Three cheers for apprenticeships!

Year 13 students around the country got their A-level results this morning and many will be off to university in the autumn. There are plenty of degrees on offer in property-related subjects and certain universities such as Reading and Nottingham Trent have a strong reputation for delivering a wide variety of courses.

But as Dave Sheridan, Executive Chairman of ilke Homes rightly pointed out today, not everyone who leaves school wants to go to university and not all 16-year olds fancy two more years in sixth-form. So why don’t we hear more about the alternatives for school leavers?  With continuing uncertainty over Brexit and a worsening skills gap in the property industry, it’s never been more important to make sure the nation has a workforce fit for the future.

A great option is to do an apprenticeship. But as Dave says, for too long they have been regarded as a second-best option. He thinks everyone in the sector should be promoting the fact that apprenticeships, training and upskilling programmes are provided by lots of employers and they are not just for school leavers. We agree. At Ringley, training is a big part of what we do and we have built our own apprenticeships in IT/social media, business administration and customer service finance and property management.

We are an Investors in People company and we’re delighted to maintain this accolade for the great care and attention with which we look after our staff, helping them develop, improve and gain greater job satisfaction. In 2012 Ringley achieved the silver standard – which is rare for small companies.

As part of our commitment to training, we have fully embraced the apprenticeship route for new staff. Our MD Mary-Anne Bowring is proud that Ringley is an organisation that fundamentally believes in investing in its people and supporting their career progression. We prefer to help our own staff to attain professional qualifications rather than assume a university degree automatically delivers candidates with a true understanding of property and law in practice. Mary-Anne firmly believes there is no substitute for on the job training; as skills and experience mature then we believe true connections are made between academic learning and practical application. This is why we offer our staff training contracts to support Association of Accounting Technicians (AAT) Institute of Legal Executives (ILEX) and RICS qualification routes.

So if you or someone in your family is interested in a career in property, don’t forget there are plenty of ways to get those all- important property qualifications. As many of our staff have discovered, getting a degree isn’t the only way into the property business.

Our service to you is changing – for the better!

Last week we blogged about the likely regulation of property agents. Today it’s official. Change is coming. And it should have a positive impact on the way the residential sector delivers services to our customers.

Lord Best has delivered the final report of the Regulation of Property Agents (RoPA) working group. This sets out ways to make property agents more effective, more profesional and more accountable to their clients. For some time, the government has been determined to regulate residential property agents, enforce a mandatory qualification and set out a new code of practice. This will now happen but it will take time. Setting the wheels of legislation in motion is rarely fast – and with Brexit taking up parliamentary time, don’t hold your breath!

But there is now no doubt that regulation is on its way. The initiative has cross-party support and the public want to see change.

R0PA report: In future, only qualified agents will be able to operate in the leasehold sector

So what is being proposed? First, the plans affect all residential agents. That means everyone working in sales, lettings and leasehold/block management and build-to-rent. In his report, Lord Best suggests a new regulator, accountable to the government and responsible for producing a new code of practice for all residential property agents. That means firms AND individuals. A list of “reserved activities” will also be produced and companies carrying out those activities must be regulated and have a licence to operate. Individuals will need a qualification and a licence to practice. The regulator will issue the licences. They can be taken away if businesses or individual property agents don’t play by the rules.

Lord Best also proposes the new regulator should set the syllabus for a mandatory qualification and this should be approved by Ofqual. The suggestion is that sales and lettings agents be qualified to level 3 of Ofqual’s Regulated Qualification Framework and block managers should be qualified to level 4. In English, level 3 is the equivalent of the IRPM’s Associate qualification and level 4 equates to MIRPM.

What all this means is that, as we speculated last week, some agents will need to upskill, while others will be granted a licence to practice based on their existing qualifications.

So now it’s over to government to make this happen. Ultimately the aim is to protect consumers, support an ethical culture throughout the sector, and prevent bad practice. It’s hard to argue with that!

Rogue agents – your days are numbered

The government is calling time on rogue agents. Compulsory qualification and regulation are on the way. To-date, the property industry has always been self-regulating, with a mix of qualified and unqualified agents out there and government reluctant to get involved.

This is unacceptable – with customers expected to pick their way through a smorgasbord of different property industry bodies, all saying their members are reputable but still, in some cases, giving them enough rope to hang themselves with.

