TSI
Consultation launched in Scotland on tenancy reform
The Scottish Government has launched its consultation on tenancy reform, the first major overhaul of tenancy legislation in the private rented sector for 25 years. The New Tenancy for the Private Sector consultation aims to give tenants a greater sense of security, and provides appropriate safeguards for landlords, lenders and investors. Through the proposals landlords must offer a minimum tenancy of six months and the Notice to Quit will be linked to how long the tenant has lived in the property. It is part of the Scottish Government’s commitment to reform the private rented sector tenancy by enabling more effective regulation, applying tougher enforcement and attracting new investment. The document will consult on proposals to modernise the reasons a landlord can use to get back possession of their property; to enable tenants to stay in their home at the end of their lease unless one of the new reasons above occur; and introduce longer notice periods for landlords and tenants. It will also explore issues relating to rent levels. ‘If tenants have more security in their tenure, they may feel more confident in asserting their rights and flagging any concerns about their rented property without fear of eviction. In addition to this if tenants know they can only be asked to leave their home on certain specified grounds they will have a greater feeling of security,’ said Housing Minister Margaret Burgess. ‘But equally a new tenancy system provides an opportunity to improve the private rented sector for landlords. We can tackle some of the long standing issues they face, like problems around recovering the possession of their property and rent arrears. These changes could give landlords more reassurance in the system,’ she explained. ‘Housing is a priority for this Government which is why we are consulting on these proposals to make sure our private rented sector is a strong as it can be. Our vision is for Scotland’s private rented sector to be an attractive and affordable housing option for anyone who wishes to live in it,’ she pointed out. ‘Reforming the tenancy system is an important part of achieving this vision. By creating a new and simplified system we will have better property management, while tenants and landlords will be provided with more clarity and understanding of what the tenancy agreement means for them,’ she added. However the National Landlords Association (NLA) is questioning the viability of some of the proposals. The NLA is concerned that if implemented as proposed, there is a significant risk of undermining the private rented sector, and of exacerbating the housing crisis Scotland is currently facing. As the proposals will affect all landlords, letting agents and tenants in Scotland the NLA urges all involved to submit their views to the Scottish Government. ‘The consultation raises some interesting ideas for reform, but the Scottish Government seems to be considering worrying changes that would only undermine the private rented sector at a time when its role in housing provision has never been more important,’ said Richard Lambert, NLA… Continue reading
RICS latest monthly survey confirms house price growth is slowing in the UK
House price growth in the UK has slowed back to levels last seen over a year ago as demand slips for the third month in a row, according to the latest monthly report from surveyors. The Royal Institution of Chartered Surveyors (RICS) says that house price momentum has slowed to June 2013 levels and greater caution appears to be being exercised across the UK housing market. Just a day ago the Halifax signalled a similar trend as its monthly index showed that UK house prices fell 0.6% in September and quarterly grow rates have also slowed. Nationally, according to RICS, new buyer demand slipped for the third consecutive month and in London, caution took a particular toll with prospective new buyer demand seeing its fifth consecutive monthly decline, a trend not seen since April 2012. In Scotland, the effects of the referendum on independence appeared particularly significant, with a net balance of 6% more surveyors reporting a drop in the number of interested buyers compared to a net balance of 49% seeing more interest in August. Meanwhile, stock coming onto the market remained virtually unchanged in September at a net balance of -1%, which led to a number of surveyors reporting a 'return to more sensible prices', as properties staying on the market for longer were now beginning to receive offers below asking price. Probably in response to political rhetoric around Mansion Tax, the survey showed a drop in 12 month member price expectations for larger properties of three and four or more bedrooms, which have fallen since the start of the year to 2.2% and is down from 3.8% at the start of the year for three bedroom properties and 2% for four or more bedroom properties, down from 3.5% at the start of the year. At a national level, the slowdown in buyer activity stands in contrast to the lettings market, where demand has continued to grow solidly across the majority of the UK, despite new instructions to let not keeping pace with the rise in tenant demand. However, despite market conditions, surveyor expectations for price growth over the coming three months remain positive with only surveyors in London expecting to see values decrease and prices across the rest of the UK still expected to rise by on average 2.1% over the year. ‘Demand and supply are looking a little more balanced, which is removing some of the upward pressure in prices, particularly in London,’ said Simon Rubinsohn, RICS chief economist. ‘This is a healthy development. Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates,’ he explained. ‘However ideally, more supply should be coming onto the market, but with interest rates still at historically low levels and long term house price expectations positive, households are not under any real… Continue reading
Technology could help combat mortgage fraud, it is claimed
Half of UK mortgage brokers believe greater use of technology by lenders when carrying out due diligence on borrowers would reduce mortgage fraud, according to new research. Lying about occupancy to gain a mortgage on a buy to let property was the most common type of fraud that could be reduced by more use of technology, according to 46% of respondents to the survey carried out by online property data network EDM Mortgage Support Services. Other types of fraud that could be reduced by more technology cited by brokers include income or employment falsification, 44%, concealing debts and liabilities, 39%, identity theft at 37%, obtaining multiple loans on the same property, 34%, and over valuing properties at 24%. Despite this, only 17% of brokers believe lenders are implementing enough technology to deal with fraud. Some 35% of mortgage brokers say the Mortgage Market Review (MMR) has not reduced the chances of fraud at all while another 2% say it has actually increased it while 56% believe the MMR has reduced the chances of fraud. ‘The argument for more use of electronic data and communication is getting stronger, not just as a result of the greater administrative burdens resulting from MMR but other issues too, such as tackling fraud,’ said EDM MSS managing director Joe Pepper. ‘There is already some use of electronic data exchange, more than a third of the brokers in our survey say they between 81% and 100% of the information/correspondence they exchange with lenders is done so electronically,’ he pointed out. ‘But there is potential for this to be much greater and more extensive use of quality online systems would help the mortgage industry deal much more efficiently with large amounts of data and correspondence,’ he added. EDM Group is investing in EDM MSS to further enable it to capitalise on the growing data exchange and technology needs in the mortgage and property sectors. Continue reading
