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by Nick Smith Wednesday, July 5th, 2017

A Review of the governments Housing White Paper 2017.

Or should we call it 'The Housing Grey Paper'... What I mean is that thegovernment seem to think that the issues are 'Black and White', where inreality there is a huge grey area otherwise know to those of us actually working in the housing industry, as 'Reality'. Don't get me wrong, I'm not wholly negative of the paper, in fact far from it. There are many areas of this off white paper with large elements of common sense, even a smattering I'm sure of good intent I think. I'm going to call this part one of the Grey Paper Blog. My initial (short) synopsis of a very few parts of the 106 page document. I'm initially going to concentrate on a part that relates directly to one of my own companies and the market sectors it covers... Leases: Actually a sensible idea, lets simplify and give more regulation to the runaway of leases. I have over the years come across endless cases where a property becomes unsaleable via mortgage due to the reduced / short length of the lease. This is quite often pertinent where an older person has bought a property (quite often they own it outright) then, has passed away or wishes to down size / enter care. When they, or their family look to sell, it is found that the length of the lease means that the property is near unsaleable. I applaud the government for wanting to implement a review of this process and hope a solution can be found to simplify the process of extending these leases or converting them to freeholds or flying freeholds.
  • Note: If you find yourself in this situation then fear not. Get in touch as we may be able to help.
Secondly Agencies and their Fees: I would also agree that this is an element of the agency business which requires a review and some regulation. Here in Wales, the Welsh government have had the sense to start this process with the implementation of'Rent Smart Wales'. It is not without issues but its at the very early stages and we hope it will settle down and become a force for good in our industry. Through this council monitored scheme Agents (including mine) have had to be scrutinised and checked, all staff have been checked and accounts verified. Through the scheme agents and their staff are verified as fit to act appropriately, pay fees, get trained and sign up to a charter to act in an appropriate and professional manner. Agents and landlords acting outside of these new laws get fined and have heavy penalties attached to each misdemeanor. If this were adopted across the UK then I feel if would be a sensible start to force the less scrupulous agents and rogue landlords out of the market making things better for everyone. On the great debate of a “better” deal for tenants, do the government really thing stopping agents from charging fees to tenants and making tenancies longer are “fairer” and will improve the situation? 1. Who will pick up this fee shortfall? There is a significant cost of running a Lettings agency, there are also significant costs to landlords for running their stock as rental properties, so who will pay to help this remain viable? The landlord?…Hell no, they will absolutely 100% pass on this additional cost (many of them have to from a financial stand point) and the tenant will still pay in some form however you dress it up. We have an agency, and very few tenants (almost no-one) ever complain about fees to us. Our fees are both very reasonable and prove to be good value for money given the work we do for the individuals we help. How many times do you ask for a service and then not expect to pay for that service? Never, not in any sector so why has the housing minister singled letting agents out for this “community service” approach. Have the government not heard the old saying you don’t get anything for nothing? We actually care and try to help people, and almost everyone we deal with responds to this service positively (we are ranked No.1 on the independent review website www.rateragent.co.uk in Cardiff). The one caviat though is our fees (as they should be) are reasonable and proportionate to the work we have to do as a reputable agency, so here’s a thought, why not look at fairer (capped) fee structures for tenants. 2.  Longer tenancy agreements for tenants, have these ministers not rented out property before? People wrecking homes, not paying rent and causing nuisance etc etc etc. As an agent its already not the most straightforward of tasks to evict problem tenants and now the big idea is to make agreements longer (3 years), but I would also guess with many get out clauses for tenants. They seem to have forgotten a key factor here, it’s the landlords property! They have bought it, they maintain it, they take the risk and yet the government seem hell bent on controlling it. They are already taxing landlords heavily and in many cases forcing them out of the market. These same people that have supported the housing market for years by working hard and investing in property, but now it seems like this is unfashionable politics and preying on the publics dislike of Estate Agents and the media hyped “rogue” landlords is easy for vote winning. When are we going to get back to sensible pragmatic ideas to really effect the housing market, build more houses, more importantly make more use of the scores of empty and dilapidated building that every town, city and village has, converting them into affordable housing. Oops I just bought into a bit of the governments new spin propaganda “affordable housing”. I forgot housing has become unaffordable, really? Surely creating better jobs to help people earn more money, reversing the modern culture that the world owes people a living and getting people back into the habits of our parents and putting a little aside to buy things will all contribute to making housing affordable. Build more housing seems to be the buzz phrase but what about road network infrastructure to cope with these new developments. Question, how many of you HAVE to leave for work an hour or more earlier in today’s world? Just to get into work at the same time, or is this just me? It’s a big problem, but we all need to wake up and engage the property community to solve these very difficult challenges rather than just attack easy prey with very little thought behind the madness. Look out for part 2 of this Grey Paper Blog in the coming weeks...