Hope for Leaseholders
One of the big scandals in property over the past few years has been over leaseholder ground rent. This used to be minimal, but then builders caught on to a potential new source of income. So higher rents were introduced and clauses which provided for them to be doubled every ten years.
You can read the details in this helpful explanatory article in the Guardian. The upshot was though that, for affected properties, ground rent became progressively higher and higher, rendering the homes more expensive and in some cases almost impossible to sell.
However, it now looks as if something may be done about it and the Government has launched this consultation which will close on 19 September. If you are in any way affected by the scandal you should submit a response.
Prison for sex for rent landlords
Another even more unsavoury rental practice has been for landlords to offer rented properties free to tenants in exchange for sex.
As one of them apparently told the BBC
I was thinking once a week, something like that, I’m happy as long as there’s sex involved.
It was feared that this sort of thing was totally legal but David Ldilongton, the Lord Chancellor has now said that they are actually a criminal offence under the Sexual Offences Act 2003.
Lidington said in a letter, reported on the BBC:
“Taken together, these [provisions] essentially mean that an offence is committed when a person offers accommodation in return for sex, as they are inciting/causing another person to have sex with them in return for ‘payment’.”
The offence carries a prison sentence of up to seven years.
The matter was brought to the Ministry of Justice by MP Peter Kyle who on the BBC report acknowledges the help he received from BBC South East – a good example of Parliament and the Press working together.
Lettings to under 35’s
Maybe one reason why young people are even contemplating this sort of thing is the fact that many normal landlords are no longer prepared to rent to them – particularly if they are on benefit or a student.
This has been thrown up by a new report from Sheffield Hallam University on behalf of the Residential Landlords Association which found that 30% of 1,996 landlords surveyed had changed their lettings strategy in the past three years.
Chair of the RLA, Alan Ward, said:
‘This research suggests that landlords are moving away from accommodating under-35s, especially those who are on benefit, out of concern that they will not get paid. The report notes that landlords are not necessarily looking for higher rents or increased yields from their properties. Instead, the emphasis is on reducing risk, particularly in relation to rent arrears and the administration of welfare payments.
Landlords may be worried about not being paid, but big problems are also facing letting agents.
Letting agents and money laundering
Property Industry Eye has an article today which will worry letting agents. It looks as if their collective sigh of relief at having avoided the money laundering rules may be premature.
Notwithstanding the fact that they are not specifically required to do checks themselves, it appears they may instead be required to do them by their bank – as their bank, under the regs, has to be sure that people benefitting from client accounts have been properly screened.
It is not clear whether this screening will need to be just for landlords or for tenants too – if the latter it would involve a massive amount of work. Just at a time when agents are about to lose the right to charge tenant fees.
Its a tough life being an agent. Unless you are a dodgy one and just ignore this sort of thing. However …
Nowhere to hide
If you are a dodgy letting agent and are based in Newham you have another problem coming. Newham are about to publish star ratings of all letting agents in their area
The Mayor, Sir Robin Wales said
“The law gives us limited powers to act against these cowboys, but by scrutinising their activity, and sharing information with our residents and landlords, the ratings should see the unscrupulous agents pushed out of business, while professional and hard-working agents are rewarded.”
This is in addition to the ‘name and shame’ database announced by the London Mayor in April which is due to launch in the autumn.
Things have been a bit quiet on the Grenfell front this week. However, if you want to keep up to date with Grenfell news you will find a list of all government announcements and news items here. Plus there is also this report from the House of Commons Library.
Incidentally, there is a great video on the Guardian website here looking at the derelict properties on Billionaires Row in North London which have been bought by billionaires and left to rot.
What made me smile this week
The fact that names of the owners of empty posh homes in Kensington were accidentally emailed to the Guardian by the Council as described in this article.
The information contains council tax information of the vacant homes and their 1,197 owners.
603 of these have apparently been empty for over two years – maybe some of these could be considered for ‘requisition’ for Grenfell survivors?
What do you think? Is that likely to happen??