Advertising watchdogs are warning landlords and tenants about online letting agencies charging callers premium rates without revealing the charges.

The warning comes after a complaint to the Advertising Standards Authority (ASA) about online letting agents DSSCribs, based in North London.

A woman complained the web site was misleading for two reasons –

• The only contact was via a premium 070 number and the web site failed to tell prospective callers that they would pay more if they called
• She felt the advertised properties were not really to let

She had called the 070 number to try to make appointments to view the properties.

She was interested in two two-bed houses in Stratford and Dollis Hill, London, with landlords ready to accept tenants receiving housing benefits.

The person taking the call would not disclose the name of the lettings agency to her and she was told that someone would call her back, but they did not, said the ASA.

“She was also kept on the phone for over 30 minutes, was on hold for some of that time and was charged for the call at a premium rate,” said the ASA report. “Because we had not seen any evidence to demonstrate that the properties listed were genuine, we concluded that the listings on the website had not been substantiated and were misleading.”

The ASA confirmed DSSCribs failed to respond to any inquiries.

As a result, the ASA ruled that the listings must not appear on DSSCribs website and the firm’s future advertising should include information about premium rate call charges.

DSSCribs started in 2008, according to the website, and has now changed the telephone number to a standard landline.

Read the ASA report

Two Wrexham landlords running shared houses have faced magistrates for flouting property licensing laws.

Thomas Ayonuwe was found guilty of failing to obtain a house in multiple occupation (HMO) licence at Wrexham Magistrates Court.

He had denied the charge and also denied failing to comply with an improvement notice.

He was ordered to pay £2,000 in fines, £1,000 costs and a £120 victim surcharge.

Monica Hoffman pleaded guilty to running an HMO without a licence. She was fined £3,000 and ordered to pay £181 costs and a £15 victim surcharge.

Councillor Mark Pritchard said the cases present a clear message to HMO landlords that they must have a licence or risk prosecution.

Letting agent stole £13,450 rents

Letting agency worker Michelle Armstrong stole £13,450 in cash from nearly 100 buy to let tenants as rent payments

Armstong, worked for agents Dennis Dowen, in Seaham, County Durham.

She was due to face trial but changed her plea to guilty on the first day at Durham Crown Court.

She had claimed money had been stolen from her desk and car, but the full extent of the shortfall was revealed when the firm’s bank accounts were checked.

The firm has agreed to reimburse landlords.

HMO safety breaches

In another case, Bartholomew Akuwudike admitted breaching HMO health and safety regulations.

Stratford Magistrates Court heard him admit that his rental property had no working smoke detectors, nor a staircase handrail.

Akuwudike was ordered to pay a total of £6,315 in fines and costs.

West Hull landlord Matthew Money has been fined over fire hazards at an HMO. He was ordered to pay £2,000 fines and costs after he was found guilty in his absence of three fire, health and safety offences.

Thousands of landlords across Scotland could face fines as the deposit scheme deadline comes and figures show worryingly low sign up

Under the tenancy deposit protection scheme, all deposits must be registered with a scheme in Scotland by today (May 15, 2013)

On the final deadline day for sign up to a scheme, Malcolm Lindo, Managing Director of SafeDeposits Scotland warned landlords their time was now up and urged them to get in touch for help if they hadn’t signed up.

Mr Lindo said: “The clock has stopped for landlords and agents in Scotland. The deadline is now and if you let a property that is eligible for the scheme, are not signed up by the end of today, you could face legal action in the future. (1)

“Based on the latest Scottish Government figures, we estimate there are up to 56% of tenancies eligible for taking a deposit where a deposit has not yet been paid into a scheme. That’s worryingly low at this late stage and means thousands of landlords could face legal action from their tenant in the future.” (2)

He added: “It is a legal requirement but also this scheme benefits both landlords and tenants. Feedback from landlords has been positive so far. Signing up helps to resolve any disputes that could arise at the end of the tenancy, fairly, quickly and impartially. It’s a win-win situation.”

SafeDeposits Scotland, the leading provider of the tenancy deposit scheme in Scotland, the only scheme based in Scotland and the only not-for-profit. (3)

The Legislation Highlights:

1. Under the tenancy deposit protection scheme, all deposits must be registered with a scheme in Scotland by the 15 May 2013. ‘Eligible deposits’ covers those tenancies to which the landlord registration provisions in the Antisocial Behaviour etc. (Scotland) Act 2004 apply. Therefore, if a landlord is required to register with a local authority, and takes a deposit from their tenant, that landlord must also comply with the Tenancy Deposit Regulations.

