Posts with tag: letting agents

Client Money Protection (CMP) Schemes to become Compulsory Next April

Published On: May 4, 2018 at 8:29 am

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All property agents will need to be part of an approved CMP scheme from the 1st of April 2019

Next year could be a big year for property agents, with yesterday’s announcement from the Government that all property agents will need to be part of an approved Client Money Protection (CMP) scheme from the 1st of April 2019.

Essentially, the CMP is a way for property agents to protect their clients against theft or misappropriation of the client’s money.

David Cox, Chief Executive, ARLA Propertymark comments on the announcement from the Government that all property agents will need to be part of an approved CMP scheme by 1st April 2019:

“After a long fight, ARLA Propertymark’s campaign for mandatory Client Money Protection (CMP) is finally won. With the help of Baroness Hayter of Kentish Town, and cross-party consensus in the House of Lords, this is a vital step forward in improving consumer protection in the rental sector; probably more so than the myriad of other laws passed over the last two decades.

We look forward to working with the Government to guarantee that the level playing field we’ve fought so hard to create becomes a reality on the 1st April next year.”

What exactly are the benefits of a CMP?

The idea of the CMP is to help provide compensation to landlords, tenants and other clients if a property agent misappropriates their rent, deposit or any other client funds. The purpose of making this scheme compulsory is to raise standards across the industry in order to protect the consumers who need it most, and as such, the recent changes to the legislation are an integral part of this. In short, key benefits include:

  • Protecting sums of money, which builds trust and confidence among landlords, tenants and other clients
  • Sets agents apart from other agencies who are less reliable or trustworthy
  • Tenancy Deposit Scheme (TDS) will offer a £1.50 discount per tenancy deposit if you have CMP through the Property Mark’s scheme
All property agents will need to be part of an approved CMP scheme from the 1st of April 2019

All property agents will need to be part of an approved CMP scheme from the 1st of April 2019

For the last three years (since May 2015), it’s been a legal requirement for lettings agencies to display details of the property redress scheme that they belong to. This also includes any fees, as well as displaying their membership of a CMP, if they had one.

The campaign by ARLA, which has celebrated the success of this scheme becoming compulsory, was started to raise awareness for the belief that letting and property agents should have to belong to a CMP.

When the legislation passed in parliament, on the 28 March 2017, the Parliamentary Under-Secretary of State, DCLG and Wales Office, Lord Bourne of Aberystwyth commented:

“My Lords, I thank the noble Baroness and the noble Lord, Lord Palmer of Childs Hill, for their time and commitment to the client money protection review. I am pleased to announce that the Government intend to make Client Money Protection mandatory in line with the recommendation of the review chaired by the noble Baroness and the noble Lord, Lord Palmer of Childs Hill.

“This will ensure that every agent is offering the same level of protection, giving tenants and landlords the financial protection that they deserve. The Government will consult on how mandatory Client Money Protection should be implemented and enforced.”

 

Scottish Landlords Achieving Strong and Stable Rental Yields

Published On: October 31, 2017 at 9:51 am

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Categories: Landlord News

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The rental yields achieved by Scottish landlords remain highly competitive when compared to other asset classes, according to the latest index from Your Move Scotland.

The average rent north of the border reached £574 per month in September, which is broadly in line with the price recorded in August and in the same month last year.

Four of the five Scottish regions experienced rent price growth in the 12 months to September, led by increases in the Highlands & Islands, where prices are 5.6% higher than last year, hitting an average of £610 a month, which is significantly higher than the £576 seen in September 2016.

Scottish Landlords Achieving Strong and Stable Rental Yields

Scottish Landlords Achieving Strong and Stable Rental Yields

The next highest growth was recorded in Edinburgh & the Lothians, where the average rent rose by 4.5% in the past year to reach £669 a month, which is the highest average rent price in Scotland.

Glasgow & Clyde was the only region to witness a year-on-year rent price drop, with the average value down by 6% to £541 in September, from £579 in the same month last year.

According to Your Move, Scottish landlords achieved an average rental yield of 4.8% in September, which, although down slightly from the 4.9% recorded in August, is a significantly higher return than the majority of properties in England and Wales achieve, which is an average of 4.4%.

Only landlords with properties in the North East and North West of England enjoyed higher average yields than those in Scotland.

The Lettings Director of Your Move Scotland, Brian Moran, says: “With four of the five regions of Scotland showing price growth in the last 12 months, things are looking up for Scottish landlords. Returns remain highly competitive and landlords are enjoying greater stability from their tenants.”

However, Moran is urging all landlords in Scotland to prepare for upcoming changes to legislation.

