Right to Buy hits Pimlico Rents for Westminster Council

Margaret Thatcher

Margaret Thatcher

An interesting article today in Social Housing and Local Government news website about how Right To Buy has affected Westminster Council.

Nearly half of Westminster’s 22,000 council homes have been sold through Right-to-Buy in the past 30 years, and because government rules don’t allow local authorities to keep the proceeds of sale the properties haven’t been replaced by further social housing. Of course many of the flats purchased under Rent to Buy have been recycled into Private Sector renting – I personally know of 4 people who were able to retire to the country in middle age on the proceeds of the Right to Buy windfall which could be as much as several hundred thousand pounds in extreme cases.

This has left the council with a situation where they are paying housing benefit to tenants who are renting ex-council properties from private landlords – and this costs the council around four times the rent charged for a council home rented directly from the council, and on occasions up to five or six times the council rent.

What a mess – but probably not a mess that the government wishes to acknowledge as it stems from a conservative policy a generation ago, rather than something that can be neatly pinned on the last government.

Why is Housing the most Important Issue Facing London?

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Why is Housing the most Important Issue Facing London?

New Labour coined the Mantra “Education Education, Education” , relying on the concept that a new generation of educated citizens would vitalise an economy and profit our way to wealth. Yet if those children do not have a decent place to live, the ability to sit quietly and read or do their homework away from their siblings, they will continue to lag behind their more affluent schoolmates. If teenagers do not have a decent place to live, they are more likely to be on the streets when they should be at home, potentially being drawn into gangs and anti-social behaviour. If parents and children do not have a decent place to live, they are more likely to suffer health inequalities. If adults do not have a decent place to live, they are more likely to say, “What has society done for us?” “Why should we obey the law, pay taxes, vote in elections?”

I’m lucky, I am a property professional with a commercial line in finance and a solid Pimlico base of property to secure future property investment. have a decent home. My daughter wants to buy a London Flat, but as a qualified teacher and head of literacy in a major comprehensive she cannot raise the deposit and loan necessary to compete with investors, mainly from overseas, looking for a bargain in a difficult market. She can probably get a small mortgage cannot afford the large deposit now demanded by banks – not on a teacher’s salary!

The media are talking about a generation that will not be able to afford to buy their own homes. First time buyers are frozen out of the housing market while investors ensure London property prices continue to rise. That’s why housing is the priority for the Government, Local Authorities, and the Mayor of London.

There is a lot of land under the Mayor’s control, mainly Transport for London land that can be used to build such homes. With the most expensive element of building in London, the land, available to developers at little or no cost, even commercial investors, could still make their profits and give Londoners decent homes at genuinely affordable rents.

The dream of a property-owning democracy is a good one but investors will always distort the London market and most Londoners simply cannot afford to buy. That means the priority must be to build decent, genuinely affordable homes for rent. Not creating sink estates exclusively for those on the lowest incomes, but building developments where young professionals live alongside those unable to work – in vibrant, mixed communities. And if people are happy to live in these homes, maybe that could take some of the heat out of both the rental and homes for sale markets in London.

Housing Minister Painting to Decorate your Flat?

The Chamber Grant Shapps

The Chamber Grant Shapps

Would you like a Housing Minister Painting to Decorate your Flat? You only have one day left if you want a painting by Housing Minister Grant Shapps to Decorate your Flat – or maybe as a Christmas gift to a friend who is an admirer of the government minister’s hands off approach to government Housing Policy. His hands off policy extends to the painting which is very recognisable as the chamber of the house of commons, but comes with the caveat that it has been “enhanced” by British artist, Julie-Anne Gilburt. No jokes about enhancement of coalition housing policy during the season of goodwill please!

The painting is being auctioned  by eBay and at the time of writing I am the highest bidder – I just consider the price well worth paying for the opportunity to register eBay feedback to the minister! Plus for a good cause 80% of the proceeds will go to The Willow Foundation founded in 1999 by the former Arsenal and Scotland goalkeeper and TV presenter Bob Wilson and his wife Megs as a lasting memorial to their daughter, Anna, who died of cancer aged 31.

