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UK govt announces new measures for residential lettings sector
New measures are being introduced in the UK that will create a bigger, better private rented sector for tenants and landlords aimed at getting rid of rogue operators. There are more than 4.4 million households renting privately in the UK and Housing Minister Brandon Lewis said the measures that will ensure tenants know their rights and where to go if they have a problem in their home. He explained that these changes aim to root out the small minority of rogue operators who shirk their responsibilities and make people’s lives a misery without hampering the efforts of the vast majority of landlords who are diligent and responsible. But they also aim to avoid strangling the industry in red tape which would deter much needed investment, increase rent and reduce choice for tenants. ‘We’re determined to create a bigger, better private rented sector that meets the needs of tenants and landlords well into the future, and encourages investment along the way. The measures we’ve taken give tenants the information and confidence they need to rent, allows the vast majority of landlords to provide a good service to continue doing so and are enabling developers to build specifically for private rent,’ said Lewis. ‘But they also mean we’re also rooting out the minority of rogue landlords who blight the lives of their tenants, providing peace of mind for people seeking a place to call home,’ he added. A new guide for tenants has been published so they know what to look out for when renting a home. The guide makes clear the standards people should expect and the signs of a poorly managed property. This includes testing that windows and doors can lock properly, how to recognise potential health hazards like damp and mould, and to check the temperature of the property and what heating is available. This comes on top of new measures announced a few days ago in which landlords will be required by law to install working smoke and carbon monoxide alarms in their properties. From October, anyone renting out a property will be required to install smoke alarms on every floor, and carbon monoxide alarms in high risk rooms. Councils can also benefit from revised guidance on dealing with rogue landlords in their area. In particular, the new guidance gives advice on building up an effective case in court, demonstrating how a rogue landlord has caused misery for their tenants, to ensure the full effect of their poor practices can be revealed. The guidance also covers new rules which require letting agents to belong to one of three approved redress schemes so people have somewhere to go if they have a complaint, and how to successfully prosecute a bad letting agent. New laws currently before parliament will also end so-called ‘retaliatory evictions’, giving tenants greater security, and will require letting agents to publish full details of the fees they charge tenants so people can know what to expect to pay. Continue reading
Property stamp duty revenues up over 20% in England and Wales
Stamp duty revenues in England and Wales raised on residential properties are projected to have risen by over 20% in 2014/2015 to a record £8 billion, according to new research. Three quarters of all home buyers are liable to pay stamp duty, ranging from nearly all sales in London to around half in northern England and Wales, says the study from the Halifax. London’s share of all revenue raised in the UK increased from 28% in 2006/2007 to 42% in 2013/2014 and two thirds of all first time buyer purchases in London are above £250,000 compared with only 1% to 2% in many regions. The research also suggests that there is no evidence so far of a dampening in activity at the very top end of the market following the recent reform of stamp duty. The Halifax estimates that the increase in revenues from stamp duty on residential sales from £6.45 billion in 2013/2014 to a record £8 billion comfortably exceeds the previous high of £6.68 billion at the peak of the last housing market boom in 2007/2008. This is more than a 15 times as much as the £520 million raised by residential stamp duty 20 years ago’ in 1994/1995. Under the new progressive structure of stamp duty introduced at the beginning of December 2014, no tax is paid on any of the value of a property below the starting threshold of £125,000. Above the first threshold, tax is charged at the relevant rate on the amount by which the selling price exceeds the threshold. This is continued through the various thresholds to the top rate. Based on the current average house price in England and Wales of£259,708, a typical home buyer pays a total of £2,985 in stamp duty. Under the old flat structure, a buyer paying this price would have been subject to stamp duty payments of £7,791, a saving of £4,806. In all regions, buyers are often making large savings. In cash terms the largest savings are in London at £4,830 and the South East at £3,843. The ‘tipping point’ price is £938,000, at which point the buyer is worse off under the new structure. The Halifax says that while it remains very early days, so far there are no signs of any marked changes in behaviour as a result of the changes made to stamp duty at the start of December. Indeed, the proportions of all sales in each of the bandings in December 2014 and January 2015 are almost identical to those in the preceding three months of September to November 2014. This equally applies at the top end of the market where the proportion of sales in London above £925,000 is unchanged at 9%, suggesting that the increase in stamp duty on such sales is not significantly deterring purchases in this market segment. Continue reading
Second phase of UK custom build fund announced
The second phase of a multi-million pound fund to help aspiring custom and self builders in the UK get their projects off the ground more quickly has been announced. The second phase of the £150 million fund is now open to bidders and will create up to 10,000 so-called ‘serviced plots’ which is land prepared for house building and connected to utilities such as gas and water, so builders can go straight in and build. According to Housing Minister Brandon Lewis the average self build takes two years but those using serviced plots can cut this by up to a year and he believes it will help further unlock the massive potential the custom build industry has to expand. The custom and self build industry currently accounts for around 10,000 new homes every year but the government is backing industry led efforts to double that by 2020. The £150 million fund is open to small builders and community groups as short term loans to help get the land ready for housebuilding. The land can then be sold as individual plots to people looking to build their own home. Lewis said he was determined to ensure as many people as possible could fulfil their custom build ambitions so he has given the green light for the first three bids to proceed to the next stage of assessment. Subject to successful completion three small builders in St Helens, South Norfolk and West Lindsey will receive a share of £850,000 to help provide 41 plots. ‘Custom build should not be something that’s confined to a small and select group of people. Anyone who aspires to build their own home should have the opportunity to do so. We want to see the industry grow significantly and this £150 million fund will help further unlock the massive potential it has to help even more people achieve their ambitions,’ said Lewis. ‘This fund will help create shovel ready serviced plots so small developers and custom builders can get on and build, finishing their projects more quickly,’ he added. Continue reading
