It’s been a busy year in the world of property, with the introduction of major new rental legislation and a working group putting forward its plans on how the property industry could be better regulated.
There’s been movement on the leasehold scandal, promises by all sides of the political divide to scrap controversial ‘no fault’ evictions, proposed changes to Shared Ownership and the closure of the Help to Buy ISA to new customers.
And that’s before we even mention the impact of ongoing Brexit uncertainty and political upheaval.
Below, we take a quick look at what’s been happening in the property sector in 2019.
New legislation comes into play
The Tenant Fees Act 2019, brought in on June 1, was the biggest legislative change to the property industry for years – radically transforming the rules and regulations in the private rented sector
on things like fees and deposits.
After a long journey through Parliament (former chancellor Philip Hammond announced the plans back in 2016), the Act finally became active after considerable opposition and amendments.
Under the new rules, nearly all upfront fees charged by letting agents and landlords are outlawed, while security and deposit fees are both capped. This means, when granting a new tenancy, agents and landlords are no longer able to charge for credit, immigration and reference checks, while fees for guarantor forms, inventory checks, domestic cleaning, professional cleaning and administration costs are also banned.
While the ban only applies to renewals of tenancies and new tenancies at present, it will be applicable to pre-existing tenancies from June 2020 onwards. You can find out all about the Act here
We also saw the introduction of the Homes (Fitness for Human Habitation) Act
in March. The Act, led from the front by Labour MP Karen Buck, means that landlords must ensure their property is always free of any hazards and fit for human habitation. Properties that breach the updated legislation are liable for court action, with the law designed to empower tenants.
Lastly, a law affecting all agents – sales and lettings - took effect from April, with it becoming a requirement for all agents to join a government-approved Client Money Protection (CMP) scheme or face up to a £30,000 fine.
The new law is designed to make sure that client funds, including landlords’ rental payments and tenants’ deposits, will be protected. This reassures people across the industry that their money is safe while with their agent.
To join a CMP, agents must have a separate client bank account and professional indemnity insurance, with access to a CMP scheme often coming through their membership of agency bodies such as ARLA, RICS, NALS, or UKALA.
Working group outlines transformative plans
In July, a report from the Regulation of Property Agents (ROPA) working group was released, containing a number of recommendations for the government on a new regulatory framework for agents.
The working group
, chaired by Lord Best and made up of industry and consumer experts, was brought together in October 2018 and examined options for raising standards across the whole property agent sector.
The working group recommended having a single, mandatory and legally-enforceable Code of Practice, a system of minimum entry requirements and continuing professional development, and a clearer means of clarifying processes and charges for leaseholders.
In addition, the working group argued for a model for an independent property agent regulator, recommending how it will operate and how it will enforce compliance. This page from ARLA’s website explains
everything in more detail.
While government and industry were broadly supportive of the measures outlined by the ROPA working group, there has been little information since on when these measures could be implemented.
This is only likely to become clearer once the Brexit impasse is resolved and we have a clearer indication of the direction of travel the country is taking.
Help to Buy ISA deadline hits
The Help to Buy ISA closed to new applicants on 30 November.
Existing holders of a Help to Buy ISA can continue contributing until November 30 2029, with the government bonus on offer until December 1 2030.
The interest rates offered could fall, however, as the market becomes less competitive, with savers urged to review their account regularly and make sure it still meets their needs.
While supporters say the Help to Buy ISA has been a success because of the number of people who have opened an account, it’s not without its critics.
These point to the misleading nature of the scheme, given that people can’t actually use the government bonus as part of their deposit. The government only pays out the bonus once the home has been completed on, with a solicitor or conveyancer applying for the extra 25% on their clients’ behalf.
Last year we looked at how at the Help to Buy ISA came in for fierce criticism
after the revelation that 45,000 users faced delays in their purchases when attempting to release deposit funds from the ISA.
Supporters, though, will point to Treasury figures showing that almost 260,000 properties have been bought using the ISA across the UK, with the data also revealing that 339,747 bonuses have been paid through the scheme, with an average value of £943.
Whilst the Help to Buy ISA came to an end, the Lifetime ISA
is still going strong, with more and more banks and building societies offering it now.
All change, all change
This year started off with Kit Malthouse as Housing Minister and James Brokenshire as Housing Secretary. By July, former Cabinet minister Esther McVey had replaced Malthouse and Robert Jenrick had taken over from Brokenshire as part of a reshuffle by Boris Johnson.
There is every chance, by the end of this year, we could have an entirely new housing minister and secretary all over again.