Christmas comes early for buy to let landlords
A court ruling today has breathed new life into the buy to let sector and opened up the potential for compensation claims which could top £20 million. The case against Foxtons, the well-known London letting agency, resulted in Mr Justice Mann ruling that the company overcharged commission to landlords. Indeed the judge went on to describe Foxtons agreements as "traps and timebombs" which could prove very costly in the future.
The company had a number of commission charges in place which included 11% commission when a tenant occupied a properly for longer than the initial lease and a 2.5% commission if a tenant acquired the company from the owner. As a result of the ruling, buy to let landlords will be able to reclaim excessive commission charges going back 14 years on existing contracts. To put this into context, a two-bedroom property costing £15,000 a year to rent would have seen Foxtons receive £1,650 a year in commission. Under the terms of the judgement the landlord would be able to reclaim around £23,000.
When you consider that many other letting agencies use similar commission scales to Foxtons then the 1 million buy to let landlords in the UK could be able to reclaim around £20 million in total. For many buy to let landlords struggling amidst the ongoing recession this could not have come at a better time.
Share this..
Related stories
George Osborne announces further £4 billion benefit cuts
George Osborne, the Chancellor of the Exchequer, has released plans for a further £4 billion reduction in benefit payments in the UK amid protests from opposition parties and anti-poverty campaigns. This £4 billion reduction plan is on top of the previously announced £11 billion reduction in UK benefits and despite assertions that these benefit payment cuts will only impact those "not intereste...
Read MoreMP committee looks at North sea oil exploration
In light of the Gulf of Mexico disaster a committee of MPs will review the UK government's decision to ignore calls for a moratorium on new drilling exploration in the North sea. While there is no doubt that lessons need to be learned from the Gulf of Mexico problem, which has seen the BP share price collapse, many believe that safety measures in place in the North sea are more than adequate for t...
Read MoreHBOS in talks with Lloyds Bank about a merger
News is breaking, unofficially, that HBOS is in advanced talks with Lloyds Bank about merging the operations of the two UK giants. While the HBOS share price continues to fall - hitting a sub-£1 level earlier today - it seems as though things may be happening behind the scenes. A takeout price of £3 a share is being mooted but whether this price is still 'good to go' after the recent fall rema...
Read MoreIs the UK car manufacturing industry on the brink of collapse?
Amid claims that one of the U.K.'s largest car manufacturing plants is on the verge of collapse, the Unite union has today stepped in to try and pressurise the UK government into forwarding a life-saving rescue package. While the union has refused to name the plant at risk it has confirmed that upwards of 6000 jobs are potentially at risk. This is a direct consequence of the collapse in the UK car...
Read MoreLloyds Bank raises £800 million in share placing
In a move which smacks of opportunism it has been revealed that Lloyds Bank has placed around 284 million new shares with institutional investors raising an impressive £800 million in just 3 hours. However, the group has been stung by suggestions that the sudden bounce in banking shares last week has given the group a very small window in which to raise the funds with the long term scenario in t...
Read More