Artificial Intelligence Act Receives final approval

The European Union’s Artificial Intelligence Act has received final approval, making it the world’s first major regulation specifically targeting AI. The EU Council formally approved the Act on Tuesday, with the legislation expected to enter into force in mid-June and become effective in 2026. This development is significant for biometrics developers, providers, and users.

Companies that violate the Act may face fines from the EU Commission ranging from 7 million euros (US$7.5 million) to €35 million ($38 million) or between 1.5 and 7 percent of their annual global revenues. SMEs and start-ups will be subject to proportional administrative fines.

The Act's implementation timeline is detailed: General-purpose AI models (GPAI) must adopt obligations 12 months after the Act takes effect, while AI systems in regulated products will have 36 months, according to Reuters.

Since its draft publication in 2021, the AI Act has sparked intense debate. Human rights organizations have criticized it for inadequate protections, while business groups have argued it imposes heavy compliance burdens.

A provisional agreement on the Act was reached in December 2023 following a three-day marathon negotiation, which deviated from the European Parliament's June position advocating a full ban on real-time biometric surveillance. The technical details were finalized in early February 2024, and the Act was passed by the European Parliament in March. The legislation adopts a “risk-based” approach, categorizing AI systems by risk and imposing stricter rules on those deemed harmful to society.

AI applications with unacceptable risk are banned, including those using real-time remote biometric identification, such as facial recognition in public spaces. Exceptions exist for law enforcement in specific cases like kidnappings and terrorism. Other prohibited applications include biometric categorization based on sensitive characteristics, emotion recognition in workplaces and schools, social scoring, predictive policing, and applications that manipulate human behavior. The law also forbids the untargeted scraping of facial images from the web or CCTV footage for creating facial recognition databases.

The legislation introduces transparency requirements, including clear labeling for deepfakes.

To ensure effective implementation, the AI Act establishes new institutions. The AI Office, attached to the European Commission, will coordinate the Act's implementation among Member States and keep classification rules and procedures updated with technological developments. Other bodies include the European Artificial Intelligence Board, the Advisory Forum, and the Scientific Panel of Independent Experts.

Additionally, the law envisions AI regulatory sandboxes for testing AI systems in real-world conditions.

What will a Labour Win mean for Rental Reform?

If Labour wins the general election on 4th July 2024, their approach to the Renters Reform Bill and the private rented sector (PRS) is expected to be more comprehensive and tenant-focused.

Here are some key elements of Labour’s proposed policies for the PRS:

1-       Rent Caps

Labour has expressed a desire to implement rent controls to address affordability issues. This could include capping annual rent increases to prevent excessive hikes and ensure rents are in line with local incomes and housing market conditions.

2-       Abolishing Section 21 "No-Fault" Evictions

Labour supports the abolition of Section 21 "no-fault" evictions, which would prevent landlords from evicting tenants without a specific reason. This aligns with the current proposals in the Renters Reform Bill and is aimed at providing greater security and stability for renters.

3-       Ending Discriminatory Practices

Labour is committed to ending discrimination in the rental market, including practices that unfairly exclude certain groups of tenants. This could involve stricter regulations against discriminatory ads and policies and better enforcement of existing anti-discrimination laws.

4-       Longer Tenancies

Labour advocates for longer and more secure tenancies, which would provide tenants with greater stability and peace of mind. This could involve default tenancy agreements lasting three years or more, giving tenants more confidence and security in their housing situation.

5-       Renters’ Charter

Labour has proposed a Renters’ Charter that would set out the rights and responsibilities of tenants and landlords, aiming to create a fairer and more balanced rental market. This charter would provide clear guidelines on issues such as repairs, rent increases, and tenant evictions.

6-        Housing Benefit Reform

Labour aims to reform the housing benefit system to ensure it adequately covers the cost of rent. This includes aligning housing benefit rates with actual rental prices in local markets, reducing the risk of homelessness and housing insecurity among benefit recipients.

7-       Support for Tenants’ Unions

Labour supports the establishment and growth of tenants’ unions, which can advocate for renters’ rights, provide support and advice, and help tenants collectively bargain for better conditions.

8-       Energy Efficiency Improvements

Labour is likely to push for improvements in the energy efficiency of rental properties, helping to reduce tenants’ energy bills and contribute to environmental sustainability.

This could include mandatory energy efficiency standards and support for landlords to make necessary upgrades.

If Labour forms the next government, their approach to the Renters Reform Bill and the PRS will likely be more aggressive in implementing tenant protections and addressing affordability issues. With a focus on rent caps, longer tenancies, and stronger regulations, Labour's policies aim to create a fairer and more secure rental market for millions of renters across the country.

