BREAKING PROPERTY NEWS – 06/10/2021
Daily bite-sized proptech and real estate news in partnership with Proptech-X. Today, Stanton looks at the recent RICS apology, the revelations surrounding the Pandora Papers, and Propertymark’s stance on PRS landlords
- RICS continues in its old ways despite promise to reform
- What do The Pandora Papers tell us about the HMRC and super wealthy?
- Propertymark puts its full weight behind the endangered PRS landlord
RICS continues in its old ways despite promise to reform
RICS’s recent humiliation of an external review by two QCs – the first ejected and the second Alison Levitt QC – made plain that the now ex-CEO was running the show and sitting on problems, and there was a schism between internal factions.
As part of the healing process, the four wronged NEDs who were forcibly removed from RICS when they dared to push for oversight were issued an apology by the RICS Governing Council.
Instead, salt was poured into the wound by placing the formal apology to the wronged four on the official RICS website, alongside wording that expressed the appreciation by RICS for the work carried out by Sean Tompkins, the ex-CEO who was let go together with Chris Brooke and Kathleen Fontana.
The NEDs have let their displeasure be known, releasing the following statement:
“We are relieved this matter has finally reached a welcome outcome for us with the publication of RICS’s formal apology. We have endured a prolonged, difficult, and stressful period since the issues within RICS first came to our attention in late 2018. Our focus – both then and now – was to discharge our responsibilities to the best of our abilities and to do the right thing for the Institution we had been appointed to serve.
The apology from the Interim Chair of Governing Council is an important first step. It is, however, difficult to accept it as a statement of genuine contrition from those responsible when the apology appears on RICS’s own website alongside the expressions of thanks from the Chair contained in the resignation statements of Sean Tompkins, Kathleen Fontana, and Chris Brooke, each of whom left office following publication of Alison Levitt QC’s report.
We fully support the Institution’s commitment to consistently embed its recently published values – including those of integrity and transparency. As part of the process of re-establishing trust and confidence, these standards should be applied to all officers, members, and external advisors in relation to past conduct, as well as in the future.”
If you log onto the RICS site you are welcomed by the wording, “RICS delivers confidence through respected global standards, adopted and enforced by over 134,000 qualified and trainee professionals across the built and natural environment.”
My thoughts on this are that words are cheap, actions speak volumes.
Those who did wrong knowingly orchestrating strategies to oust honest, decent people who dared to be whistleblowers. They must and should be brought to account, rather than apparently slipping away remunerated in full with a pat on the back.
What do The Pandora Papers tell us about the HMRC and super wealthy?
The Pandora Papers have revealed that, amongst other things, a lot of ultra-high net worth individuals have been buying property assets in the UK, doing so using company structures. Given that any entity buying property, commercial or residential, has to declare the source of the capital used in the purchase, this blatant manipulation of rules brings into focus some interesting topics.
The first is that solicitors have a duty to report anything that is suspicious. They have a legal obligation to report anything that is not correct or seems in any way out of the ordinary. If they get this wrong, they face unlimited fines and or imprisonment.
In the UK, to safeguard all law-abiding citizens from the wrongdoings of individuals, we have anti-money laundering legislation underpinned by the Proceeds of Crime Act 2002, Terrorism Act, and Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. Though we’ve gone through Brexit, we are still bound to follow through on these.
Now it will be up to the legal sector to determine if anyone has fallen foul of the Proceeds of Crime Act, and it may well decide separately that setting up shell companies outside of the UK to avoid paying SDLT, like Tony and Cherie Blair’s saving of £312,000 as revealed by the Pandora Papers, is an acceptable tax loophole.
But given that the UK is facing austerity caused by Brexit and the pandemic, and we are collectively being asked to tighten our belts and pay more tax, is it not high time that HMRC was seen to be looking at any transaction over £1 million with the greatest of scrutiny?
After all, every transaction is registered at Her Majesty’s Land Registry, and it is not beyond modern software to deduce the real ownership back from a company called “Mimi Bikini” to its actual owner who may be a high-ranking member of state in some part of the globe.
Also, where do the solicitors, the agents, and the banks stand in all of this? Having £24 million passing through bank accounts means that banks are also culpable if it is a transaction based on fraudulent activity.
The HMRC seems to be turning a blind eye when the ultra-high net worth individuals are looking to buy property assets in the UK, which again does little to make me feel warm inside when disco diva Michael Gove talks of levelling up.
Maybe it is time Gove and others in the cabinet grew up and stopped cosying up to the rich, and realise that the primary function of government is to help get new laws in place that are then rigidly adhered to for the betterment of all, rather than the privileged few.
Propertymark puts its full weight behind the endangered PRS landlord
Propertymark has broken rank and rigidly stated that it backs the plight of landlords in the private residential sector, who are being taxed and regulated out of existence. But most immediately are taking the brunt of the rent arrears caused by the pandemic.
Mark Hayward, policy adviser for the organisation, commented: “The PRS supports five-million households in the UK and is an important provider of homes against a backdrop of an overwhelmed social housing system … at the moment, the risks associated with being a landlord are incredibly high and the financial help for tenants and landlords struggling under the weight of accumulated Covid-related debt is inadequate.”
Though there are no verified figures it is thought that over 500,000 tenancies are in arrears at present, which could scale up to over 750,000 by the end of the year.
Propertymark is lobbying the government to think carefully about a mechanism such as a loan scheme to stop a mass exodus of private landlords, many of whom only own one investment property used as a way of generating income or as part of a pension strategy.
If there is a sudden move by landlords to divest themselves of rental properties which then pass into the general housing stock, this will bring even greater pressure on the government who are already behind in the social housing programme.
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