2. Figures from Scottish Government are to the end of March. The figure of 56% has been calculated by taking the Scottish Government figures of the number of deposits submitted to a scheme at the end of March as 129,164, and comparing it to the potential number properties which will have a deposit using the total number of approved properties for landlord registration in the same time frame (291,190).

3. Unlike other tenancy deposit schemes in Scotland, SafeDeposits Scotland is a not-for-profit organisation. Any surpluses generated will be gifted to a charitable trust, SafeDeposits Scotland Trust – a grant giving charity designed to promote education, training and best practice in Scotland’s private rented sector. SafeDeposits Scotland’s members are the National Federation of Property Professionals (NFOPP); National Union of Students Scotland (NUS Scotland); Royal Institution of Chartered Surveyors (RICS); Scottish Association of Landlords (SAL); Scottish Council for Voluntary Organisations; The Dispute Service (TDS).

Letting agents unite for second annual SAFEagent Awareness Week

Letting agents are uniting for the second national SAFEagent Awareness Week to remind consumers of the importance of choosing a letting agent which offers Client Money Protection.

Tenant protection has returned to the media spotlight in light of the recent 11th hour amendment to the Enterprise and Regulatory Reform Bill, making it mandatory for letting agents to belong to an ombudsman scheme, thereby giving landlords and tenants access to approved redress schemes.

However, the message from SAFEagent is that consumers’ finances are still at risk if the agent does not subscribe to a Client Money Protection Scheme.

John Midgley, chair of the SAFEagent steering group said: “While we applaud the Government’s recent move to tighten the regulation of letting agents, giving tenants and landlords the right to seek redress only goes so far. Let’s not forget that the recent changes to the Enterprise and Regulatory Reform Bill do not cover Client Money Protection, which means that if an agent were to abscond with a landlord or tenant’s money, they wouldn’t stand much chance of getting it back.

“To this end, the aim of SAFEagent remains true – to raise awareness among consumers of the importance of choosing an agent who is part of a Client Money Protection scheme. By working together as an industry we can achieve this and we urge all letting agents committed to professional standards and consumer protection to sign up to the SAFEagent campaign.”

More than 2,000 letting agents have now signed up to the SAFEagent campaign to signpost their commitment to protecting landlords’ and tenants’ finances. The Government has shown its support since its launch in September 2011.

Housing Minister Mark Prisk said: “Most tenants are happy with their letting agent, but a minority of rogue agents provide an unacceptably poor service, giving the whole industry a bad name. That’s why we will shortly introduce proposals that will require agents across the country to join approved redress schemes, giving landlords and tenants a clear route to resolve complaints.

“The industry-led SAFEagent campaign is also helping to raise awareness, giving landlords and tenants the confidence that their agent will protect them. I hope this SAFEagent Awareness Week will help many more landlords and tenants make a safe, informed choice.”

Key organizations in the industry including Citizens Advice Bureaux, Shelter, Ombudsman Services: Property, The Property Ombudsman, DPS, TDS, My Deposits and Trading Standards Institute have all allied themselves to the campaign. Key suppliers to the sector are also standing behind the campaign – for example, HomeLet, Imfuna and CFP Software have led the way in pledging their backing to it.

About SAFEagent:

SAFEagent – Safe Agent Fully Endorsed – is a reliable mark denoting firms that protect landlords and tenants money through Client Money Protection schemes. Set up ‘by the industry, for the industry’ and recognised by the Government, it is supported by Citizens Advice Bureaux, Shelter, Crisis, The Property Ombudsman, National Union of Students, My Deposits, OFT, the Trading Standards Institute.

All agents registered with SAFEagent are part of a Client Money Protection Scheme which reimburses consumers in the event of misappropriation of clients’ funds. There are several schemes in the sector operated by NALS, ARLA, NAEA and RICS to which agents voluntarily belong. The scope of these schemes varies and consumers should contact their agent for full details of the scheme of which they are a part.

More first-time landlords are joining the buy-to-let market, according to a new survey.

New landlords are purchasing rental properties with the number hitting the highest level since the third quarter of 2012, according to the research by Paragon.

A fifth of mortgage broker business has come from first-time landlords since the end of 2010. The proportion hit a 24% peak between July and September last year.

