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PM fires Brexit starting gun, and government calls for an end to newly built houses being sold as leaseholds

Week in Westminster

Published: 31 March 2017 | Author: Michelle Vosper

Some nine months after the EU referendum, the prime minister has invoked Article 50 to begin the two-year process of the UK leaving the European Union. The government published a white paper on the “Great Repeal Bill”, legislation which is designed to translate EU law into UK law. And the European Council published draft guidelines for the Brexit negotiation which it aims to adopt at a Summit on 29 April 2017.

As if things weren’t already complicated enough, the Scottish Parliament voted in favour of a second Scottish referendum in 18-24 months time.

And there is a political crisis in Northern Ireland, with the UK government indicating that it will consider options, including direct rule, after Easter if talks to form a Northern Ireland Executive fail.

Now to housing and mortgages-related business….

Communities secretary Sajid Javid has called on the home building industry to put an end to selling newly build houses as leasehold properties….or he will. Speaking at the Home Builders Federation’s Policy Conference, Mr Javid said:

“I’m hearing about more and more cases where developers are selling newly-built houses on a leasehold basis for no obvious reason. And I’m hearing about more and more cases where ground rent is being used in an entirely unjustifiable and unfair way…. the last thing I want to do is tie the industry up in more red tape at a time when supply is already so far short of demand. But as a government committed to building a fairer society, I don’t see how we can look the other way while these practically feudal practices persist. So I will look to ensure Help to Buy Equity Loans are only used to support new build houses on acceptable terms. This will send a serious message to the building industry: if you want the government to help you build and sell homes, you have to sell them on fair terms.”

Government responds to e-petition

The government has responded to the e-petition on “make paying rent enough proof that you are able to meet mortgage repayments” which has attracted 145,844 signatures.

Guardianship (Missing Persons) Bill

The Guardianship (Missing Persons) Bill completed its Commons stages. We are supporting this Bill, which will give the courts the power to appoint a guardian to take control of property and financial affairs of a person who has been missing for at least 90 days and act on their behalf. The Bill was introduced into the House of Lords this week and is scheduled to have its second reading debate on 6 April.

Criminal Finances Bill

During a committee stage debate on the Criminal Finances Bill, Home Office minister Baroness Williams updated peers on the action that government is taking to improve the effectiveness of anti-money laundering regulation. She noted the Treasury consultation on new money laundering regulations to strengthen the obligations on all supervisors which closes on 12 April. The minister said government recognised the need for more co-ordination between regulators and supervisors of the regulated sector in relation to tackling money laundering. She explained that the new office for professional body anti-money laundering supervision would therefore work with professional bodies to help ensure compliance with the regulations. She confirmed that government would consult on draft regulations to underpin the new office over the summer. These regulations would then be finalised and laid in Parliament in the autumn, with a view to the new body being fully operational by the start of 2018.

Compulsory client money protection

The government will introduce compulsory client money protection for all letting agents. Responding to a parliamentary question, DCLG minister Lord Bourne of Aberystwyth confirmed that the government “will consult on how mandatory client money protection should be implemented and enforced”.

“Breathing space scheme” 

MPs debated proposals for a “breathing space scheme” to help families in debt. The scheme would introduce “breathing space” from creditors so that people in financial difficulty can get the help they need to stop their debts from spiralling, and introduce a safer way for families to make agreed debt repayments with creditors. Economic secretary Simon Kirby responded by saying the government is looking into the costs and benefits of implementing such a scheme, and would consult further when they are in a position to do so.

Designated minister for financial inclusion

The Lords Financial Exclusion select committee has called on government to appoint a designated minister for financial inclusion, and expand the remit of the Financial Conduct Authority to include a statutory duty to promote financial inclusion as one of its key objectives. The Committee’s report, “Tackling financial exclusion: a country that works for everyone?” , suggested that the demise of the Financial Inclusion Taskforce has resulted in work to address financial inclusion lacking “central co-ordination and oversight”, and gives the impression that financial inclusion is no longer a key priority for the government.

Help to Buy

There have been over 259,000 completions using one or more of the Help to Buy schemes, 84% of which were first-time buyers, according to the latest DCLG statistics released this week. Over 868,000 consumers have opened a Help to Buy ISA.

New report from Social Mobility Commission

A third of people in England rely on family for a financial gift or loan to help them buy their first home compared to one in five just seven years ago, according to a new report from the Social Mobility Commission. The growing gap between house prices and wages has led to home ownership among 25-29 year olds to fall from 63% in 1990 to 31% today.

Help to Buy Scotland scheme

The Scottish government has announced that the price cap on properties eligible for the Help to Buy Scotland scheme will remain at £200,000 in 2018/19, and not reduce to £175,000 as originally planned.

And finally...

Members of the Welsh Parliament has considered amendments to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill. Assembly members agreed to an amendment placing an obligation on the Welsh Revenue Authority to publish guidance for consumers when buying property situated on both sides of the Welsh and English border was agreed to. The Welsh government believed this guidance, along with digital Land Registry maps identifying the Wales/England border, would bring more clarity and certainty than formulaic approaches put forward in other amendments to the Bill. The vote by the Assembly to pass the final text of the Bill will take place on 4 April.