey of over 2,000 private renters in England and Wales by research consultancy Dynata for the NRLA found that average COVID related rent arrears owed by affected tenants had increased to £1,270

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Bristol, Oxford and Cambridge best cities to invest in for 2022

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Aldermore’s Buy to Let City Tracker1, has named Bristol, Oxford and Cambridge as the best cities for landlords to invest in for 2022.

The Tracker analyses and assesses five key indicators that impact buy to let desirability: average total rent

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My latest UK Property Investment Deal

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See my new UK property investment deal and discover how you can apply this investing in property strategy in 2022.

In this video below, I share my latest Property Investment Deal secured with group funding.

Discover what this deal is all about and how you can find similar opportunities in 2022.

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LATEST: MPs launch probe into exempt accommodation sector and its landlords

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Birmingham Council’s report on its broken exempt accommodation sector has prompted a government inquiry.

The Levelling Up, Housing and Communities (LUHC) Committee is to investigate non-commissioned and unregulated supported housing around the UK and is calling for evidence.

Committee chair Clive Betts (pictured0 says he was concerned to hear about the problem from political leaders in the West Midlands, among others, where unscrupulous landlords were failing to provide the support and care that vulnerable tenants need, or to maintain their properties.

He adds: “When provided at a decent standard and with proper support, exempt accommodation can be a lifeline for extremely vulnerable people and a vital piece of the social housing landscape.

“But in the hands of neglectful landlords, pocketing taxpayer money to provide this housing, this accommodation can fall woefully short of the support that’s needed.”

Landlords are paid to provide support and care for tenants who include ex-prisoners, addicts, rough sleepers and fleeing survivors of domestic abuse – but this only has to be more than minimal to meet regulations.

Costs are met through Housing Benefit, with local authorities recovering some or all of the costs from the Department for Work and Pensions.

Curent model

The inquiry aims to study issues including whether the current model represents value for money, along with geographical and regional differences in the provision and whether a provider is registered or non-registered, commissioned or non-commissioned has an impact.

There were 153,701 households in exempt accommodation in England in May, an increase of 61.5% since 2016. The Regulator of Social Housing has already issued non-compliant regulatory judgements or notices against 13 providers and by July, this included three of the seven largest exempt accommodation providers in Birmingham, with three more providers subject to further review.

A council report revealed how a lack of regulatory powers in the city has led to soaring numbers of properties, prompting complaints about anti-social behaviour, drug use and safeguarding issues.

The closing date for submissions to the inquiry is 28th January. 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: MPs launch probe into exempt accommodation sector and its landlords | LandlordZONE.

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EXCLUSIVE: Landlord wins court battle with agency over ‘nightmare’ eviction

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The former director of a London lettings agency has been ordered to pay more than £50,000 in rent arrears and compensation after a court found in favour of a landlord who’s spent nearly two years trying to evict squatters.

Kirk Thompson, who founded London Residential in Camden, along with his partner Brittany Thompson must pay £48,750 in arrears and £4,274 in ‘mesne’ profits – damages for trespass by illegal occupants who are not tenants – along with £1,818 in costs following a hearing at the County Court at Central London.

In January, LandlordZONE reported that landlord Max Christian, from Stockport, signed up his three-bedroom North London flat (pictured) with London Residential in March 2019 but only received the first quarter’s rent.

His nightmare began later that year when he discovered the original tenants had moved out and one of the letting agent’s employees had moved in. 

He managed to get them out and was about to sell the flat when new squatters appeared and high-security locks were installed.

London Residential, which was acquired by London estate agent Chestertons last month, then rang to suggest he use them instead to sell the flat, as nobody else could access it. 

Complicated

Christian handed the firm a Section 8 with the help of Landlord Action, but the situation was complicated by the fact that the tenancy is in Thompson’s name, who lives in the States. London Residential disputed the claims and said it had never been in control of anyone living at the property.

The firm insisted that Christian had illegally tried to evict legitimate tenants but the judge dismissed the claims and he was granted a possession order. It’s now in the queue to be executed by bailiffs while high court enforcement officers are also ready to evict the squatters.

“It’s taken me months to get a reliable written judgement but I’m glad it’s been finalised,” he tells LandlordZONE. “I’m just hoping that the people living there don’t play the Covid card – and I expect the flat will be trashed too.”

