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Latest news round up for letting agents

Latest news round-up for letting agents

Posted on 2016-11-17

The lettings industry has been as busy as ever during the last few months as agents continued to look after the nation's tenants and landlords. In case you missed any of the biggest news stories recently – we've put together a handy round-up, documenting what's been going on in the Private Rented Sector (PRS)…

Government and PRS policy news

The aftermath of the Brexit vote in June, and the assembling of a new Government after David Cameron's resignation, saw a new Chancellor appointed in July. Philip Hammond took over from George Osborne and immediately industry campaigners saw it as an opportunity to encourage the new Chancellor to overturn controversial tax measures introduced by his predecessor.

The Residential Landlords Association (RLA) was the first to step forward, asking Hammond to 'start again' when it comes to the Wear and Tear Allowance, additional stamp duty on the purchase of buy-to-let properties and the restriction of tax relief on the interest of buy-to-let mortgages.

Other pleas to Hammond – who himself has been a landlord – came from the British Property Federation and the Scottish Association of Landlords.

With the Autumn Statement set to take place on November 23, it's likely that more organisations will step forward in the coming weeks to lobby the Chancellor.

Alongside campaigning directly to Philip Hammond, a group of landlords have been coordinating a bid for a judicial review of Clause 24 of the Finance Act 2015 – specifically the limiting of mortgage interest tax relief starting from 2017.

Over the summer, we found out that the campaign – which has been spearheaded by Chris Cooper and Steve Bolton – would have its hearing in early October and that its organisers would meet new Housing Minister Gavin Barwell to discuss their grievances.

On October 6 it was confirmed that the attempt to seek a Judicial Review had been turned down, with those behind the 'Axe the Tenant Tax' campaign vowing to carry on fighting.

Regulation and legislation

In late September The Property Ombudsman Scheme (TPO) announced that it’d expelled four agencies from its organisation for failing to adhere to various parts of its Code of Practice for Residential Letting Agents.

The agents were expelled by the Ombudsman after several complaints were made by consumers. The expulsions largely revolved around agents withholding rents or deposits paid by tenants and not passing them on to their landlord clients.

Now these firms are unable to apply for lettings redress for two or more years, meaning they can't legally trade as agents and won’t be able to join a different redress scheme.

The expulsions came just a few days before TPO released its annual report – which detailed that this year there’s been a 32% increase in formal complaints made against agents.

In total, agents have been instructed to pay compensation of over £800,000 – the single largest award being £17,000 for a lettings dispute.

The three most common complaints made against letting agents were to do with management, communication and end of tenancy issues.

Just a few weeks before TPO's report, Citizens Advice said it’d recorded a sharp increase in complaints made against letting agents among the 17-24 age group.

Between July 2015 and June 2016, Citizens Advice was alerted to 6,500 letting agent problems, a rise of 14% when compared to two years previously.

The organisation's report also calculated that the average London tenant pays £436 in up-front fees and £130 at the end of a tenancy.

Market news

Our Rental Index for October revealed that the best performing region, on an annual basis, was the West Midlands - where rents were 5.1% higher than a year previously.

Other areas with impressive annual figures were the East of England, Wales and the North West.

Those not faring as well included Scotland – where average September rents were down 1.7% on an annual basis – and the South West, where annual rental growth was recorded at just 1.2%.

Nationally, we found that annual rental growth has slowed to 3%, while the average UK rent dropped by 0.8% between August and September.

The average UK rent in September was £910 – still some way off the highest figure which is Greater London's £1,555.

Meanwhile, the latest official figures from the Office for National Statistics (ONS) provide a similar message.

The Government figures show that average private rents increased by 2.3% in the year to September. The largest rent rise was recorded in the South at 3.5%, followed by 3% in the East of England.

Two of the of the largest letting agents in the country have also had their say on the market. Connells Group has warned that rental growth is set to cool further over the winter months. And Countrywide says that Brexit uncertainty has narrowed the North/South divide as rents in northern cities grow rapidly, while the pace of growth in southern urban locations has dropped off since June.

Agency news

The biggest letting agency news of the last couple of months is arguably Martin & Co – a firm which is known for its lettings business – acquiring hybrid agency EweMove.

The purchase is the latest in a string of large traditional firms entering the hybrid or online space. Martin & Co's acquisition follows Connells' purchase of Hatched, Savills' investment in YOPA and Countrywide's launch of its own online/hybrid service.

Martin & Co purchased EweMove for a total of £15 million, with £8 million paid up front and a further £7 million to be paid linked to the group's performance.

The deal added 90 new franchisees to Martin & Co's total, although all of EweMove's branding and identity is being retained.

Other big trade stories in the letting agency sector included Strutt & Parker's appointment of Kate Eals, formerly of Hamptons International, as its national Head of Lettings and Belvoir – the UK's largest franchise letting agency – expanding into the Orkney Islands.

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