Leasehold axed for all new houses in move to place fairness at heart of housing market

27 Jun 2019

All new-build houses will be sold as freehold in bold move to tackle unfair leasehold practices.

  • Pernicious ground-rents on new leases to be reduced to £0 – preventing leaseholders being charged soaring fees for which they receive zero benefit
  • All new houses to be sold on freehold basis unless there are exceptional circumstances – ending unscrupulous practice of unnecessary leaseholds
  • Immediate action to ban Help to Buy being used to support leasehold houses – stopping taxpayers’ money being used to fund unjustified sale of leasehold houses

All new-build houses will be sold as freehold in a bold move to tackle unfair leasehold practices and prevent future home-owners from being trapped in exploitative arrangements, the Communities Secretary said today (27 June 2019).

In a wide-ranging speech to the Chartered Institute of Housing conference in Manchester, the Rt Hon James Brokenshire MP confirmed plans to abolish the selling of new houses as leasehold properties and reduce ground rents for new leases to zero – putting cash back into the pockets of future homeowners.

To stop freeholders and managing agents taking as long as they want – and charging what they want – to provide leaseholders with the vital information they need to sell their home, ministers will introduce a new time limit of 15 working days and a maximum fee of £200 to make the home buying process quicker, easier and cheaper.

The Secretary of State has also instructed Homes England to renegotiate Help to Buy contracts to explicitly rule out the selling of new leasehold houses, other than in exceptional circumstances, to protect new home buyers from unscrupulous charges.

And where buyers are incorrectly sold a leasehold home – saddling them with a property that could ultimately prove difficult to sell – consumers will be able to get their freehold outright at no extra cost.

The measures announced today demonstrate the government’s commitment to ensure decent and fair housing for the people and communities that need them, as it strives to deliver 300,000 new homes a year by the mid-2020s.

Other important proposals unveiled include new proposals to make it easier for renters to transfer deposits directly between landlords when moving; extra funding for 19 new garden villages; and radical new measures to speed up planning applications.

Communities Secretary Rt Hon James Brokenshire MP told the Chartered Institute of Housing conference:

“We have long recognised that we have a responsibility to confront unfairness in the leasehold market. Last year we consulted on proposals including the leasehold house ban and ground rent reduction.

“Today I can confirm we will go ahead with our original plan to reduce ground rents on future leases to zero, as opposed to a cap of £10 per year.

“And we will legislate to ensure that in the future – save for the most exceptional circumstances – all new house will be sold on a freehold basis.

“We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows – helping us delivery our promise to make the home buying and selling process quicker, cheaper and easier.

The government’s proposals have already had a fundamental impact on the housing market since they were unveiled, with the sale of leasehold houses falling from 11% to just 2% this year.

Plans for deposit passporting

More than 4 million people live in the private rented sector, yet when moving home, some tenants can find it a struggle to provide a second deposit to their new landlord – risking falling into debt or becoming trapped in their current home. Ministers want to understand the scale of this problem.

Ministers are inviting proposals to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next.

Freeing up deposits and allowing a renter’s hard-earned cash to follow them from property to property – as they move to take that perfect job, to move nearer to family, or find a place that suits their changing needs – will create a fairer housing market that works for all.

New garden communities to be created

An extra 19 garden villages will be created across the country, with the potential to deliver 73,554 homes, it has been announced today.

The government is providing £2.85 million to support the development of plans for housing from County Durham in the North to Truro in the South West.

Each of the projects will be given £150,000 to progress planning applications and specialist reports needed before homes are built.

The new settlements include a dementia-friendly community village at St George’s Barracks, in Rutland, which would allow the elderly to live safely and independently in their own homes.

Planning bureaucracy cut

Councils will be able to approve planning applications more quickly under radical new measures to remove bureaucracy from the system.

The new accelerated planning green paper, to be published later this year, will dramatically improve the planning process.