Christian plans to sell the property as soon as possible, as he’s now another £9,250 out of pocket. “It’s a hollow victory,” he adds. “I’m sure I won’t get that money back.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Landlord wins court battle with agency over ‘nightmare’ eviction | LandlordZONE.

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November house prices up 8.2% year-on-year

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The latest Halifax House Price Index for November is showing annual price inflation at 8.2%, a monthly increase of 1% and the new UK average house value standing at £272,992.

The average house price in Wales has broken the £200k barrier for the first time at £204,148.

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Ground rent reform – a sledgehammer to crack the wrong nut

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This week, the House of Lords will scrutinise the Leasehold Reform (Ground Rent) Bill 2021-22. When enacted it will impose onerous penalties and yet it signally fails to tackle what most MPs and the public think is its main purpose.

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EXCLUSIVE: Vast majority of selective licensing schemes run by Labour councils

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Councils around the UK are prepared to lose money running ‘polticial’ licensing schemes in their bid to get tough on landlords, new research shows.

Labour councils are also much more likely to push for registration and enforcement, says geospatial technology firm Kamma, which found that motivations were strongly political.

Out of the 58 active selective licensing schemes in England, 39 are in areas controlled by Labour councils compared to just seven run by Conservatives.

CEO Orla Shields says 2021 was another busy year for those regulating the property market with more legislation and more enforcement than ever before.

“While some see discretionary licensing schemes as just another way for authorities to tax landlords, our feedback from councils is that it actually costs them more to run these schemes than they recoup,” she tells LandlordZONE.

“Setting up a scheme then, is born out of strong motivation to raise standards and comes at some cost to limited council budgets.” 

There were 47 new schemes and consultations in 2021, with 12 actually launching this year, and five more scheduled to launch in 2022.

But a few schemes have begun to falter, some impacted by Covid or funding cuts; Southend recently deferred its scheme until next year, while others in Wakefield, Luton, Croydon and Hastings have all stalled or been rejected. Scarborough expressed fears that ministers had gone cold on selective licensing after a year-long wait to get approval for its new plans.

“Whilst some schemes were rejected by the previous Minister for Housing Robert Jenrick we don’t yet know how Michael Gove’s Department for Levelling Up, Housing & Communities will act,” says Shields. “It is a more radical brief, so 2022 looks set to be yet another year of change for property regulation.” 

Kamma reports that although there are no major geographic trends, London is particularly active. Lambeth, Westminster and Newham all kicked off new schemes or consultations this year while Southwark and Lewisham both have schemes scheduled for 2022.

Read more about selective licensing costs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Vast majority of selective licensing schemes run by Labour councils | LandlordZONE.

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Selective licensing schemes most popular with Labour councils and ‘lose money’

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Councils around the UK are prepared to lose money running ‘polticial’ licensing schemes in their bid to get tough on landlords, new research shows.

Labour councils are also much more likely to push for registration and enforcement, says geospatial technology firm Kamma, which found that motivations were strongly political.

Out of the 58 active selective licensing schemes in England, 39 are in areas controlled by Labour councils compared to just seven run by Conservatives.

CEO Orla Shields says 2021 was another busy year for those regulating the property market with more legislation and more enforcement than ever before.

“While some see discretionary licensing schemes as just another way for authorities to tax landlords, our feedback from councils is that it actually costs them more to run these schemes than they recoup,” she tells LandlordZONE.

“Setting up a scheme then, is born out of strong motivation to raise standards and comes at some cost to limited council budgets.” 

There were 47 new schemes and consultations in 2021, with 12 actually launching this year, and five more scheduled to launch in 2022.

But a few schemes have begun to falter, some impacted by Covid or funding cuts; Southend recently deferred its scheme until next year, while others in Wakefield, Luton, Croydon and Hastings have all stalled or been rejected. Scarborough expressed fears that ministers had gone cold on selective licensing after a year-long wait to get approval for its new plans.

“Whilst some schemes were rejected by the previous Minister for Housing Robert Jenrick we don’t yet know how Michael Gove’s Department for Levelling Up, Housing & Communities will act,” says Shields. “It is a more radical brief, so 2022 looks set to be yet another year of change for property regulation.” 

Kamma reports that although there are no major geographic trends, London is particularly active. Lambeth, Westminster and Newham all kicked off new schemes or consultations this year while Southwark and Lewisham both have schemes scheduled for 2022.

Read more about selective licensing costs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Selective licensing schemes most popular with Labour councils and ‘lose money’ | LandlordZONE.

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