Housing Secretary Michael Gove has promised to scrap most leaseholds in England this year.

The government will make it much easier for leaseholders in flats to take over their buildings and bring them into common ownership, avoiding high management fees and ground rents.

It is also preparing to scrap rules that prevent owners from buying the freehold to their property if a small part of the building is given over to commercial use, including shops.

Speaking on Sky News, Gove said it planned to introduce legislation in the final parliamentary session, later this calendar year.

He explained: “The fundamental thing is that leasehold is just an unfair form of property ownership. In crude terms if you buy a flat, that should be yours. You shouldn’t be on the hook for charges which managing agents and other people can land you with.”

Feudal system

Gove described leaseholds as “an outdated feudal system” following growing criticism of the rules after the Grenfell cladding scandal.

Many homeowners have faced crippling bills and cannot sell their properties after buying leasehold flats that the freeholders refuse to make safe.

The government tasked the Law Commission to study the sector in 2020, which had, “far too many problems including disproportionate costs to extend leases; poor value property management; and a slow and costly sales process”.

Its subsequent report proposed an overhaul of the right to manage process and suggested that landlords’ legal costs should not be passed to leaseholders, blaming costs as the prime reason why applications fail.

Since then, solicitors have reported a rise in the number of enquiries from leaseholders about taking over their freeholder’s management functions under The Commonhold and Leasehold Reform Act 2002, better known as right to manage or RTM claims.

Original Post From landlordzone.co.uk

Launched in April 2021, the scheme protects lenders against losses when lending to first-time buyers and movers with low deposits.

It enables buyers to put down five per cent of the total value of a home worth up to £600,000 as a deposit, while the remaining 95 per cent is covered by a mortgage.

The initiative, launched during the pandemic as lenders cut back on low-deposit loans, is designed to help households with good credit who are struggling to save for high deposits. It offers a financial guarantee to lenders on a portion of the mortgage.

The scheme was originally due to run until the end of December 2022 but ministers have now delayed closure until the end of 2023.

Chief Secretary to the Treasury, John Glen said: “For hard-working families facing today’s challenging economic conditions, it is right that we continue to help them secure their first home or move into their dream house.

“Extending this scheme means thousands more have the chance to benefit, and supports the market as we navigate through these difficult times.”

The Government added the scheme has helped over 24,000 households get on the property ladder so far, with 85 per cent of buyers being first-time homeowners.

Trinity Finance advisor, Amit Patel said: “This is a much-needed policy announcement that will enable buyers with a smaller deposit to get onto the housing ladder in the turbulent times we are going through. It would have been naive to withdraw the scheme given the dip in housing activity and the prevailing sentiment that house prices will drop in 2023/2024.”

Original Post from standard.co.uk

Blog post from propertyindustryeye

Households could save around £310 a year through an expanded scheme to insulate Britain’s draughtiest homes, the government has said.

It will spend £1bn from next spring on grants for homes that have low energy efficiency ratings and are in lower council tax bands.

Households will need to contact their energy supplier or council to see if they are participating, it said.

But critics questioned why the funding would not be available over winter.

The Department for Business, Energy, Industry and Skills (BEIS) said households who currently did not benefit from any other government support would be able to upgrade their homes under the ECO+ scheme.

The grants will help households to fund low-cost measures such as loft and cavity wall insulation, with the average cost per household expected to be £1,500.

Original post from bbc.com

Housing Secretary Michael Gove has made an announcement overnight that “the government will always act to protect tenants.

“The claim comes as part of an announcement giving cash to seven areas to clamp down on rogue private landlords. At the same time there is to be a cash squeeze on failing social landlords, as a result of the tragic death of Awaab Ishak.

The Department of Levelling Up, Housing and Communities has revealed overnight that £14m is to be given to seven areas with high numbers of poor privately rented homes “to crack down on rogue landlords and test new approaches to driving up standards.”

Projects include £2.3m for Greater Manchester – including Rochdale and surrounding councils – to increase the use of fines where a landlord is found to have committed an offence; £678,000 for Leeds to use behavioural science to change culture among landlords, improving knowledge and skills; and £1.14m for Cornwall to create a database of private rented accommodation in the area and record standards to target better enforcement action.

Meanwhile the social landlord at the heart of the Awaab Ishak case – Rochdale Boroughwide Housing – will now not receive its expected £1m funding from the Affordable Homes Programme or receive any new AHP contracts for new homes, until the Regulator of Social Housing has concluded its investigation and it can prove it is a responsible landlord.

Gove says the government will also continue to monitor housing standards of RBH tenancies closely, working with the Regulator and Ombudsman, to ensure that tenants have appropriate housing.

