Category Archives: Government Regulations

A very local housing crisis and our crap politicians

In the UK, politicians and hand-wringing professionals from organisations like Shelter are always complaining about ‘Britain’s Housing Crisis’ and that ‘young couples can no longer afford to buy a home’ or ‘greedy buy-to-let landlords are snapping up properties that should go to first-time buyers’ and so on and on and on…

They say that prices have risen so fast that young couples can no longer afford to get on the housing ladder. They say we are in the midst of a ‘HOUSING CRISIS’.

Paxman asked why are our politicians so crap?

Well, in my opinion this is a very local housing crisis and one largely the fault of, to quote a recent brilliant Jeremy Paxman programme, our CRAP politicians. To coin a phrase, I agree with Jeremy. All our politicians and think-tanks etc say that we have to build more homes and they use euphemisms like ‘affordable’ and of course the stupid Labour Party always wants more ‘social’ housing and want to get rid of all those evil landlords.

But as usual all of them fail to see the bigger picture. Although in most parts of South East England house prices are indeed beyond the reach of most first-time buyers and young people are forced to pay very high rents to live in even ordinary accommodation, it’s not like that everywhere in Britain.

So in Camden, one of the fastest appreciating areas in terms of house prices, property is more than 3.5 times as expensive as it was 10 years ago. However, in parts of Liverpool prices are actually 44% LESS than they were 10 years ago! And prices are also actually LESS in parts of Bradford, Hartlepool, Middlesborough and Sunderland. And of course where they have risen, they have not risen nearly as much as in London.

Table showing details of negative changes in house prices in some northern cities and towns.

Property prices are driven partly by availability of credit, but also by DEMAND – the demand by people to live in areas of their choice. Part of that choice depends on availability of employment and availability of employment depends on investment, both public and private.

H2O Yes – HS2 No!

The government has totally failed over the years to invest in the North of Britain and to properly incentivise businesses to relocate there. They have failed to build the required infrastructure, particularly railways. Look at the insanity of two current massive government infrastructure projects, HS2 (or H2O as I heard it referred to by an LBC caller) and Heathrow Expansion.

Whilst being wholly in favour of H2O, HS2 on the other hand is an insane project, that even if built will largely benefit the South. And as for Heathrow expansion, that obviously will do nothing at all to boost the economies of northern towns and cities. and everything to make life even more intolerable for those living in and around London. Boris Johnson did promise to lie in front of the bulldozers to stop it but although extremely adept at lying about most things he isn’t going to lie in front of any bulldozers.

If we just continue to try and satisfy the insatiable demand of people to live in London and the South East of England by building more homes we will end up having to build more homes, and then still more homes and so on until the quality of life in the south east becomes intolerable. It’s already impossible to get anywhere easily on our crowded roads and packed trains and no one can get a doctor or hospital appointment within a reasonable space of time.

The sustainable solution

So, instead of bleating on and on about building more affordable homes whilst expanding Heathrow and spending an unimaginable amount of money on HS2, the government should invest properly in the North and offer real financial incentives to industry and business to relocate there. Then employment will increase, young people won’t be forced to relocate to London and the South East to work and the housing crisis will very gradually ease.

LandlordsandLetting – Affordable Landlord Insurances

Improving the home buying and selling process

The Department of Communities and Local Government is looking at ways of improving the home buying and selling process in the UK. Except Scotland, where it’s different.

Well, I say Three Cheers for them for finally addressing this problem. For too long, sellers have been able to gazump and buyers to gazunder, just before Exchange of Contracts. This is incredibly stressful and costly for both the gazumpee and the gazunderee – words as ugly as the practice itself!

I believe that the solution to improving the home buying and selling process is relatively simple. At present, when contracts are exchanged, the purchaser is required to deposit up to 10% of the purchase price. Very very rarely do people withdraw after this.

The Mini Deposit – Improving the home buying and selling process

So, all we need is a Mini Exchange of Contracts when an offer in writing is made and formally accepted. This is the point at which an agent typically issues a Memorandum of Sale. At this point both buyer and seller should be required by law to deposit a relatively small sum of, let’s say £1000 in Escrow. If either party choses to withdraw, offer less or demand more then the other party could receive their £1000 as compensation.

