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Tessa Shepperson Newsround #48

Quite a few news items for you today.  Probably we should start with

The tenant fees bill

The Tenant Fees Bill has now been introduced to Parliament and they have published a response to the Select Committee Report and an impact assessment.

The impact assessment is interesting.  It admits that the cost of this exercise is going to fall heavily on Landlords and agents:

The main costs fall on landlords and Letting Agents as a result of the ban on tenant fees. We estimate in total, in the first year of the policy, the cost to landlords will be £82.9m whilst the cost to letting agents is estimated at £157.1m. This estimate includes pass throughs, for example, by letting agents charging landlords higher fees. We estimate familiarisation costs (as transition costs) in Year 1 totalling £44.7m to both landlords and letting agents.

There is an additional cost to landlords from the reduction of deposits estimated at £1.3m which on average start in Year 4.

So that’s going to please them.  Indeed, an article today from Ian Wilson of Martin says the government has got its figures wrong as his firm will lose £10m pa.

Deposits incidentally, are to be limited to 6 weeks, and not the 5 that was proposed by the select committee.

The report continues:

There is a potential negative effect on the closure of letting agents and employment losses, and on third-party suppliers to letting agents such as inventory suppliers. However, if it is the most inefficient agents that leave the market, then in turn market efficiency would improve

Hmm. Tenants will be the main beneficiaries of this, although this will be reduced by landlords increasing their rents.  However also

There are significant non-monetised benefits. 1.4m households moving home in the PRS in Year 1 will benefit from being better able to appraise their choice of home and be more empowered to challenge poor practices.

Landlords will benefit from potential lower incidences of rent arrears, and 16,000 letting agent branches may benefit from increased demand from tenants and innovation of business models. Wider society may benefit from a potential lower reduction in temporary accommodation costs and more money being spent in the economy.

It will be interesting to see if this actually happens.  Property Industry Eye has a good report here on all of the published documents, and also here.

Good news is that client money protection is going to be mandatory for all letting agents in England from April 2019.

Court modernisation

There is a big project currently underway to modernise the courts and (most importantly) save costs.  This is going to include the loss of 6,500 jobs – so more people who will have trouble paying their rents.

I am not the only person worried about all this.  Richard Burgon, shadow justice secretary, said:

“More staff cuts and court closures are yet another consequence of the government’s reckless decision to impose on the Ministry of Justice the deepest cuts of any department.

“The government should halt all further cuts and closures, at least until it has published its long awaited courts bill so that its worrying plans for the future of our courts system can be properly debated.”

Court changes and closures coupled with the massive loss of legal aid will I suspect mainly have the effect of making it more difficult for people to use the courts to uphold their rights and challenge the government.

Housing, Capitalism and Economics

Several of my news sources have been discussing an article published by architect Patrik Schumacher: ‘Only Capitalism can solve the Housing Crisis‘ on the Adam Smith Institute website where he is calling for ‘unfettered capitalism‘.

He blames the current high prices of land and property on government interference and says that the government should stop interfering to promote home ownership.We have too much restriction on land use, he says, too much nimbyism, and too many restrictions on things like room and property sizes.

I haven’t had time to read the article in detail, but despite the fact that it seems to be deliberately provocative there may be some good points in there.  However his suggestions about allowing smaller properties have predictably gone down like a lead balloon with some commentators (who needs living rooms anyway? asks Elle Hunt in the Guardian).

I prefer the article by Guardian economics editor Larry Elliott who says that many of our housing problems stem from high land prices and who suggests that the main problems are due to

the 1961 Land Compensation Act passed by Harold Macmillan’s government. This enshrined in law the right of landowners, in the event of compulsory purchase, to be reimbursed not only for the value of their land as it stood but for its potential value if it were used for something else in the future.

A system so heavily weighted in favour of landowners had two consequences. First, it provided them with an incentive to wait, often for years, before selling their land for development because they would get a higher price. Second, house-builders had to recoup the costs of buying the land and did so by building more expensive properties that were drip-fed into the market to keep selling prices high.

Which, if we want to encourage affordable home, makes no sense.

Councils, lobbyists and transparency

An interesting article in the Guardian looks at lobbyists promoting property companies interests and their influence on local Councillors.

Nick Kilby, a former Councillor and founder of one of these companies

explained that as well as entertaining, his firm produces briefing notes for planning committee members ahead of decision-making hearings.

“The job is to help the decision-maker understand what the pertinent views are,” he said, adding that councillors often don’t read planning officers’ reports so the consultants’ short briefings are relied upon.

Which when you think about it is extremely worrying.


  • A landlord has been protesting about s24 the tax changes by exhibiting these on a bill-board on a busy road.  There is talk of crowd-funding to help landlords put up similar billboards elsewhere.
  • Architects have revealed designs to refurbish Grenfell Tower Estate
  • Legal & General are looking to provide 3,000 affordable homes per year
  • Property Industry Eye wonders how much our new housing minister knows about housing

Newsround will be back next week.

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Tessa Shepperson Newsround #48


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