Regulation Beyond Richard Blanco NLA Representative www landlords
Regulation & Beyond Richard Blanco NLA Representative www. landlords. org. uk 1
In this presentation… • • Government thinking Latest regulatory changes & updates Brief Housing market update Where next? www. landlords. org. uk 2
Why so much regulation? • • • Milestone of 125 pieces of legislation – 80 since 1990 Professionalisation Preference for larger landlords and owner occupiers Long term frustration with agents Competing with the opposition – Appealing to younger voters • Stay informed • Business plan to take account of it www. landlords. org. uk 3
Three housing minister changes this year…. . Secretary of State For Housing, Communities & Local Govt James Brokenshire (was Sajid Javid) Minister of State for Housing & Planning (8 th since 2010) Kit Malthouse (was Dominic Raab, was Alok Sharma) • Building safety and regulations, housing supply and supporting home ownership policies Minister for Housing & Homelessness Heather Wheeler • Private rented sector policy, leasehold reform, homelessness, Housing Ombudsman & redress, reform of home buying process. www. landlords. org. uk 4
Consultation on Longer Tenancies – Key Points • Min 3 year tenancy, break clause at 6 mths – Then tenant can leave with 2 mths notice – Landlord must use section 8 or if selling or moving in themselves – One rent increase per annum – Exemptions for short term & student lets – Suggested financial incentives • Will it happen? ? ? www. landlords. org. uk 5
Longer Tenancies Consultation • Key Issues – Increase of PRS & 38% households with children – Average tenancy lasts 4 years, 45% under 35 – Only 15% tenancies ended by landlord – Role of letting agents – CAB says only 33% want longer tenancies – Increased risk - 22 week court process too slow – Could reduce supply – add to s 24, PRA changes – How to do exemptions, financial incentives www. landlords. org. uk 6
Regulatory Change - Revised How To Booklets • How To Let – reading for landlords • How To Lease – reading for leaseholders • How To Rent A Safe Home – for tenants • How To Rent – for tenants – Must be given to tenant or can’t serve s 21 – Also GSI, DPC, EPC, License, Fair Processing Notice – Test smoke alarms www. landlords. org. uk 7
Regulatory Change – HMO Licensing from 1 Oct • All properties with 5 people, • • 2 households in scope National min room size 6. 52 m 2 undersized rooms have 18 months max to comply Requirement to provide adequate waste facilities Discretionarily licensed properties automatically passported into scheme www. landlords. org. uk 8
Minimum Energy Efficiency Standards • Ban new tenancies in F & G Properties – From 1 April 2018 inc SPT, LA fine of £ 5, 000 – Ban all existing tenancies from 1 April 2020 – Some exemptions (upfront cost, lack of consent) – £ 2, 500 contribution cap likely to come in next year • Estimated to affect 280, 000 properties – Note EPC methodology updated re solid walls • Future extension consultation – Band D from 2025, Band C from 2030 www. landlords. org. uk 9
GDPR – Data Protection Changes • Regulation from 25 May 2018 – NLA has produced a guide • Landlords are data controllers and need to register with Information Commissioner – Adopt a fair processing notice – Review data you currently hold – Evaluate how you collect, hold and use data – Review all data processors you work with www. landlords. org. uk 10
Summary of Regulatory Change for Agents • Compulsory Regulatory Code Letting Agents – Nationally recognised qualification – Transparency – Service Charges, Communication, Customer Service – Handling clients money & dispute resolution • New Regulator – Own the code and manage qualifications – Power to ban agents • CMP to become compulsory (April 2019) www. landlords. org. uk 11
Progress Of Tenant Fees Bill • Ban fees except in tenancy management charges – Tenant requests change/early termination (£ 50 max) – Payments arising from default by tenant such as lost key – Utilities, communications service, council tax • Deposits capped at 6 weeks • Holding deposit capped at 1 week (new procedure) • Trading Stds £ 5, 000 fine (£ 30, 000 civil penalty) – Tenant can recover fees in tribunal – Landlord can’t use s 21 until fees are repaid • Affects agents & landlords • Not due to come in before Spring 2019 www. landlords. org. uk 12
Impact Of Section 24 Tax Changes • 2018/19 is Year 2 of section 24 tax changes – 50/50 split for additional/higher rate relief – 38% plan to buy in a limited company, only 15% have changed their structure – Only 49% fully understand changes • PRA changes – 125% x 5. 5% stress test – 60% of landlords report harder to get a mortgage www. landlords. org. uk 13
Going Forward…. • Creditworthiness Assessment bill – Record tenants rent payments • Review of selective licensing – To report in Spring 2019 • 5 yearly electrical checks – Confirmation they will be brought in • Labour Party Conference – Abolish s 21, Rent controls, 3 Year Tenancies and Renters unions • Conservative Party Conference – Lift cap on LA spending, floating new tax ideas www. landlords. org. uk 14
Housing Market Update • Growth slows to 5 year low • Up 3% year to June 2018 (ONS figures) • Down 0. 7% in London • BTL lending down by 22%, FTB lending up 8% • Rents down 0. 3% in Greater London 12 mths to Aug (up 0. 9% in GB overall) • s 24, PRA, SDLT & Brexit • Savills Research – North West capital growth 18% – London 7. 1% www. landlords. org. uk 15
Into The Future • Interest rates & lenders • Has the size of the PRS peaked? – 22% of landlords say they will sell • What could new social housing look like? • Improvement in Property Conditions? – Decline in tenant demand, more build to rent • ‘Professionalised’ agents and landlords all members of trade bodies? • National Register vs Licensing www. landlords. org. uk 16
Inside Property – NLA Podcast • Monthly podcast – Expand, Hold or Sell? – Brexit & Investing – Crime in the PRS – Property in the media – Maintenance – HMOs – Design for Let Property – Current Affairs editions • insideproperty. org. uk www. landlords. org. uk 17
Join the NLA • Today for £ 75 instead of £ 99 • Advice line & Library • UK Landlord • Discounts on mortgages, insurance and other services • Your voice • Be a professional • 87% satisfaction rate www. landlords. org. uk 18
Contacts Your NLA London Representatives (for advice, please contact the NLA advice line) richard. blanco@landlords. org. uk yvonne. baisden@landlords. org. uk karen. gregory@landlords. org. uk To do business with the NLA meera. shah@landlords. org. uk www. landlords. org. uk 19
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