Tag Archives: legal
UK’s private rented sector sees evictions rise to record high
A rise in evictions in the private rented sector and the use of Section 21 accelerated possession procedures is a stark insight into the severity of the UK’s housing shortage, it is claimed. It is also a reflection of the impact increased legislation is having on the private rented sector, according to Paul Shamplina, founder of specialist landlord possession services firm Landlord Action. The latest figures from the Ministry of Justice show that total evictions last year reached a record high of 42,728. Whilst overall possession claims fell during the year to 148,043, the number of accelerated possession cases continued their upward trend reaching 37,663 in 2015, up 4.5% on 2014 and up 10.5% on 2013. ‘Rising rents and welfare cuts are undoubtedly to blame for the growing number of evictions. With a shortage of affordable properties, particularly in the capital, the imbalance of supply and demand has pushed rental inflation well beyond the levels at which tenants’ wages have risen,’ said Shamplina. ‘Many simply can’t keep pace and are falling into arrears. We’re seeing more subletting scams and cases of tenants renting out properties on holiday websites in order to cover their rent than ever before,’ he added. According to the figures the proportion of claims made using accelerated procedure has increased from 7% in 1999 to 25% in 2015. Shamplina explained that there are several reasons for this including rising house prices, uncertainty over future buy to let tax implications and concerns over increased legislation such as Right to rent and the Deregulation Act which have been the catalysts for many self-managing landlords to consider selling up. They use Section 21 as a way to gain possession of their property as quickly as possible. In other circumstances, where tenants are in arrears, Landlord Action says many landlords still opt to use a section 21, instead of Section 8. Some landlords feel they won’t be able to collect rent arrears so this allows them automatic right of possession without having to give any grounds (reasons) once the fixed term has expired. Other landlords are being forced down the Section 21 route because local councils are advising tenants to remain in properties until a possession order has been granted by the courts. This means they can apply for re-housing and do not make themselves voluntary homeless. ‘A section 21 usually enables landlords to gain possession much quicker on a no-fault basis, so they can re-let the property, which is often more financially viable than chasing arrears. I believe use of the Section 21 process for landlords will continue to grow year on year because of councils’ pushing the problem back onto private rental sector landlords,’ said Shamplina. Continue reading
Draft code of practice for lettings agents released in Scotland
The Scottish Government have released a draft code of practice for letting agents which will mean a huge shake up in the industry before it comes into force in 2018. The Letting Code of Practice (Scotland) Regulations 2016 has been structured in eight sections to mirror the lettings process and sets out the standards expected of letting agents operating in Scotland in how they manage their business and provide their services. It covers key areas such as standards of practice, engaging landlords, lettings, management, maintenance, ending tenancies, communications, complaints, deposits and insurance. Under the code Scottish ministers will establish and maintain a register of letting agents. The regulations will also allow them to remove a letting agent from the register if they are no longer ‘fit and proper’. The Association of Residential Lettings Agents (ARLA) welcomed the introduction of a statutory code of practice for letting agents and said that it will help to further professionalism in the industry and drive up standards. ‘We contributed to the Scottish Government’s consultation on the code last year and we are pleased that they have taken on board a number of our recommendations over procedure and wording,’ said ARLA managing director David Cox. ‘It is also very pleasing that the code has a requirement for agents to have professional indemnity insurance and client money protection. These are two requirements of ARLA membership and mandatory CMP is something we are campaigning for in England to provide greater protection for landlords and tenants if things go wrong,’ he explained. But ARLA believes that there should be more detail about what agents should do if disputes occur around tenancy deposits. This is because an agent may be required to co-operate with any investigation by an independent body if a dispute is raised between either the landlord or tenants and this is not always clear in the relevant scheme’s rules for disputes. ‘On the issue of training and qualification ARLA has long campaigned for greater regulation for letting agents and believe that mandatory qualifications will promote professionalism and basic standards within lettings that will benefit businesses and consumers. We look forward to seeing more detail from the Scottish Government in this area,’ added Cox. Kaira Massie, solicitor in the Law Society of Scotland’s professional practice team, said that there has been very little scrutiny of letting agents until now and having a new, statutory code of conduct will improve the situation for both landlords and tenants. ‘Solicitors in Scotland are already subject to stringent rules of admission and detailed practice rules covering professional ethics and conduct and many other aspects of practice. While solicitors will still be subject to the new letting agency scheme, there will be less duplication than was in the original proposals,’’ she pointed out. We’re pleased that the Scottish Government has considered many of the points we raised. The regulations now take into account that solicitors are required to have indemnity to… Continue reading
Conveyancers set for a year of change ahead in UK home buying industry
The outlook for conveyancers in the UK is looking like one of change with extra stamp duty and high demand set to make 2016 a buoyant year for the industry, according to the latest sentiment tracker report. Some 27% of conveyancers believe transaction levels will increase by up to 20% this year, according to the report from Searchflow. It also says that with the UK Government encouraging first time buyers to the market and pledging to build new homes there will be change in the industry. The conveyancing industry is very likely to see a rush to complete property purchases prior to April when the extra stamp duty on buy to let and second home purchases becomes active. But according to Maud Rousseau, the firm’s group marketing and communications director this is likely to settle later in the year. ‘If rents remain high and housing stock is still in short supply, buy to let will remain a profitable investment for many. The market will continue to be boosted by new homes,’ she added. She also pointed out that last year saw a record level of new homes being built, up 25% year on year and reaching the highest annual increase in a generation. This trend is set to continue as the Government continues to roll out planning reforms to help increase housing supply. Technology is also set to have an impact. ‘With the advancement of agile technology and big data analytics, search companies are seizing upon the opportunities to drive through major changes. Data and technology providers are working together to create a one stop shop to not only streamline the process but help improve risk management,’ said Rousseau. ‘The trend for transparency within the conveyancing sector will continue to drive the delivery of new product offerings tailored for the homebuyers. These products will enable conveyancers to provide their customers with an improved service, whilst also benefiting from reducing their time required to update clients,’ she explained. The impact of online estate agents is set to be a major topic of debate this year is another issue highlighted in the report and it says that the conveyancing industry needs to be prepared to adapt quickly if online estate agents achieve their ambition of being ‘highly disruptive in the world of estate agency’. This year, there are a number of planned consultations that could have a very significant impact on the conveyancing sector. They included the Government’s consultation on the privatisation of the Land Registry will be closely monitored. And in advance of the review of Legal Services Act which is scheduled to be reviewed during this parliament, the Government has announced its consultation on alternative business models entering into the legal sector. The Government claims that it wants to ensure that innovative businesses are able to enter the market, providing greater choice for consumers. The Solicitors Regulation Authority (SRA)… Continue reading