This is part of a renewed and refreshed focus on making sure planning authorities have the resources they need to act for the benefit of homeowners – delivering a better service, faster than ever before.

Leasehold changes

New measures will also be taken to prevent developers selling leasehold houses through the Help to Buy Scheme – preventing taxpayers’ money from directly supporting the unjustified sale of leasehold houses.

The Communities Secretary has today instructed Homes England to renegotiate contracts with all Help to Buy developers to explicitly rule out the building and selling of leasehold houses, other than in exceptional circumstances.

This all comes as a further 18 leading property developers, managing agents and freeholders – including Crest Nicolson and Keepmoat Homes – have signed up to the government’s industry pledge, committing them to freeing existing leaseholders trapped in onerous deals where ground rents double every 10 or 15 years. This takes the total number of signatories to over 60.

New Homes Ombudsman

The government wants to see more good quality homes that people are proud to buy and proud to live in – and a New Homes Ombudsman, will protect the rights of homebuyers and hold developers to account.

Today ministers have launched a consultation on redress for purchasers of new build homes and the New Homes Ombudsman. This seeks views on the detail of the proposed legislation and how a new homes ombudsman can be delivered and will run until August 22.

They are also exploring the options to appoint a New Homes Ombudsman in shadow form – someone to work closely with industry, consumer groups and government to ensure improvements and standards are delivered quickly and help shape the future scheme.

£2 billion long-term affordable homes funding

The Communities Secretary opened the bidding process for £2 billion in long term strategic partnerships to deliver additional affordable homes with funding available until March 2029.

This marks the first time any government has invested such long-term funding in new affordable homes through Housing Associations, supporting the development of more ambitious long-term plans to build the homes this country needs.

These new bids will continue to build on the over 430,000 affordable homes delivered since 2010.

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Landlord jailed for illegally converted flats

29 Jun 2019

A rogue landlord who made almost £130,000 in illegal rent after converting his three-bedroom house in east London into two flats without planning consent has been jailed after failing to pay back the money.

Akram Hussain, 57, converted the family home in Glenny Road, Barking, into a one-bedroom flat and two-bedroom flat without obtaining planning consent.

Snaresbrook Crown Court last year that Hussain, of Bedford Road in Walthamstow, received £129,755.15 in rental fees.

Hussain was sentenced and fined £5,000, under Section 179 of the Town and Country Planning Act 1990.

He was told that if he had six month to pay back the £129,755.15 his tenants paid in rent. It was made clear that failure to pay the money within three months would result in 12 months in prison.

Having failed to stump up the cash, the 58-year old landlord was sentenced at Westminster Magistrates’ Court to 280 days for failing to pay a confiscation order, which was originally issued in 2017.

The confiscation order, for the sum of £129,755.15, remains in place until it is paid in full.

Cllr Margaret Mullane, cabinet member for Enforcement and Community Safety, said: “We will continue to pursue rogue landlords and take action against the small minority who put profit ahead of people.

“The council will always take a stand against those who look to exploit residents.”

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BTL landlord fined £7k for allowing garden to become ‘extensively’ overgrown

19 Jun 2019

A landlord has been ordered to pay £7,000 for neglecting the garden at one of his properties and allowing to become severely overgrown, having not cut the grass for seven years.

Leighton Dowding, 45, acquired the property in Downend, Bristol, in 2012, but given that he lives 150 miles away in Brighton, he left the house completely empty and failed to maintain the grounds.

Fly-tipped waste began to pile up next to a dilapidated shed in the front garden, whilst weeds cluttered the long back garden.

The 45-year-old landlord was served with a Community Protection Notice (CPN) in August 2017, and a subsequent Remedial Order in May 2018, ordering him to clear all the overgrown vegetation.

But none of the work was ever started at the mid-terraced house and Bristol Magistrates’ Court ordered Dowding to pay a £4,800 in fine and £2,200 in costs to South Gloucestershire Council.

