Tag Archives: power
UK govt moves to end blanket licensing of landlords by councils
Local councils in England will no longer be able to licence landlords across a whole area without government approval, it has been confirmed. Housing and planning minister Brandon Lewis has taken action after a rush of complaints about councils introducing compulsory licensing for landlords costing hundreds of pounds per property. Reforms to the Selective Licensing scheme will now restrict local decision making powers from 01 April. Councils will need government approval before implementing a licensing scheme if they plan to license a large area or proportion of the market, likely to be above 20% of either the geographical area covered by the council or the local private rented sector (PRS). The decision comes after sustained lobbying efforts by the National Landlord Association (NLA) since 2010 and after the NLA published its report on the state of landlord licensing across the country, in February. The report revealed a boom in the number of blanket licensing schemes since 2010 but highlighted a lack of enforcement actions being taken by local councils. It also showed a correlation between the political control of a council and their tendency to license landlords. ‘We’ve argued solidly since 2010 that councils have been abusing their power to push through blanket licensing schemes,’ said Richard Lambert, NLA chief executive officer. He explained that the announcement means that if a council intends to licence a large proportion of its housing it will first need to show the case stands up to independent scrutiny. ‘The government was the first to see a copy of our licensing report, and we’re delighted they have listened to our case because at present the driving force behind licensing landlords seems to be the political will of a given local council, regardless of the evidence,’ he pointed out. ‘Many local councils won’t like this decision one bit because until now they’ve been their own judges, and the only way for landlords to challenge them has been through the difficult and complex route of judicial review,’ he said. ‘Landlords are getting fed up with being unfairly targeted and made responsible for problems such as anti-social behaviour when in reality they have little effective control over the issue, except by eviction. Hopefully this now means that councils who are serious about tackling poor property standards and anti-social behaviour will first look to the extensive existing legal powers they already have to combat the issues,’ he added. Continue reading
UK govt launches consultation on Bank of England powers in the housing market
The UK government is inviting responses to a consultation on which powers the independent Bank of England should have over the country’s housing market. The Chancellor George Osborne has already announced that he was determined to work with the Bank to ensure that they had appropriate powers over the UK housing market to maintain its stability. Earlier this month, the Bank requested a range of powers including the ability to set a debt to income ratio for mortgages and control loan to value ratios. Currently, the Bank can only recommend that such a limit is put in place. The power to put in place these limits lies with the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). So the government is launching a consultation today on whether the Financial Policy Committee (FPC) should have the power to directly control these limits for macro-prudential purposes. The consultation will run from 30 October to 28 November 2014 and the powers that the Bank is requesting are commonly held by its counterparts in other countries. For example, loan to value controls are used extensively in countries including Canada, New Zealand and Norway, while both the Hong Kong and South Korea have used debt to income ratios too, which has proved particularly successful. The consultation document states that the government is proposing that the Bank is granted powers of direction for loan to value limits and debt to income limits for owner-occupied mortgages. The government is particularly interested to hear what consumers and the industry feels is an appropriate definition of debt for these purposes. The government intends to consult separately in 2015 on the Bank’s recommendations for it to have new powers over the buy to let market, with a view to building an in-depth evidence base on how the operation of the UK buy to let housing market may carry risks to financial stability. ‘Ensuring the stability of the UK housing market is a crucial part of this government’s long term economic plan, and I have been clear that the independent Bank of England should have the tools it needs to do this,’ said Osborne. ‘That’s why the government is consulting on this issue, to ensure that we can bring forward appropriate legislation to give the Bank the powers it needs. The government already works closely with the Bank to ensure the ongoing stability of the UK housing market,’ he pointed out. He added that in June, the Bank issued a recommendation over mortgage lending limits, with new regulations introduced earlier this month capping the number of loans above 4.5 times income which banks can offer. Continue reading
Referendum decision set to boost Scotland’s commercial property markets
The No vote in the Scottish referendum has lifted an uncertainty for commercial property markets for businesses on both sides of the border, according to real estate firms. However, according to Walter Boettcher, director of research and forecasting with global commercial real estate services firm Colliers International, while the No vote might suggest that little has changed, in reality it may be the beginnings of a fundamental shift UK wide between local governments and central government. He believes that the referendum has highlighted how a new balance of local and central powers and decision making must evolve to accommodate local aspirations and perceptions of economic opportunity. Regions must have the power to determine their own economic strategies and exploit what they see as their own competitive advantages. ‘Scotland will remain part of the United Kingdom, but it will be a Scotland that will join in unison with other UK regions who have also been seeking greater self-determination in regional policy making,’ he said. ‘From a narrow business perspective, economic and financial confidence has perhaps regained its balance and this will drive higher levels of activity as pent up demand and projects shelved temporarily will be dusted off and pushed through. Certainly property sector leasing and investment transactions both north and south of the border will see a decisive boost,’ he explained. ‘From a broader strategic business perspective, given international appetite for infrastructural development by sovereign wealth funds in a very low interest rate environment, the opportunity for commercial real estate investment and development is staggering and may sustain activity levels well beyond the normal limits of traditional property cycles,’ he added. Overall the result should provide a welcome boost to Scotland’s property market, according to Alasdair Humphery, lead director for JLL in Scotland. ‘Uncertainty surrounding the possible outcome of the referendum has undoubtedly been a factor in the decision making process for many potential occupiers and investors, although some will continue to hold back commitments until there is a clear indication of what that result means for Scotland and wider United Kingdom,’ he said. ‘Following the result, I am optimistic we’ll see more confidence returning to the market and an increase in activity from international occupiers, some of whom had previously been reluctant to progress expansion plans,’ he added. He pointed out that the constitutional and fiscal changes that will occur if Scotland is granted devo max are at this early stage an unknown quantity. ‘We will clearly be keeping a close eye on proposals for further devolution of powers, and what these might mean for our clients not only in Scotland but across the UK. However, the devil is in the detail, and much of this detail has yet to be worked out,’ he said. ‘We’ll be monitoring developments over the coming months to form a better sense of what the Scottish property market will look like for our clients and how we can best… Continue reading