Anna battled cancer for five years, yet it was during these years that she, her family and friends, experienced some of their most memorable moments and quality times – treats, days out, concert trips and time simply spent together. The Willow Foundation provides special days to give seriously ill 16 to 40 year olds a break from the stress and difficult realities of diagnosis and treatment. They offer the chance to spend quality time with family and friends doing something they will all enjoy and creating precious memories. Willow strives to create a unique and unforgettable day that is tailored to the needs and dreams of every beneficiary. He or she chooses exactly what they would like to do on their special day and Willow aims to meet and, wherever possible, exceed their expectations, making the day truly special and memorable, the charity takes care of every arrangement, including transport, to ensure a stress free and enjoyable day for all.

The Willow Foundation

The Willow Foundation

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Legal Ombudsman – How to Get Justice from a Dodgy Solicitor

I pursued an errant tenant for a year’s rent, finally 2 years later after using private detectives, and several contested court hearings, I finally won the case and all costs in the High Court, only to have the solicitor never release the funds from their client account & the funds were lost when the partnership dissolved. Apparently from various phone calls to the Law Society etc etc back then there wasn’t an awful lot I could do about it in practice, except be less trusting and more cautious next time.

Legal Wig

Guardian Story on Ombudsman Service

Last week there was a new Sheriff in town, a £20m body set up by Government to ensure that my sort of story cannot happen in a modern fair society. The Ombudsman service puts lawyers on the receiving end of justice aiming to deliver swift but fair decisions through a simplified complaints process.

Note: Legal Ombudsman is NOT the same as the The Legal Services Ombudsman – a service whose function it replaces, and a Quango which the Government announced that it was closing yesterday.

The Ombudsman service itself says:

Our job is to resolve legal complaints in a fair and independent way – we will not take sides.

• We are the Legal Ombudsman for England and Wales. We have been set up by the Office for Legal Complaints (our Board) under the Legal Services Act 2007. Parliament wanted to simplify the system and make sure consumers had access to an independent expert to resolve complaints.

• We opened on 6 October 2010.

• Our service is open to all members of the public, very small businesses, charities, clubs and trusts. Our service is free to these consumers.

• We can get involved in different types of complaints about legal services. Some examples are wills, family issues such as divorce, personal injury and buying or selling a house. There are many others.

• We are independent and impartial. This means that when we start to receive complaints, we will look at the facts in each case and weigh both sides of the story.

• We are not consumer champions or part of the legal profession, and we are also independent of Government.

• If we decide the service you received was unsatisfactory, we can ask the lawyer and the firm to put it right. We may also say that we think that your lawyer provided a reasonable service – if we think this, we will explain why.

Well that sounds good to me!

7 October 2010
Legal Ombudsman takes 497 calls and emails on its first day.

11 October 2010
Welcome Day, LeO welcomes its second wave of new team members as they arrive to start their training.

The ombudsman will be funded by a levy on lawyers and by additional fees paid when complaints are upheld, following a series of controversies about lawyers being regulated by bodies which were perceived as too close to the profession, and which followed a legalistic and in some cases lengthy process. The old system was tainted by the idea that they were the representatives of the profession not the consumer.

The scheme’s chief ombudsman is Adam Sampson, the former director of the homelessness charity Shelter, who says they expected to receive around 100,000 complaints each year. “We are hoping to resolve the majority in an informal manner and to do things quickly.”

The expectation of dealing with 100,000 cases a year is interesting when compared to the work of the first Ombudsman service which started on 2 January 1991. During the first decade of operation, that Ombudsman undertook 10,531 investigations:

Around 60% of the firms of solicitors in England and Wales and around 8% of practising barristers were subject of a complaint to the Ombudsman in that time.

Congratulations to the new team on preparing to deal with a caseload 100 times greater than the old system.

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New Voluntary HMO Licensing Scheme

Oxford City Council

Oxford City Council

Prior to the 2004 Housing Act many Local Authorities (such as Westminster City Council) had their own Licensing Schemes for HMOs (Houses in Multiple Occupation). The 2004 Housing Act unified the many local schemes, provided a legal definition of an HMO, and set up national licensing of HMOs (properties where the occupants don’t live as a single household and share facilities). HMOs of 3 storeys and 5 or more occupants were assigned Mandatory Licensing (the Local Authority were required to operate a licensing scheme), and many members of the local licensing schemes were automatically ported across to the new national scheme. HMO’s of less than 3 storeys or 5 occupants were no longer licensed, and although the 2004 Housing Act did allow Councils to apply for permission to license these properties as well, no Local Authorities applied set up voluntary schemes.