The Fate of the Renters Reform Bill and the Leasehold & Freehold Reform Bill

With a general election called for 4th July 2024, the long-awaited Renters Reform Bill and the Leasehold & Freehold Reform Bill face an uncertain future. Both bills, years in the making and the result of extensive campaigning and consultation, are now at risk of being stalled or scrapped entirely.

The parliamentary calendar adds to the urgency. Both the House of Lords and the House of Commons break for the Whitsun recess on 24th May, leaving only a narrow window for legislative action.

The impending recess and subsequent dissolution of Parliament for the election mean that any bills not passed will lapse.

The "wash-up" period, the final days of a parliamentary session before dissolution, offers a slim hope for the bills.

During this time, the government and opposition parties often negotiate to pass uncontroversial or broadly supported legislation quickly.

However, this process is typically reserved for less contentious measures.

Given the significant changes proposed by both the Renters Reform Bill and the Leasehold & Freehold Reform Bill, including abolishing Section 21 "no-fault" evictions and overhauling leasehold laws, it's uncertain whether they could be expedited through the wash-up without significant compromise.

The Renters Reform Bill, which aims to transform the rental market by enhancing tenant protections and ensuring fairer conditions, is at a critical juncture. Key provisions include the abolition of Section 21 evictions, the introduction of a new ombudsman for private landlords, and reforms to improve housing standards.

 If the bill is not passed before Parliament dissolves, it will have to be reintroduced in the new session, a process that could delay its implementation by months or even years, depending on the priorities of the next government.

 Similarly, the Leasehold & Freehold Reform Bill, designed to address the complexities and inequalities in leasehold arrangements, is under threat.

This bill seeks to make it easier and cheaper for leaseholders to buy their freeholds, extend their leases, and challenge unfair charges. As with the Renters Reform Bill, any delay could postpone much-needed reforms, leaving many homeowners in limbo.

The fate of both bills hinges on the outcome of the general election and the priorities of the incoming government.

If the current administration is re-elected, there is a strong chance the bills will be reintroduced, potentially with some amendments.

However, if there is a change in government, the new administration may have different legislative priorities, which could further delay or alter the proposed reforms.

The announcement of a general election on 4th July 2024 places the Renters Reform Bill and the Leasehold & Freehold Reform Bill in a precarious position. The upcoming Whitsun recess and the limited time available for the wash-up period make it unlikely that these complex and significant pieces of legislation will be passed before Parliament is dissolved. As stakeholders and campaigners anxiously await the election results, the future of these crucial reforms remains uncertain, highlighting the often precarious nature of legislative progress in the face of political change.

Be Renters Reform Ready - Why letting agents will need to evolve fast

The Renters Reform Bill will soon be Law, it is not only the biggest shake-up of housing law in 30 years, it is also the biggest impact to letting agents' income streams in as many years.

This transformative piece of legislation seeks to overhaul the rental market, offering enhanced protections for tenants while posing significant financial adjustments for landlords and letting agents.

Central to the reform is the elimination of Section 21 “no-fault” evictions, a practice that has long been a source of anxiety for tenants.

For letting agents, however, this translates into a substantial disruption of their traditional revenue model.

The most significant financial impact on letting agents arises from the ending of fixed-term tenancies.

Historically, these agreements have been the norm, creating a cyclical pattern where tenancies are renewed.

Each renewal has typically involved a fee, which could be charged to, the landlord.

These fees have been a dependable source of income for letting agents, helping to sustain their business operations.

With the introduction of open-ended tenancies under the new reform, the necessity for renewals—and the accompanying fees—will be eliminated. This shift means letting agents will no longer benefit from a steady stream of renewal fee income. The financial implications are profound, forcing many agents to rethink their business strategies and find new ways to generate revenue.

For landlord, this is undoubtedly good news, the new system could lead to longer tenancies, reducing the frequency and costs associated with finding new tenants. With fewer vacancies and lower turnover rates, landlords might experience more consistent rental income and reduced expenditure on marketing and refurbishing properties between tenancies.

For letting agents, the path forward involves adaptation and innovation. The reliance on renewal fees has to be replaced by alternative revenue streams. Many agents might turn to offering enhanced property management services, such as comprehensive maintenance packages, advanced tenant screening, and more robust support for both tenants and landlords. By adding value in these areas, letting agents can justify service fees and maintain profitability.

Another potential strategy is for letting agents to develop new fee structures that reflect the ongoing nature of open-ended tenancies. This could include performance-based fees or service subscriptions that align with the long-term management of properties, thereby ensuring a steady income even without the traditional renewal fees.