From 31st January 2018, the Letting Agent Code of Practice will come into force, and agents will have to declare themselves compliant with the new scheme.

Letting agents will be legally required to join a register of agents, and Your Move Scotland is calling on landlords and property investors to enquire with their current agent as to whether they are complying with the new rules.

Letting agencies must have submitted an application to join the Code of Practice by 30th September 2018. From that point, it will be a criminal offence to conduct letting agency work if you are not on the register.

Those breaking the rules, which are intended to increase professionalism in the sector and ensure that agents are able to handle money from landlords and tenants effectively, could face a fine of up to £50,000 and up to six months’ imprisonment.

“The upcoming introduction of the Letting Agent Code of Practice means landlords should ensure their agent is ready for the changes,” Moran adds.

Surge in Rent Price Rises Comes to an End

Published On: October 26, 2017 at 9:03 am

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Categories: Lettings News

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The surge in rent price rises seen over the last few months has come to an end, according to the Private Rented Sector Report for September from ARLA Propertymark (the Association of Residential Letting Agents).

Surge in Rent Price Rises Comes to an End

Surge in Rent Price Rises Comes to an End

Rent price rises

After several months of rent price rises, the number of letting agents who saw landlords increasing costs for tenants dropped to 27% in September, from 35% in August.

Showing signs that the rental market is heading in the right direction, this is the first month-on-month decrease since May, when the figure also stood at 27%.

However, on an annual basis, the amount of tenants experiencing rent price rises is up – in September last year, just 24% of letting agents saw costs increase.

Demand for rental properties

Last month, there was an average of 79 prospective tenants registered per letting agent member branch – up by 10% on August, when there were 72 per branch.

Supply of rental stock

The number of rental properties managed per member branch remained the same on a monthly basis in September, at an average of 189.

This is down by 2% on September 2016, however, when agents managed an average of 193 properties.

David Cox, the Chief Executive of ARLA Propertymark, comments on the report: “Last week’s consumer price index (CPI) showed that inflation rose to 2.8% in September, up from 2.7% in August. As the cost of living increases, the last thing tenants need is for their rents to rise, so, while it’s great that month-on-month we’re finally seeing a decrease in the number of landlords hiking costs, we need to look at the bigger picture.

“There are still more than a quarter of tenants experiencing rent hikes every month – and that’s too high. As summer drew to a close in September, demand increased in line with our expectations, and, while it’s too soon to see the effect of this on rent costs, we know that when supply and demand are conflicting, rent prices will just continue to rise.”

Although the decline in the number of letting agents seeing rent price rises is good news, another recent report suggests that around a quarter of tenants are still paying over half of their earnings on rent every month.

Government Urged Not to Forget Client Money Protection

Published On: October 26, 2017 at 8:46 am

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Government Urged Not to Forget Client Money Protection

Government Urged Not to Forget Client Money Protection

SAFEagent is urging the Government to ensure that plans to make Client Money Protection (CMP) mandatory for letting agents are not forgotten, following the recently announced proposal to regulate all letting and property management agents.

The campaign group has written to the Housing Minister, Alok Sharma, to call on him to push forward with the plans.

John Midgley, the Chair of the SAFEagent steering group, says: “Since we launched SAFEagent in 2011, we’ve been raising awareness among consumers that any agents they engage with should be part of a CMP scheme. This is a really important part of protecting tenants and landlords.

“We welcome the Government’s announcement that it intends to introduce regulation to the lettings and management sector. But this move shouldn’t be to the detriment of the good work it’s done moving towards mandatory CMP.”

He continues: “While most agents run good, professional businesses, there are still instances where rogue agents misappropriate clients’ funds. If they are not part of a CMP scheme, there is no recourse for those clients.

“Therefore, we’re urging the Government to move forward with the consultation on the implementation and enforcement of CMP at the earliest opportunity.”

In March this year, the Government recommended compulsory CMP for all letting agents in England, with an enabling amendment due to be added to the Housing and Planning Act. However, since this move, very little has been heard on when mandatory CMP will be introduced.

The measure has long been in the news, with plans originally announced back in April 2016, when the Government first considered the change.

It is believed that one in five landlords and tenants are unprotected by CMP – we urge all landlords and tenants to check whether their letting agents are registered with a CMP scheme before placing business with them. This could save you in the long-term.

30% Believe that Using High Street Letting Agent to Rent Property is Outdated

Published On: October 23, 2017 at 8:13 am

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Over 30% (31%) of UK adults believe that using high street letting agents to rent a property is outdated and burdened by reams of paperwork, according to a study of 2,000 adults by virtual letting agency LetBritain.