As part of a wider crackdown on poor standards, Gove adds that he will also block any housing provider that breaches the Regulator’s consumer standards from new AHP funding until they make improvements. Gove will also consider stripping providers of existing AHP funding, unless construction has already started on site.

The move comes after Gove wrote to all councils and housing associations last weekend, saying they must raise the bar dramatically on standards and demanding urgent action where people complain about damp and mould.

Gove says: “RBH failed its tenants so it will not receive a penny of additional taxpayers’ money for new housing until it gets its act together and does right by tenants. Let this be a warning to other housing providers who are ignoring complaints and failing in their obligations to tenants. We will not hesitate to act.

“Everyone deserves the right to live in safe, decent home and this Government will always act to protect tenants.”

Want to comment on this story? If so…if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

Blog post from landlordtoday

Following last week’s bond market turmoil, which sent shockwaves through the City, investors are now scrambling to exit UK property funds.

Since the new chancellor, Kwasi Kwarteng, presented his Mini-Budget at the end of September, the pace at which investors are pulling out of UK commercial real estate funds has accelerated.

In the 10 days following Kwarteng’s presentation, more than £100m alone was pulled from a range of property funds that are monitored by fund trading provider Calastone, according to a Financial Times report this week. This was reportedly eight times the outflow of the previous three weeks together.

City analysts now warn that the scramble to flee property funds may lead to property being offloaded at depressed rates.

Commercial property markets are already suffering from higher borrowing costs and given the fact that deal-making has slowed makes it harder for key players to determine realistic evaluations.

“One way or another those assets are going to have to be sold into a down market,” said Zac Gauge, head of European real estate strategy at UBS in the FT.

Gauge and other property analysts expect sales property to change hands at up to 25 per cent less than earlier this year.

Roger Clarke, head of IPSX, an exchange for property, said in the FT that there is a crucial flaw in the structure of funds that usually allow buyers the opportunity to exit at just a day’s notice.

Original post from https://www.cityam.com

You may not like landlords but we need them

Sounds of wailing and gnashing of teeth drift down from the rooftops. They are emitted by landlords, not a social group as likely to evoke pity as are widows and orphans. They nonetheless feel embattled, threatened with legislation to end so-called no-fault evictions, together with increasing taxation. They warn of a contraction of the housing rental market, even as millions of people are unable to buy.

They point to the example of Scotland, where similar legislation and a rent freeze have provoked just such a shrinkage. In February the Scottish Association of Landlords claimed a 50 per cent year-on-year reduction in properties being marketed to let, which it largely attributed to the SNP government’s policies.

This is an issue that touches almost all of us, as lessors, lessees or parents of children who rent. Whereas in 1988 (all the figures below are government-sourced) just 9 per cent of householders were private tenants, today that figure has doubled because of the pincer consequences of the sell-off of the public housing stock together with soaring purchase prices.

A friend laments that his daughter, aged 32 and earning £120,000 a year, cannot afford to buy. Another friend describes how his daughter, a medical student, has suffered miseries at the hands of an owner unwilling or unable to mend a broken boiler. It is terrifying to read that the average 2021 monthly rent in London was £1,597, compared with £572 in the northeast.

Since 4.4 million UK households occupy rented accommodation, the government’s summer white paper A Fairer Private Rented Sector made front pages. Because most British people, unlike Europeans, rent only from necessity rather than choice, they feel imprisoned by their predicament and, not infrequently, by their landlord.

The Renters’ Reform Bill inspired by Michael Gove, the levelling-up secretary, looks like a vote-winner which the homelessness charity Shelter applauds as a game-changer for tenants. Last month ministers promised that the measure will be introduced in this parliament.

Yet there is another side of the story. Precisely because property is so widely unaffordable, a healthy private rental sector is indispensable. As are landlords. If legislation bears down too heavily, some at least will abandon letting, sustaining the current upward pressure on rents caused by shortage of supply.

Landlords point to the paralysis that overtook the pre-Thatcher market, when it was almost impossible to evict tenants in rent arrears, a situation ended only by her 1988 Housing Act. They argue that if the weight of regulation continues to increase, those bad old days will return. They instance the ever-more rigorous requirements for energy performance certificates and the costly health and safety standards that do not burden owner-occupiers.

Many landlords already experience difficulties and, above all, long delays in expelling antisocial or non-paying tenants. A contested eviction can cost £3,000-plus in legal fees, along with many months of lost rent. If an owner behaves decently and performs necessary maintenance, it is hard to get rich out of most lettings. There is no special virtue in small landlords as against big ones because the former often lack the support machinery to maintain properties efficiently.