Ultimately, the renters reform bill marks a significant turning point in the rental housing sector, challenging letting agents and landlords to innovate and adapt. The ending of fixed-term tenancies means no more renewal fees, ushering in an era of necessary evolution in the business practices of letting agents and landlords. As the market adjusts to these changes, the long-term effects of this historic legislation will become more apparent, shaping the future of renting for years to come.

Essential Tips for First-Time Property Investors

Investing in Property can be a lucrative venture, but for first-time property investors, navigating the market can seem daunting. With careful planning and informed decision-making, however, you can set yourself up for success. Here Property expert Julie Ford explains the 10 essential tips to help you make the most of your investment:

Define Your Goals: Before diving into the property market, take the time to define your investment goals. Are you looking for long-term rental income, quick returns through flipping properties, or a combination of both? Understanding your objectives will guide your investment strategy and help you make informed decisions along the way.

Research the Market: Conduct thorough research on different types of property investment, Analyse different property strategies, prices, rental rates, vacancy rates, and local economic indicators. Understanding market trends and dynamics will enable you to identify lucrative investment opportunities and mitigate risks.

Start Small: As a first-time investor, it's advisable to start small and gradually expand your portfolio as you gain experience and confidence. Consider investing in affordable properties that require minimal renovation or maintenance. Starting with a smaller investment allows you to learn the ropes without exposing yourself to excessive financial risk.

Build a Strong Team: Surround yourself with a team of professionals who can provide valuable guidance and expertise. This may include property agents, property managers, contractors, solicitors and accountants. A reliable team can help you navigate complex transactions, negotiate favourable deals, and maximise the profitability of your investments.

Perform Due Diligence: Before making any investment decision, conduct thorough due diligence on the property. Inspect the property for structural issues, assess its rental potential, understand the area demographic and if it will attract your chosen audience and review financial documents such as tax records and rental history. By conducting due diligence, you can identify any potential red flags and make informed investment decisions.

Understand Financing Options: Familiarise yourself with the various financing options available for investments, including traditional mortgages, private lenders, and bridging loans. Evaluate the pros and cons of each option and choose the one that best aligns with your financial situation and investment goals.

Have a Contingency Plan: Investing of any kind comes with its fair share of risks and uncertainties. It's essential to have a contingency plan in place to address unexpected challenges such as tenant turnover, property damage, or economic downturns. Maintaining a cash reserve and having access to additional financing can help you weather any storm that may arise.

Stay Educated: The real estate market is constantly evolving, so it's crucial to stay informed about industry trends, regulations, and best practices. Attend seminars, workshops, and networking events to expand your knowledge and stay ahead of the curve. Continuously educating yourself will empower you to make smarter investment decisions and adapt to changing market conditions.

Be Patient and Persistent: Property investing is usually a long-term endeavour that requires patience and persistence. It may take time to find the right investment opportunity and see significant returns on your investment. Stay focused on your goals, remain disciplined in your approach, and be prepared to ride out any challenges that come your way.

Monitor Your Investments: Once you've made an investment, don't set it and forget it. Regularly monitor the performance of your properties, track rental income and expenses, and make adjustments as needed. By staying proactive and responsive, you can optimise the profitability of your investments and ensure long-term success.

First-time property investors can set themselves up for success by following these essential tips. By defining your goals, researching the market, starting small, building a strong team, performing due diligence, understanding financing options, having a contingency plan, staying educated, being patient and persistent, and monitoring your investments, you can navigate the market with confidence and achieve your investment objectives.

Majority of Letting Agents Not Renters Reform Ready

The impending Renters Reform Bill is poised to usher in the most significant changes to the rental landscape in 30 years, particularly affecting letting agents, landlords, and tenants alike.

With assured shorthold tenancies (ASTs) set to be replaced by periodic assured tenancies, the onus is on letting agents to ensure smooth transitions for their clients.

However, recent indications suggest that a majority of letting agents are not adequately prepared for the impending reforms, raising concerns about the potential chaos that may ensue.

Letting agents play a pivotal role in facilitating rental agreements between landlords and tenants, offering valuable expertise and guidance throughout the process.

As such, they bear a responsibility to stay abreast of legislative changes that directly impact their operations and clientele.

The Renters Reform Bill represents a significant overhaul of existing tenancy structures, yet many agents appear to be lagging in readiness.

One of the key provisions of the Renters Reform Bill is the transition from assured shorthold tenancies (ASTs) to periodic assured tenancies.

