London Councils Call for Housing Benefit Overhaul

Six councils have called on the government to overhaul the housing benefit system, to give them the power to limit the cash paid out to claimants.
The local authorities, led by Westminster City Council, have written to work and pensions minister Yvette Cooper, to call for a complete overhaul of the system.

"Commonsense dictates that the current system is not fit for purpose and needs to be changed. This isn't simply a Westminster issue as it impacts on councils across London and the UK."

The letter says a system which pays families at least £500 per week in housing benefit – a figure far beyond the reach of most households – is ‘wholly unfair and plainly wrong’.

It adds: ‘With our local knowledge, we believe that local authorities are best placed to influence where residents should be placed… and what benefit levels are appropriate.’

Westminster’s cabinet member for housing, Philippa Roe, said: ‘Commonsense dictates that the current system is not fit for purpose and needs to be changed. This isn't simply a Westminster issue as it impacts on councils across London and the UK.

‘We will be looking to the government to take on board our recommendations to make the system fairer which is all the more urgent in today's very difficult economic climate.’

The letter forms the councils’ response to a government consultation on the future of housing benefit.

LocalGov

London Cycle Hire Scheme

The Cycle Hire Scheme, coming to central London in summer 2010, will be a public bicycle sharing scheme for short journeys in and around central London. You'll be able to pick up a bicycle, use it as you like, then drop it off, ready for the next person.

Docking stations where you can pick up and drop off your bicycle are roughly in Zone 1 of the Tube Map. Eventually there will be 10,200 docking stations,more spaces than bikes, so that it will always be easy to drop off.

Cycle Hire

CML Response Urges Treasury Not to Regulate Buy-to-let

The Council of Mortgage Lenders has today responded formally to the Treasury's consultation on whether to extend the scope of mortgage regulation.

CML director general Michael Coogan added:"While we support some of the proposals to extend regulatory scope, the Treasury and the FSA need to tread carefully to avoid unintended negative consequences. As far as buy to let is concerned, the regulatory proposals are barking up the wrong tree - for amateur property investors, poor investment advice is the issue, not the mortgage."

"The recently-published consultations from the Treasury and the Department for Communities and Local Government on the role of the private rented sector are far more relevant and influential in determining the role played by buy to let. The Treasury recognises that regulation has in the past dampened incentives to invest in the private rental sector. The proposals to extend mortgage regulation designed to protect home-owners to the buy to let sector would simply repeat this mistake."

CML

Will Estate Agents Shake the Hips?

Estate agents are being accused of putting house sales at risk by ignoring the law on Home Information Packs and marketing homes before Hips are prepared. A trade body, the Association of Hip Providers (Ahipp), says mystery shopping exercises at estate agents’ offices in three London boroughs show at least 80 homes for sale without packs.

The body claims four council trading standards departments across the UK have issued fixed penalty notices on estate agents – the official sanction for breaching pack legislation – and says some councils are reporting offending agents to the Office of Fair Trading.The packs include title deeds, search information and energy efficiency data about the property for sale, and must be commissioned by the seller before a home goes on the market.

Those who start marketing a home without a Hip in place can be fined up to £200 a day, and if a purchaser’s conveyancing solicitor discovers the pack is missing the sale will fall through.Ahipp says some estate agents are “openly flouting the law” adding that the penalties served so far are the tip of the iceberg and there are “many more to come.”

Which? found that companies that specialised in preparing packs were generally cheaper than estate agents who offered the service in addition to their sales and marketing of the property. Even so, prices varied widely between direct providers, with some almost £200 dearer than others.

The fear among some in the property industry is that if the Tories remain favourites to win the election, some estate agents will not commission Hips on homes prepared for sale shortly before polling day in the belief that they will no longer be needed.

NBN

Stamp Duty Rush Caused 2-year December High in First-Time Buyers

The number of loans to first-time buyers hit a two-year high in December 2009, driven by a rush to buy properties in the £125,000 - £175,000 bracket before the year-end stamp duty concession expired, according to figures released today by the Council of Mortgage Lenders.

The CML has also published new analysis showing how affordability, especially for first-time buyers, is complicated by the effect of low interest rates when capital repayments are taken into account.

December saw 24,900 loans to first-time buyers, the highest number since November 2007. At £2.9 billion, first-time buyer loans rose 26% from November both by volume and value.

55% of house purchase loans were on properties costing under £175,000 and therefore exempt from stamp duty, up from 51% in November. 10,300 first-time buyers and 11,200 home movers bought a property of between £125,000 and £175,000 in December, up 63% from 6,300 and 49% from 7,500 respectively from November. This clearly indicates a rush to complete purchases before January, when stamp duty would have added an additional 1% of the purchase price onto the transaction costs.

House purchase lending in general totalled 63,000 loans worth £8.5 billion in December, up from 51,000 (£7.1 billion) in November and from 33,000 (£4.4 billion) in December 08. The number of loans for remortgage stayed the same as November at 28,000, with the value falling from £3.5 billion to £3.4 billion, and was down from 41,000 transactions (£5.7 billion) in December 2008.

Bob Pannell, author of the research, said today:

“With 90% of loans advanced in December being repayment mortgages, it would seem appropriate to take capital payments into account when assessing affordability.

“Typical capital and interest payments for a recent first-time buyer would represent about 21% of pre-tax income. This is considerably more than the 14-15% that mortgage interest costs alone would be, and demonstrates why using initial mortgage interest costs to assess affordability risks giving an overly flattering picture."

CML

House for Sale Boards Banned in West London

Hammersmith and Fulham council orders outsize signs to be torn down

House for Sale signs have been banned in west London after estate agents were caught breaking the law by sticking up massive boards.

"If we see a board and it is too big, then that constitutes a criminal act," Ryan Kristiansen, planning enforcement officer at Hammersmith and Fulham council, told Property Week.

The council gives estate agents a few days to take down signs that break the law and, if house-sellers don't play ball, out comes a £2,500 fine, plus £250 a day for each day the offending board stays put.

According to the law, boards can be 24 inches by 32 inches (about half a square metre), but plenty exceed this limit as they compete for attention.

While residents might be thankful that at last someone has taken an axe to the boards that disfigure many a London street, local estate agents aren't too pleased, though they admit they know they have been breaking the law.

londonnet