Of course, there would be certain circumstances wherein a purchaser could legitimately withdraw without forfeiting the £1000 mini deposit. Such circumstances could include cases where legal searches uncovered poor title.  Or perhaps a road passing through or close to the property in question.  A surveyor’s report  might have uncovered serious subsidence or dry rot. Again, if the seller accepted these findings and agreed voluntarily to reduce their price then the sale could still proceed.

However, where a purchaser, without good reason decides to offer less than the agreed amount then the deposit could be forfeited.  The seller would be at liberty to receive the purchaser’s £1000 and abort the sale. Similarly if the seller suddenly changes their mind or wanted more then the purchaser could elect to receive the seller’s £1000 and abort the purchase.

Concentrating minds at the point of the Memorandum of Sale

Apart from the stress of someone suddenly withdrawing, there’s the considerable legal and surveying costs that accrue. Thus the £1000 would at least go towards defraying these costs, but more importantly would concentrate the minds of both seller and purchaser at the point when an offer is made and accepted.

And of course this change in property law would not only benefit owner occupier sales and purchases but investment ones involving landlords and buy-to-let as well.

So, I think that’s a good way of improving the home buying and selling process in the UK. What do YOU think?

Landlords and Letting – Affordable landlord insurance

Letting Agents – landlords should avoid them!

Landlords – how to save around £5500 letting your property

There has been a lot of discussion recently about how letting agents regularly rip off tenants – and they do. The government is belatedly introducing legislation to restrict their fees to tenants. But they also rip off landlords and whilst it’s difficult for tenants to avoid them, it’s much easier for landlords, as long as their property is local.

Given letting agents outrageous fees to landlords, it’s incredible they have the nerve to invent all the other charges they make to tenants – that’s why most tenants and landlords alike dislike them.

Letting Agents’ charges to landlords

Agents love to talk in terms of percentages because it enables them to disguise the iniquitous levels of charging they engage in. So let’s take a property that the rent is £1500 per calendar month. I have taken as an example the quoted fees of a well know high street agent, which do include landlord rent guarantee insurance.*

I am assuming the case of tenants who remain in the property for a total of two years…

These agents charge 7.5% plus VAT for Sole Letting Rights – this means that WHOEVER lets the property this agent gets their cash.

The real costs of using a letting agent

  1. Letting fee for let only will be £1500 x 12 x 7.5% = £1350.00 plus VAT for the FIRST year, paid in advance.
  2. Let’s say you are stupid enough to use their ‘Full Management Service’. This involves collecting the rent – it just goes into their account before eventually going into yours. They deal with everyday calls from the tenants and make 6 monthly inspections etc. Add an EXTRA 6% plus VAT. So that’s £1500 x 12 x 6% = £1080.00 per annum extra plus VAT.
  3. Providing you with an Inventory – between £140 – £200. So, let’s say £170 on average.
  4. If the same tenants simply decide to stay on in the premises which involves the agent in doing VIRTUALLY NOTHING they will charge the landlord another 7.5% plus VAT – Yes ANOTHER fee, amounting to £1350.00 plus VAT

Let’s add up all the bold figures because they are indeed bold. That’s £1350.00 x 2 + £1080 x 2 + £170.00 = £5030 plus VAT where applicable.

So, you let a flat or house for £1500 pcm and end up paying the letting agent £5030.00 plus VAT, which is £6036.00! 

Even if you only elect for the let only service, over two years it would cost you £2700.00 plus VAT which is a massive £3240.00. And all this is paid up front at the beginning of each year.

Letting agents fleecing the tenants as well

So the letting agents get all this money from the landlord then they proceed to rip off the tenants for even more money!

They have various ingenious made up charges, such as ‘Administration Fees’, ‘Checking In Fees’, ‘Checking Out Fees’.

Then there’s the scandalous ‘Holding Fees’ to retain a property while referencing is carried out. It is reasonable to withhold them in the event that the tenants change their minds. But they also withhold these fees in the event that the references come back as unsatisfactory. These fees can be as much as £700 – £800. They probably hope they’ll come back as unsatisfactory.

Some letting agents charge tenants for ‘drawing up the Assured Shorthold Tenancy’ document’. This takes about 15 minutes to revise a template on their system.