Until now, the argument has been that individual member organisations were capable of regulating their own members and the market would work in favour of professional agents, pushing out the rogue operators. This softly-softly approach hasn’t worked. There has been a race to the bottom, with consumers too often seduced by low fees, finding out too late that their advisers can’t deliver on their promised service offer.

fter relentless lobbying from both industry and consumer organisations, government has tightened up on redress for customers, has moved to protect deposit monies and has finally recognised the need for proper regulation and qualifications for all.

The government is finally calling time on rogue agents

Speaking at a major leasehold event in June, Lord Richard Best, the chair of a working group looking at regulation of property agents, told managing agents that in future their firms will be regulated. They themselves will need to upskill if they don’t already hold recognised professional qualifications. What is certain is that “there will be a Regulator and there will be regulation – we need to sort out the rogues and raise standards,” says Lord Best. “Any new regime will apply not only to property managers but to letting and estate agents as well as to international property agents – with reference to UK sales – and to property guardians.”  

In future, all agents will need qualifications that are recognised by OffQual. Existing qualifications will be ‘grandparented’ or recognised under the new rules but some agents will need to ramp up their CPD or qualifying training in order to meet the new benchmark.

So the days of the cowboys are numbered – thankfully. But of course, all this takes time – two years at least thinks Lord Best. As chartered surveyors, we employ many well qualified and experienced property people at Ringley and we fully support any attempt to raise the bar of professionalism in our industry. We await the final recommendations of the working group with interest.

No new leasehold houses – but what about the old ones?

No more leasehold houses will be sold in England and Wales, the government said last week. Developers will no longer be able to hold homeowners to ransom by selling their freeholds and doubling ground rents and freeholders will be able to challenge estate management fees. Legislation willbe brought in to ban long leases on houses and ground rents will be kept to a minimum for both new build houses and flats.

No new leasehold houses are to be built – but what do you do if you already live in one?

This is welcome news for new homebuyers but what is being done about existing leaseholders who are already trapped by escalating charges?

There are an estimated 4.3 million leasehold homes in England and 1.4 million of them are houses. Campaigning group the Leasehold Knowledge Partnership believes that this equates to 100,000 families trapped in houses that are now impossible to sell because their contracts are so unfair. According to the Mail Online this week, “more than half of new houses were sold on ‘unfair’ leasehold terms in some towns last year” despite then Communities Secretary Sajid Javid pledging a ban in 2017. This is backed up by figures from the House of Commons which reveal that a total of 3,394 new leasehold houses were sold across England last year.

Communities Secretary James Brokenshire has now promised new laws to take the ban forward, saying “We will legislate to ensure that in the future – unless there are exceptional circumstances – all new houses will be sold on a freehold basis, with ground rents in future leases reduced to zero”.

So far so good. But the problem now, as the Leasehold Knowledge Partnership rightly points out, is that government is in danger of creating a two-tier market in the leasehold sector. Clearly the ban – when it comes –  is a step in the right direction for homeowners. But two issues remain. Legislation takes time, so what happens to those buying homes now? And what is the outlook for existing homeowners? The MHCLG now needs to apply itself to the issues being faced by thousands of families around the country and find a way to bring genuine fairness to the sector.

Leasehold reform – there’s more to come!

Yet more reform is on the table and is set to affect anyone with a leasehold home. Yesterday, the government responded to the Housing, Communities and Local Government Select Committee’s report on Leasehold Reform, and has come out largely in favour of the measures it is recommending.

More leasehold reform is on the way – but how long will it take?

Proposals include:

  • giving clearer information to consumers on how to buy and sell leasehold properties
  • Looking again at commonhold in light of the Law Commission’s recent report
  • working with developers on a standard ‘key features’ document so consumers have clear details of a lease before they buy
  • removing any financial value from future ground rent
  • ensuring the Law Commission is able to properly consider the use of unfair terms
  • updating planning guidance to ensure clear and transparent agreement between developers and local authorities on public areas and utilities to be adopted
  • considering recommendations on permission fees, major works (including a code of practice) and other charges.
  • exploring the best way to challenge unjustifiable legal costs, including looking again at legislation
  • exploring legal changes to forfeiture
  • extending compulsory membership of a redress scheme to all freeholders of leasehold properties
  • implementing improvements to the enfranchisement system as soon as possible

How long will these recommendations take –  and will some end up being watered down along the way? Nothing is certain. But what is clear is that there is now the will at policy level to make life easier for leaseholders. And that has to be good news.

If you are interested in reading the response document in full, you can donwload it here.

How to lease: will the new guide help homebuyers?