My wife is one of 43 per cent of all landlords who lets just one property, her former home. This yields a modest net return, considerable worry and once, a few years ago, serious pain. A solicitor who had heard of me telephoned to ask if we had just sold a house in Fulham. No, I responded. Odd, he said: somebody had certainly disposed of such a property in our name. We proved to have been early victims of what became a notorious scam. A crook had rented, paid an accomplice to secure a passport in my wife’s name, “sold” the house and vanished.

Fortunately for us, the Land Registry had not endorsed the sale but the buyer’s six-figure payment vanished for ever to Dubai. We challenged the failure of the letting agent to smell a rat, not least when the “tenant” whom they had recruited paid thousands in cash. They shrugged that they were mere rent collectors. Nothing to do with us, guv. The firm proved reluctant even to surrender the tenant’s deposit to make good the mess.

That was an extreme case but the small minority of bad tenants — one owner suggests that they constitute 5 per cent of the total — inflict serious loss. He says: “We love good tenants, but the defaulters can cost a fortune.” The same friend, one of the 18 per cent of landlords that have five or more properties, feels ground down by ever-more demanding health and safety requirements, and ever-increasing restraints on getting problem cases out.

The proposed legislation will allow tenants to appeal against rents to a tribunal which will have power only to lower, not to increase, amounts, thus granting appellants a free pass. The government promises to end automatic rent review clauses in leases and to tighten lending criteria for buy-to-let mortgages.

Those of you who have read thus far may still not be shedding tears for persecuted landlords. Why not? First, because property owners are by definition “haves”. Meanwhile, unless one lives in Eaton Square or Wimpole Street on one of the huge, fat aristocratic Grosvenor, Cadogan or Howard de Walden estates, many tenants are relative have-nots.

Next, we feel guilty about the estimated 2.8 million people who live in “desperately low-quality homes”, to quote the white paper. We also know that, historically, the landlord-tenant relationship was tilted too heavily in favour of the former.

At regular intervals, cases hit the headlines of tenants monstrously treated by extortionists, latter-day Peter Rachmans. Statistically, these are few, because the law provides the protection absent in the 1960s. Each such story, however, feeds the characterisation of landlords as oppressors of the vulnerable.

Having read most of the white paper and talked to rival advocates in this debate, there seems merit on both sides, as is the case with almost all vexed issues. Whitehall appears in danger of overreach, however; of so overloading landlords’ regulatory burden that ever more turn to the Airbnb option as an alternative to long-term lets. In the government’s eagerness to please millions of tenants and their lobbies, it may neglect the fact that landlords also need rights in order to stay in business.

Successive governments flunk the core problems. Foremost is the national housing shortage, much influenced by indulgence of elderly voters’ nimbyism. Gove, introducing his white paper, spoke of a need to “support the vast majority of responsible landlords who provide quality homes”. Yet the planned legislation promises a degree of tenant protection that can scarcely fail to squeeze the rental sector even as mortgage interest rates rise, worsening the unaffordability of purchase. We need more, not fewer, private landlords.

Blog post from thetimes.com

THURROCK Council are working with an Essex wide energy partner called Warmworks to help households who are eligible in the borough to become more energy efficient.

To be eligible for the scheme your home must be rated as Energy Performance Certificate E, F or G, or you have a household incomed below £30,000.

Cllr Luke Spillman, Cabinet Member for Housing, said, “This is a wonderful offer for those living in properties who are eligible and help for private landlords, the funding is a grant that does not have to be repaid.

“Thurrock Well Homes Team are identifying the properties that are known to the council as having a low Energy Performance Certificate, to work with residents in making their home more energy efficient.

“If our homes are running more efficiently, this will ultimately bring the energy bills down, which is some relief given the current cost of living.”

Improvement measures available by the grant include: insulation, low carbon heating systems, solar panels, ventilation, energy efficient lighting and more. Please note, gas and oil boilers are excluded from this specific funding.

The funding covers the cost of improvements up to £10,000 for properties that are on mains gas, and up to £25,000 for homes that are not on mains gas

There is funding available for private landlords. However, a 33% contribution from the landlord is required and the maximum funding per property is £5,000.

For more information on the sustainable warmth grant, and to submit your application with Warmworks, go to thurrock.gov.uk/warmth, or contact Thurrock Well Homes team by emailing [email protected].

For more information on cost of living support, go to thurrock.gov.uk/costofliving

Original post from https://www.thurrock.gov.uk

HMRC steps up search for landlords with undeclared rental income

Original post from propertyindustryeye