For the first quarter of 2013, the proportion remained strong at 22%.

The survey of quarterly trends shows that intermediary buy-to-let business from first-time landlords has been increasing since the middle of 2009.

A peak was reached in the second quarter of 2002 when the buy-to-let market experienced a boom, but demand began to fall in following years and reached a low in 2008 because of the financial crisis and credit crunch.

The picture is now looking much more positive, with investors encouraged back into the buy-to-let arena.

Director of mortgages at Paragon John Heron says the dynamics of the market are changing.

Previously, professional landlords were the backbone and drove growth in the sector, but more recently such investors were more constrained and less able to secure finance.
Private investors with up to five properties can pick up the slack as they have access to finance and can agree deals more quickly. They are well-placed to cope with economic fluctuations and usually have other investments, Mr Heron explains.

Paragon also revealed increasing confidence in buy-to-let landlords. The survey of mortgage brokers found that 34% say demand is strong, up from 30% in the previous three months.

An increase in confidence in the mortgage market was reported, with more than half (57%) of the belief that buy-to-let finance had become more available in the current quarter. This is a substantial increase over the 47% from the preceding quarter. Furthermore, 51% are optimistic that the situation will improve.

Finally, nearly two-thirds (63%) of intermediaries expect to see increasing buy-to-let business in the next year, with 18% saying they expect to do at least 10% more business.

By asking, ‘Has the property ever been affected by Japanese knotweed?’ the majority of cases will be disclosed during the sale process.

The specific mention of Japanese knotweed in two new important pieces of legislation has put many home owners, home buyers, estate agents and other property professionals on alert.

This month’s Law Society launch of the 3rd edition of the Property Information Form (TA6) and the updated Consumer Protection Regulations (CPRs) both cite the presence of Japanese Knotweed, or the risk that it may be present, as an example of the type of material information that you would be expected to disclose to prospective buyers once you knew of it.

“Property sales are hampered and construction delayed by the discovery of this highly invasive plant so it makes commercial sense to ensure that people involved in the property market are able to correctly identify it and know what steps to take if they do discover it” explains Mark Hayward of the NAEA (National Association of Estate Agents), speaking at the annual conference of the Guild of Professional Estate Agents earlier this month.

With ignorance no longer a suitable defence, vendors, estate agents, surveyors and conveyancers across the UK are keen to increase their knowledge of this destructive, non-native species in order not to fall foul of the regulations. Nic Seal, MD of Environet UK, says: “I’m delighted that the Law Society, in the context of property sales, has recognised the importance of correctly identifying and dealing with Japanese knotweed.

I’d have liked to have seen the question worded slightly differently to reflect not only the present but also the past, as knotweed has a tendency to lie dormant underground for several years and regrow when you least expect it. By asking, ‘Has the property ever been affected by Japanese knotweed?’ the majority of cases will be disclosed during the sale process. Requiring that any treatment and management plans, together with relevant guarantees be submitted in evidence would help any specialist assess the efficacy of any earlier treatments.”

Environet® is a recognised leading specialist in the total eradication of Japanese knotweed within the UK, covering England, Scotland and Wales. The company is based in Cobham, Surrey, with local regional managers serving the entire UK. As well as using the latest herbicide treatments, they have developed an on-site remediation method called Xtract™.

The method is particularly suited to sites where rapid and complete eradication is necessary. Using purpose designed and built equipment all viable rhizome is extracted from the infested soils so that the soils can be re-used on site.

It reduces haulage and waste to landfill by 98% and does not require the use of any herbicides. With many projects successfully completed using Xtract™, and a track record of zero re-growth, the guarantees offered by Environet should provide customers with peace of mind over alternative methods.

If you are one of the growing army of homeowners about thinking about becoming a reluctant or accidental landlord, you need to consider a few points before making the final decision about letting out your former home.

Buy to let can be profitable and rewarding – but some homes are money pits that can pull their owners in to financial mire.

Renting out property is considered an investment, but has the same rules and commitment as running a small business.