One of the last actions of the outgoing government in April 2010 was to issue an order which allowed local authorities to set up licensing schemes for all HMOs – basically reverting to a system similar to that which existed prior to 2004. Oxford Council is the first Council to use their powers to set up such a scheme (although five additional licensing schemes are in existence in England, along with a further fifteen selective licensing schemes, which are designed to deal with areas of low demand that are blighted by antisocial behaviour), and they give their reasons for this as:

  • Local residents in Oxford have told us that the Council needs to do more to control the impact of HMOs
  • We’ve tried using all our existing powers but they haven’t been enough to make the difference that is needed. We believe that additional licensing will provide us with those extra powers that we need and that it will have a really positive impact.
  • Our aim is to improve the living conditions for tenants within HMOs as they provide the worst accommodation in the City. We also want all landlords to take greater responsibility for managing their properties and ensure that the houses they own don’t blight our neighbourhoods with rubbish and anti-social behaviour.

The Council go on to say something rather strange about how they will implement the scheme:

“Due to the size of the scheme, we will be targeting the highest risk HMOs first. These are the three storey properties and those HMOs where 5 or more people live. We will also be requiring licence applications from all the landlords of those HMOs where we’ve had to take legal action in the past. We’ve estimated it’ll take a year to deal with these high priority HMOs and after that we’ll begin licensing the rest.

The reason I find that statement strange is that they should have been operating a licensing scheme for 3 storey properties for over 4 years now (Mandatory Schemes started in April 2006), so it’s a bit weird to announce a scheme for all properties and then say that you are going to prioritise something that you should already have been doing for years! The rational behind a lot of Oxford’s thinking appears to be driven by their own limited resources. Oxford estimates that 20% of the properties that should have been licensed under the mandatory scheme haven’t been due to landlords taking properties out of use, changing the tenure, selling them, leaving them vacant, or actively avoiding licensing.

Critics of this scheme point out that:

  • The proposed scheme is one which involves annual licensing so landlords will have to reapply, and pay for, a new licence every year. The primary rationale is that the current 5-yearly licensing system has meant that the Council has already spent all the license fee money they derived when the mandatory scheme came into force and so have no money to staff the scheme without providing an annual income.
  • A rationale for the scheme is the belief that it will encourage landlords to deal with anti-social behaviour. Given that private landlords have no legal liability for the behaviour of their tenants and no powers to do anything about such behaviour it is hard to see what the council expects Landlords to achieve in this area.

Schemes like this should be beneficial to Landlords providing accommodation which meets Housing Standards, as it will drive from the market the accidental Landlords who provide low quality accommodation at cheaper rents. Whilst being good news for professional landlords it may not be quite such good news for tenants seeking affordable accommodation (particularly Students in Oxford), inevitably as the slum accommodation is removed from the market the cost of the remaining property will rise, and rents will also include the cost of the licensing scheme which is to be funded by it’s fees (as an example the initial application fee for 2 storey HMO with 3 or 4 occupants is £362 with an annual renewal fee of £150).

PainSmith Solicitors believe that this scheme has the potential to be challenged, and having spoken to counsel are prepared to discuss the possibility of taking such a challenge forward on a no win, no fee basis if a group of interested landlords wished to come forward.

The next few months will be of great interest to Landlords and Tenants alike, not only is there some uncertainty about whether this scheme can be implemented, but the philosophy behind it (regulation of Landlords) is that of the previous administration and contrary to the libertarian instincts of the current government.

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After HIPs – Changes to Flat Buying?

England and Wales (red), with the rest of the ...

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Land Data is the official government appointed organisation that manages and regulates the National Land Information Service (NLIS) providing consumers with official electronic land and property information and is the only provider in England and Wales. Jan Boothroyd, their Chief Executive, has said that Home Information Packs almost immediately became synonymous with price and the reduction in price was mirrored by a reduction in the quality of property searches contained within the pack. Ultimately this exposed consumers to incomplete and out of date information, often insufficient for the needs of a buyer, which led to the buyer’s conveyancer ordering searches for the property again and the unsatisfactory situation where the seller and the buyer were both paying for searches.

With the removal of HIPs Land Data has called for Government to look at new initiatives to improve the home buying process and they believe making official searches compulsory will not only protect the home buying public from poor search practices but will bring instant clarity to a confused market. They say that consumer interests are best served by official, indemnified authoritative data from local authorities, water companies, Land Registry and The Coal Authority.

One simple online search to provide all the information required for a property purchase. Sounds good to me!

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