Tag Archives: kris hopkins

Changes will force letting agents to clarify fees

The Government has announced plans to increase fines against letting agents breaching rules, and will require them to publicly state the fees they charge.

The new rules are aimed at reducing complaints in the sector, after they increased by 23% in 2013, compared with the previous year. Strangely, it is not only renters who are fed up with rogue letting agents – half of complaints were from landlords.

Currently, letting agents are bound by the rules of the Advertising Standards Authority, which requires them to list compulsory charges. However, many additional hidden charges are often added, and it is these that the new rules aim to reveal. The new requirements will be for a full tariff to be shown both on websites, and “prominently” in offices. Warns the Government: “Anyone who does not comply with these new rules will face a fine – a much stricter penalty than currently exists.”

Minister Kris Hopkins said: “The vast majority of letting agents provide a good service to tenants and landlords. But we are determined to tackle the minority of rogue agents who offer a poor service. Ensuring full transparency and banning hidden fees is the best approach, giving consumers the information they want and supporting good letting agents.”

And in a hint that this approach is fundamentally different to the approach suggested by the Labour party, he added: “Short-term gimmicks like trying to ban any fee to tenants means higher rents by the back door. Excessive state regulation and waging war on the private rented sector would also destroy investment in new housing, push up prices and make it far harder for people to find a flat or house to rent.”

Changes aim to improve managing agent behaviour

The Government has announced measures it says will help ensure tenants get a better deal, by clamping down on “unscrupulous” letting agents. The new rules come into force as some suggest that Britain’s growing army of renters could become a political force to be courted by politicians, ahead of the 2015 general election.

Under the rules just announced, all letting and property management agents will have to register under one of three redress schemes. These “will ensure tenants and leaseholders have a straightforward option to hold their agents to account,” promises the Department for Communities and Local Government.

Three organisations – The Property Ombudsman, Ombudsman Property Services and The Property Redress Scheme – will investigate complaints about hidden fees or poor service, dishing out an independent ruling on the accusations. Where a complaint is upheld, tenants may be able to claim compensation. Around 3,000 agents – or 40% of the entire industry – have yet to sign up with one of the three organisations, but will be legally required to do so.

“All tenants and leaseholders have a right to fair and transparent treatment from their letting agent,” said housing minister Kris Hopkins. “A small minority of agents are ripping people off, and giving the whole industry a bad name.” He insists the redress scheme will “ensure tenants have a straightforward route to take action if they get a poor deal, while avoiding excessive red tape that would push up rents and reduce choice for tenants.”

The department has released a model tenancy agreement for long term tenancies, and is working through responses to a recent consultation over how to tackle the minority of poor landlords, without unnecessarily penalising those who perform satisfactorily.

And, as Alex Hilton, blogging for The Independent notes, there may be votes for politicians who can demonstrate they will look after renters better. His article suggests that “conditions are becoming Dickensian in nature and exploitation by landlords and letting agents is the norm”, not helped by a largely unregulated lettings market.
He asserts that it is perverse that the government pays large amounts to private landlords via housing benefit, yet fails to spend anywhere near as much on building affordable homes, adding: “Politicians are wrong if they think 9 million renters will accept this meekly at the election next year.”

Consultation to change short term rental rules in London

London’s outdated rental laws are due for an overhaul that could simplify lettings. It could also ease the situation that means renters on websites such as AirBnb, the peer to peer accommodation listing site, are often breaking the rules when they offer London accommodation for short term rent.

A consultation has opened into the proposal to align London’s currently unique rules, with those that apply in the rest of the UK. Currently, Londoners have to obtain official permission to rent out a property for a period of less than three months, as under the 1973 Greater London Powers Act, such a rental is considered a change of use.

“London is a holiday hotspot, with thousands of working people visiting every year looking for somewhere comfortable and convenient to stay,” housing minister Kris Hopkins told the London Standard. “Yet the capital’s homeowners get tangled in red tape each time they look to offer their homes. This, and the wide range of property websites offering opportunities to advertise homes for rent, makes this law increasingly outdated and unworkable.”

“I want to hear whether we update this rule, or whether London needs its own rules at all, to ensure as flexible a market as possible for tenants and tourists alike.”

The consultation will bring new and old into direct conflict. Website AirBnB recently put out a report to argue for its service, letting people rent out a room or flat on a flexible direct basis; that argued the website delivers £500m a year of benefit to the London economy, helping hard-pressed homeowners pay the bills while offering accommodation to people who otherwise couldn’t afford to visit.

Naturally, the hotel companies are up in arms, disputing the loss of business argument, and pointing out that private lets don’t adhere to tight health and safety regulations.

Local authorities in London are also not keen. During the run up to the 2012 Olympics, several started enforcement of the rules to prevent enterprising Londoners renting out their flats. One of their arguments is this: if you live in a quiet apartment block, and your neighbour starts renting out a flat via AirBnb or similar, and a succession of weekend stag or hen parties arrive to stay in your building, interrupting your quiet nights and leaving a mess, you’d probably be very unhappy.

You will find more about the rules and legalities of renting out a London home for the short term, here.

And there’s more on the government consultation here.