Cllr Steve Reade, South Gloucestershire Council cabinet member for planning, transport and strategic environment, said: “We are working to bring long-term empty properties in our area back into use to help meet the local housing need.

“Before following this course of action, we had previously written to and contacted the owner several times about their property and repeatedly offered advice and assistance, without any continuing response.

“Where necessary, we will use enforcement powers to bring empty properties back into use which require an owner to maintain the property in reasonable condition if it is adversely affecting the locality.

“Allowing empty properties to continue to have a detrimental effect on the local neighbourhood will not be tolerated.”

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Urgent Landlord Action needed as Shelter survey asks for landlord views

17 Jun 2019

In a not very well publicised request (we couldn’t find it on Google) shelter is asking for landlord views.

This is our chance to alter the way they vilify all landlords because of the few.

It is really important that ALL landlords fill in the survey and explain to them the damage they do to many landlords by, for example, telling tenants to stay put until the bailiffs are called (and how much that has cost you and how long it takes).

How they need to stop calling section 21 “no fault eviction” because a) it is rarely no-fault it’s just that section 8 is not fit for purpose and many landlords have no other choice b) also s21 is notice to quit not eviction – it only becomes that because Shelter and Councils instruct tenants to stay put until they are evicted (even though councils are required to rehouse on notice but that’s another story for another day).

And maybe explain that s24, Licensing, etc are all driving up rents. And the real reasons (if this applies to you) that you don’t want or can’t afford to take benefits tenants.

Because if we don’t grasp this money to explain to Shelter the realities for our side they will continue not to understand!

I’m not suggesting we do this in any malicious way. Just state unemotionally the “facts” from your perspective as a landlord.  Oh and maybe keep a copy of your submission just in case…

Also be careful as the questions appear  a bit “loaded” towards defining us all as money grabbing don’t care about the tenants people “

The request from Shelter states: “Take our survey to help us understand what’s important to you and how we can best work together towards developing a better private rental sector. Answers are completely anonymised.”

Questions include:

  • What were your motivations for becoming a landlord?
  • What are the best things about being a landlord?
  • What are the main challenges you face as a landlord?
  • How would you describe your relationship with your tenants?
  • How do you think Shelter can work better with landlords?
  • What has been your experience of Shelter?

Lets hope this can be used as a positive step for Shelter and the PRS to start working together as opposed to against each other to the benefit of tenants.

Click here to access the survey

Fire Risk Act Now: Landlords with Whirlpool Tumble Dryers in rented properties

14 Jun 2019

Whirlpool has been ordered to recall 500,000 tumble dryers in what has been described as an “unprecedented” government move.

Around half a million faulty machines, which were produced between 1 April 2004 and 30 September 2015, are estimated to still be in use in UK homes – many of these may be in private rented properties it is thought.

Business minister Kelly Tolhurst has told MPs in the Commons that Whirlpool was informed earlier this month of the intention to serve a notice to recall the 500,000 machines not modified in a programme initiated by Whirlpool two years ago.

This government announcement comes after a report, published in April 2019 by the Office for Product Safety and Standards which considered whether a modification by Whirlpool – designed to reduce the risk of fires arising from its tumble dryers – was proving effective in both design and installation, and then whether the outreach programme by Whirlpool was adequate.

Andrew Griffiths, another MP, has said in the Commons: “The Office for Product Safety and Standards undertook a thorough review into the modification of Whirlpool tumble dryers, yet there still remains great concern not only about the straightness of Whirlpool, but whether people have unsafe products in their homes.”

Tolhurst told Griffiths during a debate: “Consumer safety is a government priority. I want to assure (Griffiths) that we have kept Whirlpool’s actions under review and I can tell the House we have informed Whirlpool of our intention to serve a recall notice as a next step of the regulatory process. This is unprecedented action.”

Any agent finding an affected dryer which has not been modified by Whirlpool is advised to contact Whirlpool on 0800 151 0905.

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