And then there is referencing. Charging for this is justified, but for tenants in full-time employment with proof of previous address etc it COSTS around £10.00 per tenants. Many agents charge around £60 – £70 per tenant.

If you’re a landlord and you can, just let it yourself

As a landlord you can list your property on the main portals like Rightmove, Zoopla, Primelocation etc, using companies that will charge you around £60.00. You then ensure that you THOROUGHLY reference any prospective tenants rather than saying to yourself ‘Oh they seem such a nice couple’.

Don’t forget Landlord Rent Guarantee Insurance

Then you buy Landlord Rent Guarantee and Legal Expenses Insurance* – we do it for about £105.00 per property per year.  This insurance pays your rent in the event that the tenants stop paying for any reason and the legal team then go to work to evict the tenants as soon as possible. Strict tenant referencing is a requirement of this insurance. Let’s assume you charge the tenants for referencing, which is reasonable then your total outlay over two years will be about £170.00.

So it’s your choice. Pay a letting agent £3240.00 or £6036.00 including VAT or spend £170.00 letting it yourself. Some agents will charge even more than the amounts quoted above and some will negotiate for less but as the Americans say, I think it’s a no-brainer.

LandlordsandLetting – Affordable landlord insurances

Will you be forced to repay rent to your tenants?

Yet more anti-landlord legislation starts to become operative this April (2017). This one is unimaginatively called The Housing & Planning Act 2016.

How does it affect landlords? Will YOU be forced to repay rent to your tenants?

If you are found guilty by a tribunal of any of the following offences you can be ordered to pay back up to 12 months’ rent…

  • Failing to comply with an Improvement Notice under section 30 of The Housing Act 2004.
  • Failing to comply with a Prohibition Order under section 32 of The Housing Act 2004.
  • Any breach of a banning order made under section 21 of the Housing & Planning Act 2016 (this act)
  • If you use violence to gain entry to a property under section 6 of the Criminal Law Act 1977.
  • If you illegally evict or harass the occupiers of a property under section 1 of the Protection from Eviction Act 1977.

Making an example of transgressing landlords

The above applies whether you are receiving rent direct from a tenant or wholly or partly from the local authority. The act also states that tribunals need to take deterrence into account when fining landlords and urges making examples of transgressors to dissuade others.

Either your tenant(s) or the local authority can apply for Rent Repayment Orders.

These powers come into effect on 6th April 2017.

The main points of the new laws are…

• Civil penalties of up to £30,000 as an alternative to prosecution for certain specified offences.
• Extension of rent repayment orders of up to 12 MONTHS’ rent, to cover illegal eviction, a breach of a banning order and certain other specified offences (coming into force on 6 April 2017);
• There’ll be a database of rogue landlords and property agents who have been convicted of certain offences or received multiple civil penalties (scheduled to come into force on 1 October 2017);
• Banning orders for the most serious and prolific offenders (scheduled to come into force on 1 October 2017).

The full dreary details are here.

Landlords and Letting – Affordable Landlord Insurance

Can you afford NOT to have landlord rent guarantee insurance?

As buy-to-let has increased massively across the UK, partly due to the lamentable return on other kinds of investments, so too have the horror stories of nightmare tenants. First they suddenly stop paying the rent and when the hapless landlord finally evicts them, he or she is faced with possibly several thousands of pounds repair bills.

As a landlord, even if you’ve been lucky enough to avoid these vile people you probably know of others who have fallen prey to nightmare tenants. Just take a look at ‘Nightmare Tenants, Slum Landlords’ on Channel 5 and you’ll see dreadful cases of how a small minority of tenants can make life an absolute hell for small-time landlords.

Landlord Rent Guarantee & Legal Expenses Insurance

Admittedly there are also rogue landlords out there who equally make life hell for their tenants but that’s not what this article is about. This article is in fact about the importance of taking out Landlord Rent Guarantee and Legal Expenses Insurance – rogue landlords don’t need this insurance as they use other rather more direct methods!

In fact, the problem IS rogue landlords because I believe that it’s because of them that the law is absolutely on the side of tenants when it comes to eviction.

Firstly you need to have approved grounds for evicting the tenants, usually non-payment of rent or anti-social behaviour in your property. Then, if they won’t go voluntarily, you need to serve a Section 21 Notice.