Here are some key points to consider before making the jump:

• Is there a local demand for rented property in your neighbourhood?
• How much rent are you likely to charge – and don’t forget the property is likely to stand empty for a couple of months between tenants each year?
• Will the rent cover the expenses – besides the mortgage, you need landlord insurance, letting agent costs and a fund for repairs and maintenance?
• If you are moving away who will manage the property – a letting agent, friend or relative?
• What happens if the house stands empty for several months – can you cover the mortgage and costs without impacting on your personal finances?
• Do you need a house in multiple occupation licence if you are letting rooms rather than the home on a single let?
• Have your lender and insurer consented to you letting the property and do you need planning permission?
• What is your target market – students, families, singles or tenants on benefits?
• Have you got gas and electricity safety certificates and an energy performance certificate (EPC?)
• Have you complied with local rules? Some English councils, like Newham, require all landlords to register. Scotland also has a national landlord register
• Have you registered your new income with HM Revenue and Customs and made arrangements to keep financial records and submit a tax return?

Don’t forget to factor in capital gains tax (CGT). If you sell an inherited property or a buy to let that was your main home more than three years ago, you may be liable for CGT if you sell or gift the property to someone else.

Considering renting a property to tenants with pets? A specialist insurance policy to be launched in May 2013 by Dogs Trust, the UK’s largest dog welfare charity, and Endsleigh Insurance, will give landlords peace of mind and offer hope to thousands of pet owners who struggle to find private rented accommodation, by including pet damage cover in the policy as standard.

The “Specialist Landlords Insurance – In Partnership with Lets with Pets” has been established due to overwhelming demand from landlords who are eager to branch out and rent to pet owners, but want the reassurance of specialist buildings and contents insurance.

Tellingly, a recent survey[1] found that 88% of landlords said they would rent to pet owners if there was an insurance product available covering pet damage.

The Lets with Pets scheme, run by Dogs Trust, aims to make private renting with pets easier for landlords, letting agencies and pet owners by providing practical advice and a range of free resources.

Clare Kivlehan, Dogs Trust Lets with Pets Manager, says:

“Over three quarters of pet owners experience difficulties finding privately rented accommodation that allow pets[2]. Yet, there are many benefits of renting to pet owners and many landlords have been missing out on this lucrative sector of the market. So, we are delighted to be teaming up with Endsleigh to offer landlords this specialist cover.”

Sean Sage, Endsleigh’s Let Property Sector Manager, commented:

“With over 30 year’s experience developing property insurance solutions for the landlords sector, Endsleigh is committed to providing specialist insurance protection to meet all the requirements of buy to let landlords. Often the perceived problem of pet damage is the major obstacle for landlords when it comes to renting to pet owners. So, we are delighted to be working with Dogs Trust and Lets with Pets to provide comprehensive insurance cover for landlords to put their mind at rest.”

The insurance policy will be available to individual landlords and cover will include accidental pet damage as standard, 120 days unoccupancy, theft by tenants, £2m property owners’ liability, malicious damage by tenants and landlords contents.

For more information on the Lets with Pets and Endsleigh Pet Insurance Policy, go to: www.endsleigh.co.uk/letswithpets or contact letswithpets@endsleigh.co.uk

For more information and advice about the Lets with Pets scheme, please visit www.letswithpets.org.uk

About the Scheme:

The Lets with Pets scheme makes the process of privately renting with pets easier for tenants, landlords and letting agencies by providing practical tools and advice for each step of the letting process. The scheme encourages all letting agencies who are members of a professional body to sign up as a Lets with Pets supporter.

A range of free resources are available to Lets with Pets supporters to help them successfully let properties to pet owners:

Advertising on the Lets with Pets website www.letswithpets.org.uk

A simple to use toolkit including:
- Information leaflets explaining the scheme to landlords
- Information and advice leaflets for pet owners
- Advice about tenancy amendments and introducing a pet policy
- Easy to use documents including a pet checklist and pet information form
- Use of our Lets with Pets promotional products and logos

Dogs Trust is the UK’s largest dog welfare charity with 18 Rehoming Centres across the UK and one in Dublin. Dogs Trust cares for over 16,000 stray and abandoned dogs every year. For more information visit: www.dogstrust.org.uk

Investors Chronicle – issue on sale Friday 10 May – landlords might be interested in this week’s issue of Investors Chronicle.

They have put together an authoritative special report that helps small landlords or would-be landlords to make big decisions about whether and how to expand or contract their portfolios.

The private rented sector in Britain is expanding apace, particularly in London, where it now houses a quarter of all households.

This presents the private landlords that have traditionally been the backbone of the sector with a clear opportunity, but it also raises various questions.

Do returns from buy-to-let really stack up compared with other investments?

How should landlords play the nation’s dual-speed housing market, with London in rude health and the rest of the country in a state of suspended animation?

