Grenfell: Phase One of inquiry report published

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The Phase One report of the Grenfell Tower fire inquiry has been published. The report states that the reason the fire spread so quickly to the whole building was due to Aluminum Composite Material (ACM) cladding. The Phase One report looked into established exactly what happened in the early hours of 14th June 2017, and […]

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RICS fine Countrywide £100,000 over client money security

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Yesterday the 30th October Countrywide Residential Lettings Nottingham faced a RICS Disciplinary Panel Hearing to defend the following charges:

“Between 2008 and 2018, the Firm transferred a sum of £10,093,866 of client funds, representing unclaimed and unidentified client balances that had not been claimed for six years or more

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New Electrical safety standards for England

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Electrical Safety:

ARLA propertymark
reminds us that the Commencement Order in Sections 122 and 123 of the
Housing and Planning Act 2016 (electrical safety standards) came into
force on 25 October 2019. This means that mandatory electrical safety
checks in the private rented sector in England regulations will be
implemented very soon.

The Housing and
Planning Act 2016, under Section 122, contains an enabling power to
allow the Secretary of State, through regulations, to impose duties
on private landlords ensuring that electrical safety standards are
met.

The frequency of checks and the qualifications for those electricians carrying them out, as well as penalties for breaches and an appeals process, are all likely to be specified soon.

However, with a general election now in progress it is likely to be the New Year before action is taken.

A working group of interested parties, including ARLA Propertymark, other industry representatives and landlord bodies, electrical and tenant bodies, have provided recommendations to government on the proposed requirements for electrical safety in the private rented sector (PRS).

Here is a summary of
the Electrical Safety Working Group recommendations provided by ARLA
Propertymark:

Recommendation 1:
Five yearly mandatory electrical installation checks should be set
out in secondary legislation.

Recommendation 2:
Visual checks of the safety of the electrical installation by
landlords at a change of tenancy should be encouraged as good
practice and set out in guidance.

Recommendation 3:
A report should be issued to the landlord which confirms that an EICR
has been completed along with confirmation that any remedial work
necessary has been undertaken satisfactorily. A copy should be issued
to the tenant at the beginning of the tenancy and should be made
available to local authorities on request.

Recommendation 4:
Landlord supplied electrical appliance testing and visual checks of
electrical appliances by landlords at a change of tenancy should be
encouraged as good practice and set out in guidance.

Recommendation 5:
The installation of Residual Current Devices (RCDs) by landlords
should be encouraged as good practice and set out in guidance.

Recommendation 6:
A Private Rented Sector electrical testing competent person’s
scheme should be set up which would be separate from existing
Building Regulations competent person’s scheme.

Recommendation 7:
DCLG should commission the Electrotechnical Assessment Specification
(EAS) management committee to consider the most effective method of
recognising ‘competent PRS testers’ to carry out electrical
inspections and tests.

Recommendation 8:
Legislative requirements should be phased in, beginning with new
tenancies, followed by all existing tenancies.

It is anticipated that the eventual regulations will follow closely these recommendations, so all PRS landlords should consider these and make plans to comply as soon as possible.

Electrical safety in the private rented sector

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Scariest property price drops

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The UK’s worst Halloween house price drops and the cost of buying with a Halloween road name

The latest research by national fast sale estate agent, Springbok Properties, has looked at where UK homeowners are in for the biggest fright this Halloween when it comes to the value change in their property since last year

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A positive vision for the PRS

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Too much attention is given to the idea that the sector is a problem which requires management. Instead the Residential Landlords Association argues that what is needed is a positive, ambitious programme for the sector which supports tenants and good landlords whilst rooting out the crooks who have no place in the sector.

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#ExpertView, RLA Chairman Alan Ward on DepositGuard Custodial

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The RLA has always understood the challenges faced by landlords and is proactive in doing all it can to support members with the tools they need to do the right thing. Therefore, the RLA and TDS have joined forces once again to create a free, custodial tenancy deposit option for RLA landlords called DepositGuard Custodial.  […]

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Modest UK house price growth in October

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Annual house price growth remained subdued at 0.4% while October saw a modest 0.2% rise month-on-month, after taking account of seasonal factors.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“Annual house price growth remained below 1% for the 11th month in a row in October

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RLA election manifesto: a positive vision for the PRS

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With a General Election set for December 12, the RLA has published a six-point manifesto unveiling a positive vision for the private rented sector. Too much attention is given to the idea that the sector is a problem which requires management. Instead the RLA argues that what is needed is a positive, ambitious programme for […]

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First-time buyer sales hit 7 month high

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NAEA Propertymark has now released its September Housing Report and the number of sales made to First-time buyers increased in September, to 30%. This is the highest figure seen since February.

