Property Market Update - Week Ending 10/01/16

Our weekly newsletter on the property market will keep you up to date with all the latest news and legislations!

Our newsletter is published every Monday morning reporting on the most important news over the past week.

Code of Practice Updated as Countdown For Right To Rent Begins

Monday 4th January

Time is ticking for landlords and letting agents to get to grips with Right to Rent being less than a month away. The Government has updated its statutory Code of Practice ready for the change.

By doing this, there is still a certain amount of confusion, as the Code suggests there will not be a big unveiling of the policy, but one that will be phased in region by region, or “on a phased geographical basis, and will apply to residential tenancy agreements entered on or after the date of implementation for that area” as the code states.

However, the confusion stems from the issue that users are then directed to the Right to Rent website where it says that for tenancies starting on or after February 1, “landlords of properties throughout England should check that someone has the right to rent before letting them a property”.

Earlier this week, a Home Office spokesperson confirmed that the reference in the Code to a phased geographical implementation is both a reference to the pilot scheme in the west midlands, where landlords (or managing agents) – have had to carry out Right to Rent checks for just over a year and also to the UK-wide roll-out. David Gascoyne, Manager of Sales and Lettings at Residential Estates said that "it has been confirmed that Right to Rent goes live throughout the whole of England on February 1st and so tenants and landlords need to be aware of their duties."

Large Rush For Buy To Let To Escape The Grasp Of Stamp Duty Increase

Wednesday 6th January

The clock is already ticking for buy-to-let purchases to go through before the 3% Stamp Duty surcharge is implemented on April 1.

According to one mortgage business, it takes an industry average of 95 days to get a buy-to-let mortgage application completed. As of today, there are 84 days, suggesting a stressful workload for agents, valuers, conveyancers and the mortgage industry.

Steve Povall, Managing Director of Residential Estates said “It will save borrowers thousands of pounds, however the recent rush of buy-to-let deals has mainly been first time investors, as we have found that the more experienced are sitting back and waiting for property prices to fall after April 1, when landlord purchasers would factor in the extra Stamp Duty into their offers.

“Alice in Wonderland” Tax Causes Legal Challenge

Monday 4th January

Chancellor George Osborne is facing a legal challenge after two private landlords launched a crowdfunding campaign on Boxing Day.

Chris Cooper and Steve Bolton are seeking a judicial review of the notorious Clause 24 of the Finance Act 2015. Cooper and Bolton say that they believe Clause 24 breaches human rights and/or EU law. The clause was announced in the July Budget and will reduce the amount of mortgage interest that landlords can claim against tax, and mean that landlords will be taxed on turnover, not profits.

The challenge is to be based on the argument that the change in tax flouts “a long-established principle of taxation that expenses incurred wholly and exclusively for the purposes of the business are deductible when calculating the taxable profits”.

Bolton said: “It’s not clear why the Government has chosen to just launch an attack on buy-to-let owner-operators with mortgages. It’s a tax from Alice in Wonderland – truly absurd and divorced from real life. Not only is this tax grab unfair, undemocratic and underhanded, but it could also be unlawful.”

Agents Can Face Large Fines Thanks To New Housing Bill

Wednesday 6th January

The Housing and Planning Bill passed its report stage in the Commons last night.

The Bill will now make history as it goes on for its third reading. It is the first Bill with an English legislative stage, where only English MPs can vote on certain sections.

The Bill will introduce a blacklist of private landlords and letting agents, to be made available to local councils and central government. It will also make it possible, for the first time, to ban both letting agents and landlords from the industry. As it stands, however, the Bill does not make it impossible for banned letting agents to open as estate agents.

Amendment 16, tabled by the Government, would increase maximum fines levied against someone letting out a sub-standard home from £5,000 to £30,000.

David Gascoyne, Sales and Lettings Manager of Residential Estates said “The housing crisis is really affecting people. Renting is unaffordable, and buying a home is still an impossible dream for many. However, the provisions on rogue landlords, letting agents and the introduction of a brownfield register are welcome but a bill that would have looked at making housing more affordable for everyone may have been more useful.”

System Manipulation Triggers Rightmove Investigation

Wednesday 6th January

Rightmove last night confirmed that it is conducting an inquiry into alleged ‘portal juggling’.

That is the alleged manipulating of the system, by which some properties are taken down and then added again as though they are new listings. Sometimes, it is alleged, the properties are taken down after being advertised at one price. They are then added again at a new price, and then very shortly afterward can be viewed as under offer.

Other properties apparently include some that look as though they were listed after open house events were advertised.

Rightmove have said “We do not tolerate reloading properties as new and if there is found to be no legitimate reason for a property coming back on the market this is escalated in line with our process, and dealt with accordingly.

David Gascoyne, Sales and Lettings Manager of Residential Estates said that “the practice of juggling and manipulating is not found only in Rightmove and we fully support the Rightmove team for taking the most proactive interest in investigating the case”.