And a Section 21 will only be regarded as valid by a court so long as the landlord has properly protected the security deposit and complied with various other procedures that now cover the commencement of any tenancy.

A Section 21 cannot be served during the first four months of tenancy. Once a Section 21 is served the tenants must be given two months notice to quit. If they fail to leave then you need to seek a Possession Order – this can easily add another month and then if the tenants ignore the Order you’ll have to spend more money and time getting bailiffs to physically evict the tenants. And in this case you should always upgrade the Order to the High Court so as to make use of proper bailiffs.

It could easily cost you around £6000.00

So, all in all it could take at least four months to evict bad tenants and often longer! In all that time you will be losing rent and ranking up legal costs. On an average property this could easily amount to well over £6000.00!  And then you will probably have extra refurbishment and cleaning costs to deal with the mess that’s left.

We are agents for Landlord Rent Guarantee & Legal Expenses Insurance, but even if we weren’t, I’d still say that at only £99.95 per property for 12 months’ cover it’s incredible value.

To maintain this low cost, tenant referencing is a condition of this insurance and it’s important to follow the correct procedures relating to taking and protecting the security deposit. If you need more information about this insurance and/or referencing just email us at info@landlordsandletting.co.uk

However, even if the tenants seem nice, strict referencing should ALWAYS be carried out whether you are taking out rent guarantee insurance or not.

What does it cover?

The premium covers your rent up to a maximum of £3000.00 pcm, with a maximum payout of £25000.00 per claim and covers up to five named tenants in the same property. After the first month your rent will be paid per month and our legal team will get to work to evict the tenants as soon as possible and, if appropriate and possible, recover costs to cover damage not covered by the security deposit. You also have the option to have your rent paid without the one month ‘grace’ period – this costs a little more at £129.95 for 12 months.

So, can you really afford NOT to have this insurance?

Landlords and Letting  – Affordable landlord insurances

New Government Plans for Future Buy-To-Let Landlord Laws?

NOTE: None of these new regulations are expected to apply to limited companies holding more than 100 properties.

After Dave and George had exhausted benefits claimants and the disabled as their chosen targets for blame, they found Buy To Let Landlords, who are now fast becoming the nation’s favourite bêtes noir, after bankers, estate agents and journalists of course. Now Theresa May’s government is following in the footsteps of its predecessor.

Following the current torrent of anti-landlord legislation from our so-called Conservative government, these are some futuremeasures I can imagine being considered by The Treasury and the Ministry for Communities and Local Government, plus a new government quango being set up – see below.

2019. Psychological Assessments for Landlords
This will make it mandatory for all existing and prospective landlords to undergo Psychological Assessments for Landlords (PAL) to verify their fitness to be a landlord. These will take up to two hours, to be carried out by qualified Government Approved Psychologists. Cost estimated at around £490.00 plus VAT. Note that private landlords will not be able to claim back the cost of these PALs and furthermore they will not be an allowable business expense.

The tests themselves

The tests will include the famous word association test where subjects are asked to interpret what they see in random ink blot shapes. For example, they will be shown a photo of a student and if they say something like, ‘Cash cow to be exploited and degraded at every opportunity’ or something to that effect they will be marked down.

Where landlords fail the tests, in some cases they will be offered ECT (Electro Convulsive Therapy). This would be supervised by qualified psychiatrists and could last a fortnight and cost up to £7400.00. At the end of this they could then re-take the PAL – if they were still conscious that is.

Those that refuse the PAL will be required to sell their properties within 12 months or face an additional surcharge of 15% CGT, or a maximum of 6 months Community Service, whichever causes them the greater suffering.

2019. Mandatory CRB Checks for Residential Landlords

All existing and prospective (if there are any by then) landlords will be forced to undergo a full Criminal Records Bureau check.

Projected for 2020. New maximum age limit of 55 for all new landlords

No one over the age of 55 will be allowed to become a landlord and all those currently over that threshold age will be required to dispose of their existing properties within 12 months. Those not doing so will be subject to a 15% CGT levy or a maximum 6 months imprisonment.

Landlords who fail the PAL (see above) will also be required to walk around a designated local area for up to 4 hours over a period of one week, carrying sandwich style boards with big red lettering saying ‘I AM A LANDLORD AND I AM AN UNFIT PERSON’.