Year on year, this is an increase of 36 percentage points from September 2018 when it stood at 22%.

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RLA research says rent controls will hurt tenants

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Rent Controls:

The controversial issue of rent controls, as proposed by Labour and the Mayor of London, divide opinion in both the tenant and the landlord communities. Most landlords are against, while for tenants its often a tempting prospect.

However, according to a round-up of research by the Residential Landlords Association (RLA), rent controls hurt tenants by drying up the supply of homes to rent and in the long run, in many cases by actually increasing rents.

The Mayor of London is calling for the power to introduce rent controls across the capital. This, according to evidence sourced by the RLA, would have a negative impact on tenants. The RLA’s analysis of existing research from around the world it says reveals the harm they can cause. And it gives specific examples:

·
Forms
of rent control exist in Los Angeles and San Francisco. A paper for
the California Budget and Policy Centre has reported that renters are
“substantially more likely to struggle with housing affordability
than homeowners.” It goes on to note that: “More than half of
renter households paid over 30% of income toward housing in 2017, and
more than a quarter were severely cost-burdened, paying more than
half of household income toward housing costs.” A further paper for
the National Bureau of Economic Research has found that in San
Francisco, landlords affected by rent control reduced rental housing
supply by 15 per cent.

·
Research for the
National Multi Housing Council in the United States warns that rent
control and rent stabilisation laws “lead to a reduction in the
available supply of rental housing in a community, particularly
through the conversion to ownership of controlled buildings.”

·
A document prepared for
the European Commission has warned that rent controls “appear to
have a significant destabilizing impact on the aggregate housing
market, increasing the volatility of house prices when confronted
with different shocks.” It goes on to note: “The drawbacks of
rent controls in terms of unintended consequences for housing market
stability and negative effects on labour mobility would advise
against their use for redistribution purpose”.

·
In 2015, a rent control
mechanism was introduced across Germany. The research cites evidence
showing that between 2015 and 2017 rents in central Berlin increased
by almost 10 per cent. Before the introduction of the control they
had been rising by just one to two per cent each year. Research by
the German Institute for Economic Research has concluded: “Contrary
to the expectations of the policy makers, the rental brake has, at
best, no impact in the short run. At worst, it even accelerates rent
increases both in municipalities subject to the rental brake and in
neighbouring areas.”

·
In Italy, a paper for
the Centre for the Analysis of Public Policies notes that the private
supply of rental homes fell dramatically after a law regulating rent
levels was introduced in 1978. A further paper has found that in
Italy between 1998 and 2008, market rents increased by 57 per cent
compared to a growth in household income of 31 per cent.

·
In Sweden, a report by
the International Monetary Fund this year concluded: “Tackling
Sweden’s dysfunctional housing market requires reforms of rent
controls, tax policies, and construction regulation. In addition to
fully liberalizing rents of newly constructed apartments, there is a
need to phase out existing controls, such as by applying market rents
when there is a change in tenant.”

A
senior academic has warned the Greater London Assembly that the
Mayor’s proposals for rent controls would have “really dramatic
unintended consequences,” the RLA says of Kath Scanlon’s
intervention.

Addressing
the Assembly’s Budget and Performance committee, Kath Scanlon,
assistant professorial research fellow at the London School of
Economics, argued that: “Landlords would simply decide they were no
longer going to rent their properties.”

Further,
The Centre for Cities warned earlier this year that: “Rather than
helping make London open to everyone, strict rent control would close
off London to new residents and divide the city’s renters into
winners and losers.”

David
Smith, Policy Director for the Residential Landlords Association, has
said:

“This
research shows clearly that rent controls are not a panacea for
tenants. Far from making renting cheaper, experience around the world
shows it can make it more expensive and more difficult for those
looking for a home to rent.

“Rather
than resorting to simplistic and populist ideas which have shown
themselves to fail, the Mayor should instead work with the vast
majority of private landlords doing a good job to see what is needed
to stimulate the delivery of more homes to rent. Increasing supply is
by far the most effective way of keeping rents down.”

The
RLA PEARL research
paper
can be accessed here:
https://www.rla.org.uk/rent-controls-report.

Kath Scanlon’s comments are available here can be found here

The comments from the Centre for Cities can be accessed here

The government mulls the return of rent controls

London Mayor Sadiq Khan favours rent controls in re-election bid

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