30% Believe that Using High Street Letting Agent to Rent Property is Outdated

30% Believe that Using High Street Letting Agent to Rent Property is Outdated

The research revealed that 25% of adults prefer to use online-only services, such as Gumtree or Spareroom.com, to source and secure a rental property, with 32% of landlords and tenants not having the time to use services that require them to visit a physical premise within working hours.

And its not only the lettings sector that is frustrated by the archaic processes still being used by high street businesses.

Half of consumers (51%) say that they rely on online solutions for the vast majority of their products and services, while 45% favour online services over ones that require them to go to physical premises.

A high proportion of adults (29%) refuse to use a business if they have no online service altogether.

The research shows that Londoners are the most technologically demanding, with 62% opting for online solutions and a majority (51%) consciously avoiding businesses that do not offer online services.

Looking to the future, 57% of UK adults – that’s 29.3m people – believe that online or app-based competitors will replace businesses with no online presence in ten years’ time, by 2027.

The CEO of LetBritain, Fareed Nabir, comments: “Over the past decade, online solutions have drastically transformed the way we conduct business. Today’s research clearly shows that consumers not only expect but now demand that companies provide their services online. And, on that point, the rental market is clearly falling short, with too many high street real estate agents failing to embrace digital solutions, relying on cumbersome offline processes. For businesses in the rental market, the choice is simple – integrate and embrace online solutions, or run the risk of being outpaced by changing consumer demand.”

Are you putting digital processes in place to cater to online demand from tenants?

Government Focus on PRS is a Positive, Insists PropTech Firm

Published On: October 20, 2017 at 10:01 am

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Categories: Property News

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The Government’s focus on the private rental sector (PRS) should be considered a positive by those working in the lettings industry, according to proptech firm PayProp UK.

The lettings industry supplier says that the move towards increasing regulation of the PRS shows just how integral a part of the wider UK housing market it has become.

According to the latest English Housing Survey, the PRS now accounts for around 20% of all households, while the proportion of homeowners has dropped from 71% to 63% since 2003.

More recently, the Government announced that it is considering whether to introduce a regulatory body to handle leasehold and private rental property management, as well as letting agents.

Government Focus on PRS is a Positive, Insists PropTech Firm

Government Focus on PRS is a Positive, Insists PropTech Firm

And, at the Conservative Party conference earlier this month, the Communities Secretary, Sajid Javid, announced a number of PRS proposals, alongside Theresa May’s measures to boost housebuilding.

Javid said that the Government wants to fix the property management industry, while reducing costs and protecting consumers from the minority of rogue agents still operating. The Conservatives argue that, as well as leaseholders, millions of tenants are being overcharged for repairs and services passed down to them.

Via a six-week consultation, the Government is now calling for evidence on whether regulatory overhaul of the property management system is necessary.

Javid also informed the conference that he hopes to introduce regulation for all letting agents, referencing the fact that, currently, anyone can start operating as a letting agent without “qualifications or professional oversight”.

The Department for Communities and Local Government (DCLG) is therefore proposing the introduction of minimum training requirements and compliance with an industry code of conduct.

There were also proposals to introduce incentives for landlords offering longer-term tenancies, and the requirement that all landlords become members of a redress scheme.

The COO of PayProp UK, Neil Cobbold, says: “While we eagerly await the details of all these proposals, it has to be said at this stage that they represent a positive step forward for the industry.

“There have been campaigns for the regulation of the industry for a long time now and, this month, it’s become clear that the issue is high on the Government’s agenda.”

He continues: “Requiring all landlords to be members of a redress scheme will ensure that 100% of tenants have access to a fair and impartial complaints procedure.

“Meanwhile, there’s clearly an appetite to extend minimum tenancies and, with more people now renting privately for longer, we can understand the Government’s thinking behind this proposal.”

In the lead up to the Conservative Party conference, PayProp called on MPs to consider appointing an independent housing tsar.

“We still believe the idea of taking oversight of the property sector away from party politics should be considered but, if implemented properly, these proposals could really help the industry,” Cobbold claims.

A regulated PRS, with more stringent basic guidelines for letting agents, could benefit the whole industry, according to PayProp.

“Minimum standards for letting agents will mean a better level of service across the board, as well as an improved public perception of the industry,” believes Cobbold. “Increased professionalisation of the sector is a must, and will help to improve transparency and stamp out the minority of rogue landlords and agents still operating.”

He adds that, as the PRS continues to grow, the Government’s awareness of its importance will prove crucial.

“The fact that politicians continue to monitor the growth and expanding influence of this tenure type is positive and necessary, as homeownership levels in this country continue to decrease,” he concludes.