Authorised people, ie local government officers, MPs, members of Generation Rent and registered tenants will be allowed to pelt them with rotten eggs and tomatoes – no solids will be allowed. In some cases it will also be permissible to beat landlords with rolled up copies of The Guardian or New Statesman – but not both at once.

Rent Controls

Before any flat or house is let, a local authority officer will be required to inspect it and set a maximum rent for the next 12 months.

A Rent Assessment Visit (RAV) will take place within 2 months of application by the landlord, at a cost of £275.00 per property.

This, combined with all the other anti-landlord laws is expected to lead to a decrease in available rented accommodation and thus a consequent rise in demand over supply. So, anticipating this, where a landlord is advertising a property for what will be far below the market rent and receiving applications of more than 500 prospective tenants, then the landlord will be required to raffle the property or alternatively arrange a 100 metre sprint to see which of the prospective tenants shall be permitted to rent it.

Penalties for Landlords

Penalties for transgression of any of the above will range from an extra 15% CGT on the disposal of a buy-to-let property, to fines of up to £20,000 or 4 years’ imprisonment. Boroughs will also be allowed to set up Landlord Pillory Facilities where repeat offenders will be chained for up to 24 hours while rotting vegetables, soft fruit and insults will be hurled at them.

Bureau for the Administration of Landlord Legislation and Supervision (BALLS)

From 2020, the Government is proposing to set up a new quango called the Bureau for the Administration of Landlord Legislation and Supervision (BALLS), with an expected staff of 4000 people. BALLS will oversee all this new legislation and will consider future controls should they be deemed necessary.

I know it all sounds far-fetched but back in 2000 so would all the anti-landlord legislation that exists today.

Landlords and Letting – Affordable Landlord Insurance

 

Leasehold Property – The Landed Gentry’s Triumph

To the best of my knowledge the only country in the world that is cursed with the concept of Leasehold Property is Britain.  And historically that is largely down to the vested interests of our landed gentry.

It is essentially a carefully crafted fraud wherein leaseholders don’t actually BUY their property, they BORROW it from the Freeholder. They own the bricks and mortar, the fitted kitchen and bathroom etc – but they DON’T own the land.  Hence the weird concept of ‘ground rent’.

Are you a Landlord or a Tenant?

Vast areas of Central London, for example, are actually owned by people like The Duke of Westminster and many of the buildings are really only ‘borrowed’ by the leaseholders who inhabit them.  The landed gentry love the idea of leasehold tenure because it means they never ever entirely let the true ownership of their land slip into others’ hands.  In fact if you are say a buy-to-let landlord you will actually often have seen the Freeholder referred to as your landlord!

Which brings me to the whole very modern concept of flat ‘ownership’.  Many major house builders and developers have seen the benefit of ‘selling’ flats on ludicrously short 99 year leases.  In fact, many people who bought 99 year leases only back in the 1990’s are already finding that their leases are approaching the all-important threshold of 80 years remaining.  In fact, when the 70 year threshold is passed it becomes almost impossible to obtain a mortgage and thus the property’s value is badly affected.

We must thank Margaret Thatcher

Thanks to Margaret Thatcher, who was never a great friend of the parasitical landed gentry, the Leasehold Reform Act finally came into law in 1993, three years after she was forced out of office.  This act at least went some way to restoring some power to leaseholders.  It meant that from then on leaseholders could force their freeholder to sell them added years.  Above 80 years there is a fairly precise formula related to the value of the property with the extended lease, the ground rent and the number of years still remaining on the existing lease.  This formula is used to calculate how much premium a leaseholder must pay to extend.  And because it’s a formula, it means there are limits on how much the freeholder can actually demand.  But if your lease is under 80 years then it is more of an ‘open-market’ negotiation and likely to be much more expensive.  The act importantly also gave groups of leaseholders in blocks of flats the right to force their freeholder to sell them the freehold.  Ultimately disputes can be settled via the Leasehold Valuation Tribunal.

Is your lease approaching the 80 year threshold?

Many leaseholders are probably blissfully unaware that their lease may be approaching the 80 year point – and freeholders love it because at some point the leaseholder will want to extend their lease… Another problem with some leasehold property is that there are penal clauses in the leases and individuals and property companies study freeholds that are up for sale to find just such leases.

