Foxtons prevented from using specific terms by High Court order

UK business insolvencies at their lowest since June 2007

New homes built in England fall 17% in 2009

London office rents set to rise further in 2010

Heathrow third runway and Crossrail to boost UK economy

The Office of Fair Trading (OFT) has obtained a final High Court order which prevents Foxtons Ltd from using specific terms in its letting agreements with consumer landlords and relate to sales and commissions.

The High Court ruled that Foxtons’ renewal commission terms were not transparent enough to consumers, and represented a trap and were therefore unfair. It ordered that Foxtons may not rely on these terms except where they remain instructed to manage the property.

Ian Potter, operations manager of Association of Residential Letting Agents (ARLA), said: "We expect all ARLA members to abide by a Code of Practice, which binds them to ensure that all fees and charges are made clear. In addition, we expect the Government's proposals for the regulation of agents to further augment our work in this area.

"The letting of a residential property is, by its nature, a complex transaction centred on the emotive subject of people's homes. Hence it is vital that agents maintain clear and transparent communications with consumers throughout the process. We would encourage landlords and tenants to only choose ARLA members, who are subject to a consumer complaint scheme if the code is proved to have been broken."

The Order also declared that the following terms are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords.

Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation.

Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant.

Foxtons has subsequently had to make significant changes to its standard contract with landlords as a result, including making the liability to pay renewal commission more transparent, reducing the commission payable on renewal, and limiting it to two renewals.

Jason Freeman, legal director of OFT's Consumer Group, said: “We welcome the finality brought by this Order, and the court's declaration that the terms we challenged are indeed unfair.

“This case, and the changes Foxtons has now made, sends a wider message to letting agents and businesses in general that important terms, particularly those which may disadvantage consumers, must be clear, prominent and actively brought to people's attention. Consumers should not be presented with a surprise bill for services they have not consciously agreed to.”

The OFT will continue to monitor whether this contract operates fairly under the UTCCRs.

UK business insolvencies at their lowest since June 2007

Business insolvencies in the UK have hit their lowest point since June 2007 as the financial strength of businesses improved 8% year-on-year in January 2010, according to Experian.

The rate of insolvencies fell to 0.07% in January 2010, as only seven in every 10,000 businesses went under. This compares to an insolvency rate of 0.09% in January 2009 and 0.11% in December 2009.

Rolf Hickmann, managing director of pH, an Experian company, said: “It’s encouraging to discover that not since the current financial crunch started have so few firms become insolvent in a single month. Whilst it is too early to predict whether we are fully out of the woods, this does hint at an improvement in the health of UK businesses, something which is reinforced by the financial strength view provided by January’s data.”

Businesses in the South West continued to be the most robust, holding the best financial strength score during January 2010 whilst those in the Yorkshire witnessed the highest rate of failures at 0.13%.

The North East saw its insolvency rate decrease by over 30% from 0.19% to 0.12% in January, as it lost its position as the region with the highest rate.

New homes built in England fall 17% in 2009

Housing completions in England fell by -17% in 2009 to the lowest total since 1946 with just 118,000 homes built, according to figures released by the Government.

A spokesperson from the House Builders Federation, told PIN: "There are two key constraints to housing provision. In the short term housing supply is being constrained largely by a lack of mortgage availability. Builders can only build if there is a market, and until we see some sensible levels of lending return supply will be impacted. Private housing and affordable housing delivery is now so inextricably linked both are being reduced by the lack of mortgage availability.

"In the longer terms we need to sort out the issue of land. Simply speaking, not enough land is coming through the planning system for the homes we need to build. We need to be supplying more developable land in places where people want to live."

In 2007, Prime Minister Gordon Brown announced plans to build two million new homes by 2016, the equivalent of 240,000 a year, however the peak number of homes built was 168,140 in the year to March 2008.

A spokesperson for the DCLG, said: “Today’s statistics show that these are still tough times for the building industry, and that Government support is as important as ever,

“That’s why we are investing £7.5bn in housing this year and next year to kick-start stalled developments, safeguard construction jobs and help deliver the new homes this country needs.”

London office rents set to rise further in 2010

London office rental values will rise further in 2010 according to Capital Economics, however it expects that the IPD all-property average will fall by -3%, significantly less than the -8% decline in 2009.

Although rental values fell in January 2010, it was only by -0.2%, which was the lowest figure since September 2008. Office take-ups did improve in central London as despite the overall fall, the City and West End sub-sectors saw increases of +0.2% and +0.3% respectively.

Retail rental values also decreased in January, however the falls slowed from -0.5% in December 2009 to -0.3%.

Gross domestic product (GDP) meanwhile is expected to grow by only +1% in 2010, mainly due to a subdued economy as public finances are in a poor state and retail sales have declined in January.

Heathrow third runway and Crossrail to boost UK economy

The UK economy would be boosted by £21.7bn if the third runway at Heathrow airport were to be built according to the British Chambers of Commerce (BCC).

The business group said that investment in key UK infrastructure projects must not be reduced despite tight public finances, with this being the single largest benefit from the 13 key transport projects that would boost the economy by £85bn.

Lord Adonis, UK transport secretary, said: "Even in tough economic times, we must continue to invest in vital transport infrastructure which benefits jobs, businesses, our economy and the environment."

Both the Labour and Conservative parties have stated that they would cut public spending in order to reduce the budget deficit.

David Frost, BCC’s director general, said: "Transport infrastructure cuts must not become a politically convenient way to slash spending after an election, especially when there are huge savings to be made in far larger budgets, including health, education and welfare.

"Cutting or scrapping plans for regional transport improvements means fewer jobs, and ultimately fewer businesses driving recovery."

The total cost of the infrastructure projects, including London's Crossrail train link, a third runway at Heathrow airport, as well as road and rail improvements, is estimated at £29.8bn by the BCC.

The public sector would contribute £3.1bn a year for five years, with the private sector making up the remaining £14.3bn.

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