Our roundup of the weeks housing related news.

Tenant Fees Bill – a missed opportunity?

The London Mayor has said that the Tenant Fees Bill as currently drafted is a watered down version of what it should be and is a missed opportunity.

It must go further to end  “rip-off” fees and extortionate deposits.  The cost of moving for Londoners is now £3,700 and the bill allows agents to charge other ‘extortionate’ fees which are spread throughout the tenancy.

He is, according to this article, calling for

• capping rental deposits at three weeks’ rent, and capping holding deposits at one day’s rent;
• scrapping provisions for new and potentially exploitative ‘default fees’ to be written into tenancy agreements, and for ‘charges to enact a change of sharer’ which will fall disproportionately on renters living in shared housing; and
• increasing the penalties councils can charge for illegal fees to £30,000
• enabling tenants to directly claim back prohibited payments along with compensation worth up to three times the fee paid.

Mind you, I’m not sure of the wisdom of drafting legislation based on conditions in London alone which is very different from the rest of the country.  Then there is also the impact on Landlords to consider.  For example

RICS predict big rent hikes due to exiting landlords

In this article and elsewhere there are reports of RICS predictions of rent rises over the next five years:

Rents are expected to increase by nearly 2% across the UK over the next 12 months, according to the latest survey from the Royal Institution of Chartered Surveyors (Rics).

Small landlords are selling up following tax changes that have made buy-to-let properties less lucrative. Rics said they are being hit by the withdrawal of tax breaks and the extra 3% on stamp duty on second homes. At the same time, more people are looking to rent, partly because they cannot afford to buy their own homes.

It also looks as if rent hike would have been even worse if many landlords were not subsidising their good tenants by keeping rents at below market value so they can continue to live there.

Of course, the government specifically wanted the tax changes to discourage small buy to let landlords.  Their idea being, apparently, that this will allow first-time buyers – preferably younger people and families with children – to buy more properties thus converting them to grateful Tory voters, as happened when Mrs Thatcher sold off council housing.

But the trouble is, as the RICS report points out, first-time buyers and particularly families with children can’t afford to buy – as property is too expensive for them.  So the net result of all this is that the rental market is shrinking.  Leaving people who can’t afford to buy with fewer options.  And higher prices.

Is that what you wanted Mrs May?

RICS is calling on the government to urgently review the former Chancellor George Osborne’s tax reforms and is forecasting a rise of around 2% over the next year and by 15% by the middle of 2023.

Abdul Choudhury, RICS policy manager, said:

While the current focus is rightly on using regulation to improve the experience for tenants, the Government must urgently look again at the PRS as a whole, including ways to encourage good landlords.

Ultimately, the Government must consider the impact of its policies, and if the wish is to move away from the PRS, it must provide a suitable alternative.

As Ben Reeve Lewis’s series on criminal landlords on this blog shows – they are the only landlords who appear to be flourishing just now. Is that what the government wants?

Unlawful Licensing fee

This report on Nearly Legal is on a decision of the High Court that the LB of Richmond’s licensing fee is unlawful as they are not allowed to factor in the cost of enforcement of the scheme when setting it.

Nearly Legal feels that this is bound to be appealed so we will hear more about it later.

However, this decision will encourage Councils to serve even more Penalty Charge Notices as they can keep the charge.  Always provided the landlord pays it of course.

Snippets

• A landlord is ordered to pay £12,000 compensation after burning a tenant’s belongings
• The RLA is calling on the Chancellor to make energy improvements tax deductible
• The London Mayor urges the government to allow London to keep stamp duty receipts
• David Lammy is calling for action after documents show that multiple warnings were made about fire safety at Grenfell which were ignored
• The hearing of the legal challenge to right to rent is set to take place on December 18 and 19 2018
• Landlords are worried about further tax hikes in the autumn budget

Newsround will be back next week.