In our manifesto: Regulation | Stamp duty on additional properties | Property MOTs | Incentives for downsizers | Housing court system | Digital logbooks | Unfair clauses in leaseholds | Local Housing Allowance (LHA) cap and Universal Credit | Database of rogue landlords and property agents | Landlord taxes | Short term lets | Energy efficiency in private rented sector | Flood Re
Propertymark’s Manifesto: what the next Government should do for housing
Propertymark has written its own manifesto outlining what we believe should be done by the Government to improve the housing sector. The issues will affect tenants, landlords, buyers and sellers in the UK.
Regulate property agents
Recommendations were made by the Regulation of Property Agents (RoPA) Working Group in July 2019, encouraging the Government to create a regulator for all letting and managing agent in England, estate agents across the UK and anyone who deals with certain aspects of property.
Note: The private rented sector is a devolved issue and that the Welsh and Scottish Governments have already introduced legislation to regulate letting agents.
The new Government should commit to bringing this regulation in as soon as they can, which would mean all agents would have to be qualified, licensed and follow a strict code of practice.
The Government has announced that their Renter’s Reform Bill will work to professionalise letting agents. We hope to see further announcements expand this to estate agents as well, to ensure that consumers deal with professional and qualified agents.
Get rid of the 3% extra stamp duty tax on additional properties
Those who are buying a new home to live in before they have sold their current one or are buying their first property with a Guarantor Mortgage are currently being charged the 3% extra stamp duty. This tax has also affected the supply of properties in the private rented sector
We believe removing the tax would make buying a property less expensive and boost the number of properties available to rent.
There has been no formal announcement on changes to stamp duty by the Government, but they have announced a discount of at least 30 per cent on First Homes for local people and key workers.
Bring in property MOTs
Currently, some local authorities use licensing schemes to try and improve the quality of landlords and their properties, Propertymark doesn’t believe this works.
The Government announced that they aim to improve standards in rented accommodation, driving out rogue landlords with all tenants having a right to redress if their rented properties are not safe and healthy.
We firmly believe that Property MOTs, if introduced, would help achieve this.
Remove stamp duty for downsizers or offers incentives for them to move
Propertymark believes older homeowners who want to downsize into a smaller home should be encouraged through a stamp duty exemption. There should also be a programme of building specialised homes for older people and over-65s bonds for downsizers.
There has been no formal announcement on changes to stamp duty by the Government as of yet.
Reform the court system for housing
Currently, it can take months for possession of property cases to reach the courts. The proposed ban on Section 21 evictions in England and restrictions on its equivalent in Wales is likely to put even more pressure on the current court processes as well.
By introducing a dedicated Housing Court for England and Wales, the time taken for a landlord to regain possession of a property or a tenant to argue their case would be cut considerably and would make the process straightforward for everyone involved.
The Government has announced that they will work to improve the court process for landlords to make it quicker and easier for them to get their property back sooner and reform the grounds for possession.
Introduce digital logbooks for every property bought and sold
Propertymark believes that the Government should introduce digital logbooks to speed up the process of buying and selling property and help cut down the amount of failed property transactions.
Digital logbooks would allow for a more interactive, streamlined and transparent process for home buyers and sellers.
The Government has made no mention of improving the property buying and selling process as of yet.
Rules to resolve unfair clauses in leasehold agreements
Some property developers have put clauses in their leasehold agreements that expect homeowners to abide by a lot of rules that may be unfair or difficult to follow.
Legislation should ideally be brought in that ensures these developers offer a way to make things easier for those dealing with properties that have such clauses. This would encourage mortgage providers to lend to people who wish to buy these properties and help encourage the sale of existing leasehold properties.
The Government said they are taking forward a comprehensive programme of reform to end unfair practices in the leasehold market, including working with the Law Commission to make buying a freehold or extending a lease easier, quicker and more cost-effective – and to reinvigorate commonhold and Right to Manage.
End the Local Housing Allowance (LHA) cap and improve how Universal Credit works
The cap on Local Housing Allowance is affecting those who receive it, by making it difficult to find good quality and well-managed accommodation. The cap should be lifted to accurately reflect the current cost of renting.
For Universal Credit, Propertymark believes the following must be done:
- Give tenants the choice of whether the housing element of their Universal Credit is given to their landlord.
- Bring in the option for tenants to be paid their Universal Credit twice monthly to help with budgeting
The Government has announced an end to the LHA freeze for it to rise in line with inflation, but we feel that LHA rates are still too low to cover realistic rent prices.
Open the database of rogue landlords and property agents to the public
The Database for Rogue Landlords and Property Agents is currently only available to local authorities. By opening it to the public, it would mean that tenants and other landlords would be able to see if they can trust who they’re dealing with.
The database would become a stronger deterrent to rogue landlords and agents, as everyone would be able to see who is on the list.
The database of estate agents should also be merged into it as well, to stop any rogue agents trying to move from selling property to lettings.
The Government has announced that they have committed to giving access to information on the database of rogue landlords and property agents to tenants and has consulted on widening the scope for entries on the database.
Review landlord taxes
Taxes currently relating to private landlords must be reviewed. Additional tax on buy-to-let properties, less tax relief on mortgage interest and additional costs brought on by the Tenant Fees Act 2019 has meant that landlords are paying significantly more to keep their properties.
If the new Government were to review these current costs and bring in policies that help reduce them, more individuals will be encouraged to invest in the private rented sector, which would help reduce rent for tenants, making renting more affordable.
The Government has made no mention of changes to landlord’s tax or tax relief as of yet.
Introduce regulations for short term lets
Short term lets need new regulations. Local authorities currently have no powers to license or register short-term lets (under six months), which can be offered as either private rooms or entire homes.
More legal requirements are being put on letting agents and landlords, but not as many are being put on short-term lets. This could lead to more properties being taken out of the private rented sector and turned into short-term lets instead.
This becomes a problem, as fewer properties become available for tenants and short-term let properties are less regulated, sometimes resulting in lower quality accommodation.
The Scottish Government has announced measures to provide local authorities with the ability to implement licensing schemes to regulate short-term lets from Spring 2021. There has been no mention of similar regulation for the rest of the UK, as of yet.
Help the private rented sector with energy efficiency and combatting climate change
Landlord’s Energy Saving Allowance (LESA) should be reintroduced and include anything contained within the Recommendation Report of an Energy Performance Certificate. The allowance lets landlords claim money to make their property more energy-efficient.
Currently, private landlords have little access to any funding to make energy efficiency improvements to their property, with most having to use their own income to do so.
Setting targets for landlords to improve the energy efficiency of their homes is meaningless if the Government doesn’t offer the support to achieve them.
The Government has announced that they will help lower energy bills by investing in the energy efficiency of homes; but no specific mention of funding for landlords or the private rental sector has been announced.
Extend Flood Re to the leasehold and private rented sector
Flood Re currently helps homeowners in high-risk flood areas get affordable home insurance. However, their obligation currently doesn’t include the private rented sector or the leasehold sector.
Propertymark estimates around seven million homes are excluded from Flood Re’s insurance obligation, meaning that they don’t currently have the benefit of affordable insurance, despite the risk of flooding.
The Government have made no mention of flood insurance but have said that they are investing £4 billion in flood defences.