This shift carries implications for both landlords and tenants in terms of rental terms, eviction procedures, and security of tenure.

It is imperative that letting agents proactively educate their clients about these changes and assist them in adapting to the new regulatory framework.

However, anecdotal evidence suggests that a substantial portion of letting agents are not adequately preparing for the impending reforms.

This lack of readiness is concerning, as it may lead to confusion, disputes, and potential legal ramifications for both landlords and tenants.

Without proper guidance from knowledgeable professionals, landlords may unwittingly run afoul of new regulations, while tenants may find themselves ill-equipped to navigate the evolving rental landscape.

So, why are many letting agents failing to take the Renters Reform Bill seriously?

There could be several factors at play. Some agents may be unaware of the full extent of the reforms or may underestimate their impact on their day-to-day operations.

Others may be preoccupied with existing workload or may simply be procrastinating in addressing the impending changes.

Whatever the reasons, the consequences of unpreparedness could be severe for all parties involved.

In light of these concerns, it is imperative that letting agents prioritise readiness for the Renters Reform Bill without delay.

This includes staying informed about the latest developments, communicating effectively with landlords and tenants, and providing proactive guidance on compliance and best practices.

By taking a proactive approach to adaptation, letting agents can mitigate risks, enhance client satisfaction, and uphold professional standards in an evolving rental landscape.

As the deadline for implementation looms closer, letting agents must take heed and take proactive steps to ensure smooth transitions for their clients.

Failure to do so may result in chaos, confusion, and legal issues that could have been otherwise avoided.

The Growing Savings Gap: Implications for Homeownership in the UK

A recent report from the Resolution Foundation and the abrdn Financial Fairness Trust sheds light on a concerning trend in the UK: a significant portion of working-age households lack adequate savings, with access to less than £1000. This finding underscores the stark reality that many individuals and families are ill-prepared for financial emergencies and retirement.

Property expert Julie Ford looks at the growing savings gap and how it is effecting homeownership

The report's estimation of a £74 billion shortfall in emergency and retirement savings highlights the magnitude of the problem. If each household had a minimum of three months’ salary saved, this deficit wouldn't exist. However, the current situation leaves many vulnerable to unforeseen expenses and struggles in retirement.

One area profoundly affected by this savings gap is homeownership. With insufficient savings, individuals find it challenging to accumulate the necessary funds for a property deposit. As a result, the dream of owning a home becomes increasingly elusive, particularly for younger generations.

The average age of a first-time buyer in the UK has risen to 38, reflecting the hurdles faced by aspiring homeowners. This delay in purchasing a property has wide-ranging implications, both socially and economically. Delayed homeownership impacts household formation, family planning decisions, and overall financial stability.

The inability to save adequately not only prolongs the renting phase but also hampers wealth accumulation through property ownership. Homeownership has long been considered a cornerstone of financial security, providing stability and a source of wealth accumulation over time. However, without sufficient savings to make a down payment, this avenue to financial stability remains out of reach for many.

Furthermore, the ripple effects of delayed homeownership extend beyond individual households. The housing market experiences decreased demand from first-time buyers, potentially leading to stagnation or decline in property prices. This, in turn, affects housing affordability for future generations and contributes to widening wealth inequality.

Addressing the savings gap and promoting financial resilience among households is crucial for fostering a more inclusive society and ensuring economic stability. Policymakers, financial institutions, and employers must collaborate to develop strategies that encourage saving, promote financial literacy, and expand access to affordable housing.

In conclusion, the findings of the Resolution Foundation and abrdn Financial Fairness Trust report underscore the urgent need to address the savings gap in the UK. 

Without concerted efforts to boost savings and improve financial security, the dream of homeownership will remain out of reach for many, perpetuating socioeconomic disparities and hindering overall economic prosperity.

Why older tenants make the best business sense

Recent Government data indicates a significant rise in households aged between 45 and 64 entering the private rental sector, with a 70% surge over the past decade.

Similarly, those over 65 have shown a 38% increase in joining this sector.

Landlords welcome this trend, as older tenants are perceived as more likely to stay longer, with 65% opting for longer tenancies compared to younger tenants.

This results in greater stability in occupancy and fewer rental vacancies.

Property Expert Julie Ford explores why the rise in older tenants is great for landlords and local communities.

The research already shows that older tenants tend to have more stable lifestyles, with steady incomes and fewer life changes that could prompt frequent moves.

This means they are more likely to remain in a property long term, minimising void periods and providing landlords with a more predictable rental income and reducing the frequency of turnover.