What I would like to see is it being made illegal from some future point to sell any property with less than a 999 year lease. But you can be sure that the landed gentry and other major land owners would fight such a proposal tooth and nail.

If you do need assistance and advice with legal aspects of your lease there is a pretty good government funded organisation called The Leasehold Advisory Service.

 Landlords and Letting

Yet another landlord Law on the horizon

It seems that Buy-to-Let Landlords are slowly joining bankers, estate agents and MPs as the latest pantomime villains. “Oh no they’re not!” you may say, but I would say “Oh yes they are!”

For the past few years there have been rumblings from the Labour Party about Rent Control and a number of lefty councils have for several years been operating a compulsory registration schemes for landlords. These are ostensibly designed to control ‘rogue landlords’ who let out sheds in their back gardens in places like Tower Hamlets, Newham etc, but in reality it’s yet another money-making scam to milk landlords, because of course there’s a handy Registration Fee.

Attacking the Evil Landlord over ‘Revenge Evictions’

There have been documented cases of rogue landlords evicting tenants after the tenants have complained about their accommodation, such as a boiler not working properly etc. LibDem MP Sarah Teather is introducing a Private Member’s Bill designed to put an end to this outrageous practice – and it is outrageous. The bill will have received its second reading by the end of November 2014 and the aim is that it should become law next year.

“Buy to Let Landlords are a disaster for Britain and the economy”

“Outlaw Revenge Evictions’ so says Shelter, the housing charity “…”It’s time to stop the light-touch approach to the private rented sector” – Tom Copley, New Statesman, “Buy to Let Landlords are a disaster for Britain and the economy” – Phillip Inman, The Guardian (who else!). And so the fashionable anti-landlord rhetoric mounts…

It seems that Ms Teather’s Bill will receive Government support, so there is a fair chance that it will make it on to the Statute Book by next year – no doubt it would have to be before the election, because after that the LibDems will no doubt all but disappear!

Sarah Teather’s Bill

Landlords can already suffer if it is found that they have not dealt with the security deposit in the prescribed manner and it usually mean that should they seek a Repossession Order that a judge will not grant it if he or she discovers that the deposit has not been ‘protected’. The idea of this bill is that landlords will suffer the same fate if it is found that they have evicted a tenant ‘without good reason’. Obviously it will be for a judge to decide whether or not a landlord had ‘good reason’ to evict a tenant.

The Road To Hell

Like all recent dewey-eyed government legislation it is very well-intentioned but let’s hope that it is not something that can be abused by bad tenants. Of course we must remember the old saying that ‘The Road to Hell is paved with good intentions’. The problem with the current bunch of boys and girls (most of whom have never done a proper job) is that they are obsessed with ‘rogue landlords’. They forget that there are many ‘rogue tenants’ too.

But, as I said, there is a fashionable tide running against buy to let landlords, who are increasingly being portrayed by those of a liberal tendency to be the root of all evil. I think all landlords should be aware of this tide because there will be more and more anti-landlord legislation on the way – particularly if that bunch of Labour losers get in again in May 2015!

UPDATE DECEMBER 2014

Looks like this legislation has been delayed by the actions of Conservative MPs at Westminster. But we’ll keep you posted.

 

Landlords and Letting

 

 

 

Estate Agents’ Boards – A Personal Rant

Hands up who likes estate agents’ boards? They are everywhere and the agents say that it helps them sell your property quicker because people see them and call up. There are For Sale boards, To Let boards, Sold By boards and Let By boards. And they all have one thing in common – the agents love ’em.

To let sign UK

Using your property for free advertising

Agents love them because, simply put, it’s free advertising for their business! It is usual practice to ask the vendor if they would like a board but sometimes they don’t even ask and suddenly one appears outside your house. This happened to me recently when an agent was marketing a property I owned in Rotherhithe. Admittedly, as soon as I complained – and boy did I complain – they took it down.

I guess it CAN be argued that a For Sale board helps the vendor, although in these days of the internet it’s a dubious claim. But a Sold By board helps no one apart from the agent, with the idea that other potential sellers will see it and put their property with that agent.

In fact, I said it is free advertising. In fact, thinking about it, it’s worse than that – YOU are paying for them to advertise their business!