How badly will housing-benefit cuts affect the private rented sector in poorer areas?

http://www.investorschronicle.co.uk/

Prices in Prime London Central (PLC) have risen 25% since March 2012, equivalent to £27 for every hour of every day. They now stand at an average of £1,186,817

Transactions in PLC saw an 84% increase between £1m and £2m

Prices in England and Wales rose by an encouraging 5%, bringing the average to £234,962

The most expensive sale in March 2013 was a flat in London’s One Hyde Park for £29m

The least expensive sale was a terraced house in Blaenau Gwent for £8,000

One year on from the infamous 2012 Budget and the early spring market is showing a healthy picture for PLC, according to HM Land Registry All Transaction Data (ATD). Prices here rose 25% across the year to reach an average of £1,186,817. Staggeringly, this price increase is equivalent to earning £122 an hour for a working week, 14 times the London Living Wage (£8.55).

A Hangover from 2011:

Two years down the line from the 2011 Budget, headline results show a complete recovery from the rise in Stamp Duty from 4% to 5% for purchases above £1m. The bunching in sales under £1m, which occurred following the 2011 SDLT increases, has now burst through and the £1m – £2m price band has seen a staggering increase in transactions of 84% since last March. Furthermore, the number of transactions in the most susceptible sector (£1m – £1.5m) is finally back to where it stood in March 2011: 87 this month versus 88 in 2011.

2012 and another blow for the high-end:

The Chancellor increased SDLT for purchases above £2m to 7% for individuals buying in their own name and 15% if buying through a corporate vehicle. An Annual Tax on Enveloped Dwellings (ATED) and a CGT were also introduced for company purchases. As a direct result of these changes, 2012 was a rocky year for properties between £2m – £5m. However, transactions have now made a comeback, witnessing an 8% increase in sales volumes since last year’s Budget. Whilst two years represents the usual time scale for sales activity to recover from tax hikes, London’s ‘safe haven’ status, coupled with weakening sterling, has prompted investors to return more quickly to the market.

“As investors have come to terms with the increased cost of moving, we are witnessing increased sales volumes at the top-end of the market. Whilst these figures are a result of PLC’s continued global appeal, they also represent a bounce back from the reduction caused by property tax rises. Transactions in PLC should continue to pick up across the year once the last of the negative sentiment washes through and when tax carve-outs, announced in the Autumn Statement, come into force at Royal Assent of the Bill in July” comments Naomi Heaton, CEO of London Central Portfolio.

However, an element of both the price and transactional growth is undoubtedly due to a change in dynamics in the super prime market. Some buyers of the most expensive properties are now choosing to avoid Osborne’s new property taxes by purchasing units in their own names – rather than in and existing corporate structure. These transactions are now being lodged in HM Land Registry’s ATD where they did not appear before. Without this behavioural change, it is unlikely that we would have seen this month’s most expensive transaction entered at the registry: One Hyde Park; Flat A 06.1, for £29,350,000.

The country as a whole has also seen increasing prices, influenced by a more positive sentiment in the housing market. According to Zoopla Property Group, confidence in the property market is at its highest level in three years. Prices rose 5% across the year to reach £234,962 or, taking out the halo effect of PLC price appreciation, the average now stands at £224,737.

Whilst London’s most famous new development of the Noughties saw the most expensive transaction, the cheapest purchase this month was £8,000 for a terraced house on Blaenau Gwent’s Beaufort Rise. A difference of £29,342,000 between the top and bottom end of the market.

Notes to Editors: This analysis is based on Land Registry All Transaction Data (ATD) analysed in-house by London Central Portfolio. This data is published monthly and records all transactions registered for that month. This differs from the Land Registry House Price Index (also published monthly) which is based on repeat sales regression.

About London Central Portfolio Limited (LCP):

LCP specialises in the Westminster and Kensington and Chelsea boroughs that make up its core prime London Central focus. LCP has access to the entire residential market and sources and buys the best properties which it will, in turn, refurbish, let to major blue chip corporate tenants and manage for its clients. It uses proprietary financial modelling to determine yields and returns and to evaluate each investment. LCP has £500m of assets under management and is a leader in its field. Since 2000, the increase in value of its managed portfolio has outperformed the market growth by over 50%. It has successfully brought three funds to market, capitalising on this sector.

Data Sources:
LCP in-house research
HM Land Registry Bespoke Price Paid Data
Zoopla Property Group Research

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