Older tenants are often more responsible and reliable when it comes to paying rent on time and taking care of the property, having the potential to be more hands on with everyday maintenance, as they have a vested interest in maintaining a comfortable living environment for themselves. keeping the property in good condition and the landlord’s cost low.  

Older tenants are less likely to engage in loud or disruptive behaviour, contributing to a peaceful living environment for other tenants and neighbours, as well as being more community focused.

Overall, these factors make older tenants appealing to landlords seeking stable, low-maintenance rental arrangements.

To accommodate this demographic shift, a recent study by Paragon reveals that 46% of landlords are open to investing in property modifications to better suit the needs of older tenants.

Renters don’t want Reform, have the Government taken their eye of the ball?

The housing crisis is at the forefront of the nation's concerns.

Recent survey results from Spareroom have sent a clear message:.

With a staggering 85% of those surveyed prioritising it above other pressing issues such as the cost of living and healthcare, it's evident that action is long overdue.

The statistics paint a stark picture: over 4.6m of UK households in private renting, amplifying the urgency for solutions.

As the country braces for an upcoming general election within the next year, the spotlight on housing policy intensifies.

What do renters want to see from the government?

The survey highlights key demands, notably the introduction of rent caps, utilising empty properties, and prioritising residential supply over second homes.

This concern for rising rents was echoed by listeners of the Martin Lewis podcast, who were asked to send in their questions for a special renters edition with Property Expert Julie Ford.

The overriding questions all focused on rent increases whether the landlord had a limit they can increase the rent by or how to challenge an unaffordable increase.

Rent rises are top of the concerns for rents and voters alike 

These worries underscore the need for immediate action to alleviate the strain on renters nationwide.

However, amidst these pressing concerns, there's a disconnect with the focus of certain tenant lobby groups.

While some advocate for the removal of section 21 and unsecured periodic tenancies, the survey suggests a misalignment with renters' priorities. Could the government be swayed by minority voices, overlooking the broader consensus revealed in the survey?

The urgency is compounded by the sluggish progress of the Renters Reform Bill. Hindered by over 200 amendments during its third reading, the bill's journey through Parliament has been painstakingly slow.

This delay, coupled with the staggering turnover of housing ministers since 2010, reflects a lack of continuity and focus in addressing the crisis.

With an average tenure of just 11 months, housing ministers have struggled to leave a lasting impact.

The survey's revelation that only 16% of respondents could name the current Housing Minister speaks volumes about the instability within the department.

Amidst this turmoil, Jacob Young MP emerges as a beacon of advocacy for the Renters Reform Bill, while Housing Minister Lee Rowley MP remains relatively obscure.

This disparity raises questions about leadership and commitment within the government's housing agenda.

As the nation grapples with the housing crisis, there's an urgent call for decisive action.

Renters' concerns cannot afford to be sidelined any longer.

It is time for the government to listen, prioritise, and deliver meaningful solutions to ensure affordable and sustainable housing for all.

Tents in a mid-terrance

We have all heard of Beds in Sheds, well now we have Tents in a mid-terrace

An Airbnb listing offering an unconventional stay experience inside a London flat has sparked renewed attention after being re-listed, now priced at £80 per night.

The initial uproar in January, which led to the removal of the listing, highlighted the shockingly high cost of living in London's rental market.

Originally priced at £68 per night, the tent stay went viral for all the wrong reasons, showcasing the stark reality of London's housing affordability crisis. Now, with the relisting, guests will need to shell out a staggering £2,240 for a month-long stay, including service fees.

The updated listing provides a more realistic portrayal of the accommodation, cautioning guests about noise levels in the bustling Chinatown area and advising them to bring earplugs.

While security measures are in place, including exterior cameras, there are none inside the tents themselves.

However, despite the increased price and adjustments to the listing, guests still face an additional £14 Airbnb service fee per booking, further inflating the cost.

Reviews from the initial listing were mixed, with praise for the convenient location and responsive host, yet the unconventional nature of the stay divided opinion.

Despite this, the Airbnb managed to maintain an average rating of 4.45 stars. The new listing has already garnered one five-star review, signaling continued interest despite the controversy.

Interestingly, the host has downsized the offering, now accommodating only two tents in the living room instead of three.

This reduction in available space could potentially explain the higher price point for the revised listing.

As the debate around affordable housing in London continues, this Airbnb listing serves as a stark reminder of the challenges faced by both residents and visitors in navigating the city's rental market.

And may also go some way to explain why former landlords in the private sector would cross the threshold to Airbnb, with minimal regulation and a guarantee you can remove an unwanted guest immediately, this way of renting is looking more and more appealing.