Some interesting news items this week.
Client Money Protection
The Client Money Protection (CMP) regulations are due to go live on 1 April (all fools day) and we now have two approved schemes.
The first is Client Money Protect from Hamilton Fraser.
Eddie Hooker, CEO of Hamilton Fraser, said:
After being fully involved in the consultation and shaping of the Client Money Protection legislation, we’re delighted with the approval.
As administrators of a CMP scheme since 2014, which enabled agents to join on a voluntary basis, we are proud to have been approved to continue providing CMP under the new legislation. We have worked hard to create a scheme that fully encapsulates the principle of what the government is trying to do by introducing mandatory client money protection. We want to be the gold standard of client money protection schemes.
In an increasingly regulated industry in which landlords are feeling the strain, this will offer some positive news in landlords’ and tenants’ favour. Tenants’ deposits will remain covered by the deposit protection schemes, but CMP will act as a backstop should there be an issue.
There are four requirements to be eligible for this scheme:
- A segregated client money bank account
- Membership of an external consumer redress scheme (Hamilton Fraser also own the Property Redress Scheme so this will be a good choice)
- Professional Indemnity Insurance (they also provide other insurance products) and
- To agree to abide by the terms and conditions of the Client Money Protect scheme
The main problem about this is the banks who are often unwilling to open segregated client money accounts unless the customer is regulated – for example by Arla Propertymark or RICS. This could hamper the ability of agents who are not a member of a scheme to apply with the regulations on 1 April.
The reasons why banks are unwilling is that they reserve the right, if a customer is overdrawn, to transfer money from an account in credit to repay the overdrawn account. Obviously, they could not do this with a client money account.
This is a big problem as agents who cannot get CMP by 1 April will be trading illegally and could be fined up to £30,000 along with fines of £5,000 for failing to display their CMP membership details.
Another scheme this time offered for members of UKALA (the UK Association of Letting Agents) has been approved – presumably, the problem with opening client bank accounts will not arise here as banks would accept the UKALA membership as qualifying for the client account.
CMA asked to look into student lettings
There is a new report out from the National Union of Students (reported by Property Industry Eye) which is strongly critical of student accommodation. The UK Competition Watchdog the CMA is being asked to investigate various unfair practices such as
- Pressurising students to sign up to properties months in advance. Most students it seems, start looking in November and December for properties for the next academic year start the following autumn, and
- The use of ‘sham licenses‘ used to try to circumvent the protections in tenancy law
Other problems with properties provided to students include
- pest infestations
- damp and mould
- broken furniture
- issues with electrical and gas safety
- failure to provide proper documentation
Mind you, on a personal note, when I was a student (a LONG time ago) I rented a small flat which would probably have failed all fire regs, and had an outside WC and no bathroom (I had to use the one in the flat upstairs – I was friends with the students there). I was happy there though as it was comfortable and warm, had a central location and was only £4 a week, which even in those long off days was pretty cheap.
Energy Efficiency in Homes
A new report from the independent Committee on Climate Change (covered by the BBC) is calling for an end to gas in homes, a massive improvement in the energy efficiency in new build homes, and more work done retrofitting existing homes.
Here are some of the suggestions:
- A ban on new homes connecting to the gas grid within 6 years
- New build homes in the country to have heat pumps and induction hobs
- New housing estates in the city to be kept warm by hot water networks – heated by waste heat from industry, or heat pumps
It seems that emissions from housing suddenly increased last year – mainly it seems from heating boilers. But to meet climate targets, all homes in future will have to virtually eliminate emissions.
The committee wants the government to treat the renovation of the UK’s housing stock as a national infrastructure priority, akin to widening roads.
Upgrades and repairs to existing homes should include plans for shading and ventilation to combat the extreme heatwaves expected in future and there should also be measures to reduce indoor moisture, improve air quality, water efficiency and protection in homes at risk of flooding.
The reason carbon emissions are rising again is apparently down to the Cameron government. Ed Matthew, from the climate think tank E3G, told the BBC:
The reason carbon emissions are rising again in homes is the decision by the Cameron government to slash funding for home energy efficiency. As a result, home insulation has crashed by 95% since 2012.
The chancellor must make building energy efficiency an infrastructure investment priority. Failure to do so will lead to entrenched fuel poverty, failure to meet carbon budgets, higher NHS costs and higher energy bills for us all
The BBC report says that the Treasury is reluctant to invest in insulation private houses as it believes people should pay for this themselves without public money.
Ed Matthew comments:
They seem to have missed the memo on the climate emergency