A new How to Lease guide for homebuyers, produced by the government, is out now. The leaflet follows a similar format to the How to Rent guide for tenants, explaining the ins and outs of leasehold in a clear, accessible way.

How many times have we all heard leaseholders who have run into problems with their freeholder or their lease, saying they didn’t understand the implications of buying a leasehold property? It happens all the time. Leasehold tenure is complicated and anything that can be done to make it easier to grasp, must be a step in the right direction.

A new guide for leaseholders – will it make an impact?

The Institute of Residential Property Management points out today that under the Consumer Protection Regulations 2008, the government has the power to ensure that basic leasehold terms are included in estate agency sales information. The National Trading Standards Estate Agency Team has a consumer guide for potential buyers confirming that the main terms of the lease are “material information” that “would affect the transactional decision of the average consumer”. It stop short of saying the same to estate agents and the IRPM is lobbying government to ensure that buyers are given this information up front.

“This would mean that buyers would know what they are buying and mortgage valuers would be able to value the property on its true lease terms,” says the IRPM. The professional body is also working with lenders and surveyors to push for this transparency in the home sales process, with support from NAEA Propertymark. Sadly, to-date, the IRPM sees little improvement in the information that estate agents provide to buyers.

So will the How to Lease guide help? If it is to make any real impact, estate agents must be instructed to give the guide to ALL prospective leaseholders with the understanding that they take the time to read it. Ideally, they will talk buyers carefully through the key points. The guide is only worthwhile if they are able to discuss any issues they have with either their estate agent, their solicitor or both – and receive properly informed responses to their questions.

Focus on property management – but make sure you get it right!

Letting agents have been told today, that by focusing on lettings only and not offering property management, they could be losing out on “thousands of pounds of potential income”. New research from outsourcing supplier ARPM, reported in Letting Agent Today, shows that many agents typically offer let-only. By offering a full management service too, ARPM calculates they could boost average annual income by up to 80% per tenancy. That’s big money.

The report reveals an untapped market of almost one million landlords in London alone who only use letting agents to find them tenants – or don’t use one at all. With private rentals expanding across the country year-on-year and many landlords living remotely from their investment property, there is huge potential for growth. And a chance to claw back the estimated £400 per letting that agents are expected to lose as a result of the tenant fees ban.

Property management is not a business to be entered into lightly

But – and this is a big but – property management is a serious business. The government has agents in its sights right now and poor service in our sector is soon to be outlawed by the advent of stronger regulation and the need for recognised qualifications. So, like marriage, this isn’t a client relationship to be entered into lightly.

As chartered surveyors and professional managing agents, we have specialised in this service for many years. Our lettings division Life by Ringley, based in Manchester and servicing clients across the region, has a clear understanding of the differing needs of landlords and tenants. We provide both basic and full management services, with fees clearly stated from the start. Click here to find out more. https://lifebyringley.co.uk/

As well as managing rental property, Ringley specialises in leasehold blocks. Rather than a one-size-fits-all approach, our Blockcare offer has something for everyone from a basic service to fully managed options. Fees are charged according to the level of management you require. Sign-up is easy and almost everything from site reports, minutes, invoicing and accounts can be done online. We can take us much or as little of the hassle out of your management requirements as you want us to.

We even have a tailor-made package for you to use if you can’t afford a managing agent! Click here to find a package that suits your needs https://www.ringley.co.uk/property_management

New building regulations are coming your way

The government is expected to publish draft legislation to deliver new post-Grenfell building regulations by the end of this month. The aim is to ensure that all new buildings, including high-rise blocks, are built to robust fire and life safety standards, reducing the possibility of a repeat of the 2017 tragedy. We hear the new regime could be in place by 2021.

According to press reports, the government is likely to set out proposals for new legislation before the end of May and, according to Inside Housing, certainly before 14 June – the second anniversary of the Grenfell Tower fire. The consultation period on these ideas will probably last around eight weeks.

The proposals will be based on recommendations set out in Dame Judith Hackitt’s review of the building regulations, which was carried out last year, and it is likely that included in the new regime will be:

  • a designated ‘dutyholder’ in every building, who will take on new responsibilities for building safety;
  • A new regulator will be set up to take responsibility for building safety; and
  • Changes to the current rules around building control. These may make it impossible for developers to choose their own building control regulator as they can under the existing regime.

The government is also expected to consult on ways to better engage residents in decisions about their building and address their safety concerns.