Agent boards and blocks of flats

This is where I really take exception to their damn boards. You must have seen small blocks of flats, maybe a short road and at the head of it on the communal ground there they are – loads of ugly agents’ boards all vying for attention. And by ‘ugly agents’ boards’ I don’t mean that the agents themselves are necessarily visually challenged. Unless you have a vigilant management company, there they stay – a complete eyesore! It’s the typical problem where no one person actually takes responsibility for forcing the agents to remove them. They are there TOTALLY as free advertising as no one knows to which flat each board refers.

Let’s make them illegal!

Agents’ boards exist for the same reason that many other nuisance things exist – just because they always have. I feel that these boards should be outlawed everywhere and local authorities should be empowered to force agents to remove them under pain of stiff fines. No exceptions.

Agents’ boards may have served a slight purpose once upon a time, although the ‘Sold By’ and ‘Let By’ ones never did. But in a world of Rightmove, Primelocation, Zoopla and others, agents’ boards are an anachronism and a real blight on the environment.

I’d be interested to see what others think – maybe I’ve got this wrong?  There’s a simple poll at the bottom of this item.

Should we ban estate agent boards?
Yes
No

Poll Maker

 Landlords and Letting – Landlord Insurances

Improving the English Conveyancing Process

They say that moving home is one of life’s most stressful activities, along with bereavement and divorce etc and particularly so if you are actually buying and selling.  If so, why doesn’t the Government try to improve it and make it less stressful? I believe that it can be improved – after a brief outline of the way it is now I suggest how this might be achieved.

The fact is that the English Conveyancing System is as they say ‘Not Fit For Purpose’ and it’s a testament to the dismal quality of both civil servants and particularly legislators.

1930s_houses

Buying and Selling basics

You find your ideal home, make an offer and if it’s accepted, both parties pass relevant details to their solicitors and then the whole rigmarole starts. The buyer’s solicitor requests endless documents, mortgage companies are alerted, removals companies contacted, a survey is commissioned and so on. At some point contracts are exchanged with an agreed completion date. The whole tortuous process can take up to three months…if you’re lucky!

Of course, the point at which both parties can reasonably relax is Exchange of Contracts, when the buyer contracts to buy and the seller contracts to sell, both being liable to lose a large amount of money if they renege on the deal.

Subject to Contract

But as we all know, at any point right up to exchange of contracts either party can withdraw, or simply demand a higher sale price (gazumping) or demand a lower sale price (gazundering). And unless agreement can be reached, the whole process collapses, the buying chain is broken..along with the hopes and dreams of all the rest of the people in that relevant chain. Also huge amounts of money, on solicitors, surveys, reports etc are wasted by the would-be purchaser. Then the whole tedious process starts again.

This absolutely ludicrous, because the whole English Conveyancing System is  not so much based on ‘subject to contract’ but subject to a nod and a wink!

Putting your money where your mouth is

What I suggest, is that once an offer to buy is formally accepted and a survey completed, an Initial Deposit be placed in escrow by both parties. This deposit will then be forfeited to the aggrieved party in the event that the other party seeks to change the agreed sale price or withdraws from the process before actual Exchange of Contracts.

Of course the devil is in the detail, as they say. There will have to be very carefully specified reasons for a buyer to withdraw, such as a search revealing that a motorway or similar is planned to go through the sitting room or at least within hearing distance of the property in question and that was not revealed in the initial Property Details. Precise grounds for parties to withdraw from the commitment to buy and sell will need to be established but the current system is ridiculous and badly needs reform.

But how much should the Initial Deposit be? I would suggest 0.5% of the agreed sale price but obviously others would have a view on that. But it has to be sufficient to ensure that both parties are serious about the transaction and really ARE willing and able to proceed. It will also at least go towards compensating the aggrieved party for wasted survey and legal costs.

Who benefits?

Serious purchasers will benefit, serious vendors will benefit…even estate agents will benefit! The only people who won’t benefit are mortgage companies, surveyors and of course…solicitors – but that’s not a bad thing is it!

Tell us what YOU think – take our poll

Should we reform the UK property buying process?
Yes
No
Don’t know
Other
Please Specify:

Poll Maker

Landlords and Letting – Landlord Insurances