The proposal that will have the biggest impact on flat owners and their property managers is the introduction of the role of ‘dutyholder’ or in other words, a building safety manager. Block managers already carry responsibility for health & safety but Dame Judith wants a named individual to be held responsible for the safety of a building and its residents. This could be a property/building manager, a separate specialist or even – with the right training – an RMC or RTMCo director. Until the consultation is published, it is impossible to second guess the way this will go. But one thing is certain, fire and life safety is right at the top of the housing agenda. Whether block managers are in the frame themselves or will be responsible for working with another specialist, they must ensure their skills are bang up-to-date because residents will want to know they are up to the job.

Dangerous cladding will be replaced on private blocks – at last


Dangerous ACM cladding like the type used on Grenfell Tower is finally to be replaced on private blocks

Leaseholders in the 156 private blocks around the country with dangerous Grenfell-style cladding, received the good news last week that the government is to stump up £200 million to pay for it to be replaced. Building owners now have three months to access the fund. The row over who should pay for new cladding on private blocks has rumbled on for almost two years, since the Grenfell fire in June 2017 revealed the fatal flaws of ACM coverings on high rise blocks.

What it also revealed – to the public as well as to those already in the know – is the conundrum at the heart of leasehold: which is that he who pays the piper, doesn’t necessarily call the tune. Or in other words, the flat owners who pay the service charge are not always involved in the decisions that are taken about their blocks. This frequently applies as much to the placement of insurance and the appointment of maintenance contractors as it does to decisions around the specification of building materials. However, flat owners are not building experts. They have to rely on their property managers to do the right thing and involve residents in decision making wherever possible. It is important that they communicate the thinking behind the choices that are made, in order to ensure the best outcomes for residents as well as landlords.

When it comes to cladding – and other major building components – neither property managers nor residents have an input first time round. Those decisions are down to architects and developers who, in turn, must adhere to the building regulations. The choice of replacement cladding will now be under scrutiny from all sides and the government has already told the leasehold sector that the funding announced last week is “a one-time only offer”.  At the last count, there were 156 private blocks around the country still in need of remediation. With £200 million on offer, it’s not hard to do the maths. Price, as always, will be a factor in determining which products are most appropriate.

The other interesting point to note is that buried in the small print of the government’s statement are these words: “As a condition of funding, we will require the building owner to take reasonable steps to recover the costs from those responsible for the presence of the unsafe cladding”. So watch this space – this story isn’t over yet.

Solving the block safety conundrum

 

Safety is, of course, a key aspect of block management. But who should be responsible for ensuring the safety of residents? In the wake of the tragic fire at Grenfell Tower in 2017, Dame Judith Hackitt was asked to carry out a review of the building regulations, putting safety firmly in the spotlight.

Sounds simple? It isn’t, as Andrew Bulmer, the CEO of the Institute of Residential Property Management pointed out in an article earlier this week.

Dame Judith Hackitt, chaired the Independent Review of Building Regulations and Fire Safety set up following the Grenfell Tower tragedy
Dame Judith Hackitt chaired the Independent Review of Building Regulations and Fire Safety set up following the Grenfell Tower tragedy

In her final report, Dame Judith proposes a named individual – a ‘dutyholder’ – should be ultimately responsible for the safety of a building. So far so good. That person should be the owner, she suggests. Holding someone to account seems sensible, so what’s the problem?

The difficulty with Dame Judith’s plan is the complexity of our leasehold system, with its matrix of different roles and responsibilities.

As Andrew explains, when the freehold is owned by the leaseholders or commonholders (see my 20th December blog on commonhold reform) through a vehicle such as a Residents Management Company, or Right to Manage Company, that means one of the resident directors will have to stand forward as the ‘dutyholder’ for the safety of the block.  The day-to-day responsibilities of the safe management of the building may be subcontracted to an agent but that dutyholder is ultimately responsible and could end up in jail if it all goes wrong.

Andrew foresees what he politely describes as “ lively” residents’ meetings as the directors try to decide between them who is prepared to take on that responsibility, or when the developer tries to hand over the completed site to the residents.

Yesterday, I wrote about Lord Best’s working group, which the IRPM sits on. The organisation has highlighted this ‘dutyholder’ conundrum and the leasehold reform team at the Ministry of Housing Communities and Local Government  is trying to find a way forward.  Any overhaul of a longstanding system is complex and “carries significant risk of unintended consequences,” says Andrew. He doesn’t envy the MHCLG in their task – and nor do I.

I have returned regularly to leasehold reform in this blog. Today’s post illustrates yet again why that reform is so badly needed and why the debate over it could go on for some time

.