Newsletter News

 Quite a lot to be aware of this month - a range of events that may be of interest, an extra 10% off at Tradepoint plus other opportunities to take advantage of your membership.

Since the Consultation finished 2 months ago, the stony silence on the subject of Licensing smaller HMO's in Portsmouth has been almost relaxing – no worries about unachievable kitchen widths, whether the alcove by the door is counted as part of the room or not, where the washing machine is in relation to sleeping rooms – the absence of all that nonsense has been bliss.

But it will not last…. 

Some members may avoid our breakfast meetings, assuming we all sit around bemoaning the latest tax or regulatory changes but reality could not be further from the truth. This month we were entertained with the tale of the naked young female tenant, a policeman and as many DIY disasters as you can imagine. Read on for the full story….  

I find it mildly amusing that over the past decade, as each new regulation made life harder for landlords or increased their costs, there was never any outcry from tenants on behalf of their landlords.

Yet at this months member meeting, we had 70+ attendees incensed at the impact disaggregation would have on their tenants – with calls for us to talk to MP's , start a Judicial Review, appeal and much else. Everyone agreed it is not fair, it does not make sense and it will impact those tenants least able to afford it – it is in effect a poll tax on the poorest in our society.

But when you step back, you can argue it both ways. Which side are you on? 

 Ever advertised a single room and had someone ask if they can have it for their family of 3? Ever let a room to one person and then found it occupied by 2 or more? What do you do? What if you have an HMO Licence which will be breached? Sadly, what was rare is no longer. 

Since the Tories (rather strange) non-budget last week landlords have been worrying about affordability of mortgages as many existing products are pulled from the market. 

The PDPLA as members of the policy advisory board to the NRLA, have jointly signed a letter to the new Housing Secretary calling out concerns with the current proposals to reform the private rental sector. With the typical tenure for a housing minister being 10 months, it is not surprising the sector is in chaos and policies are constantly changing.

This is our attempt (one of many) to make things better for landlords in the private sector.

People tend to forget the H in HMO may stand for house but it is also a home for thousands in the city – Harry is one of those people. Approaching retirement, he had worked hard and had a good life but was watching his outgoings as you do at that age, determined to cut his cloth accordingly. He found himself in Alwin's office discussing what was available in his price range and reluctantly agreed to take a room in an HMO until something better came up.

That was over 30 years ago. Harry is still there and sadly, is dying, but with the help of his housemates – he wants to die in his HMO home. 

We have long said that licensing schemes drive up rents and councillors and council staff have always refused to accept it. The challenge has been to prove a direct correlation between licensing schemes and rent levels given there are so many variables, and also, the effect of a change is not always immediate, so causality is always an issue.

Finally, we have a specific change which can be shown to have had a direct impact on rents – licensing in Portsmouth has increased rents 3x faster than elsewhere, and we can prove it!  What is worse, it directly and negatively affects those most in need. 

One perhaps unforeseen consequence of licensing all HMOs is that many landlords and tenants will require licenses but will be totally oblivious of this requirement. They will be committing an offence in ignorance.

In a letter to the Portsmouth daily paper, The News, Councillor Cal Corkery argued for city-wide licensing for every property rented in the private sector.

Read on to see our response 

We always said that the 'Build them and they will come' mentality of the REITs (Real Estate Investment Trusts) could not work – given the stratospheric rents these places need to charge to make money. Now it seems, the owners are looking for new ways to fill these buildings as they cannot find enough students able to afford £700 a month for a tiny room unsuited to anything else.  

Well it is obvious we would not vote for it - but it is not the extra regulation, cost or bureaucracy that we are objecting to, it is the fact that the current proposals will make 1,000-1,500 people homeless and the impact on the city and across the council, in terms of rehousing the most vulnerable, the burden on Adult Social Care and many other groups, as well as the impact on local rents and house prices cannot be justified by this action.

2,600 - of which over 1,200 are already licensed and the remainder are small ones. Not 6,000 as estimated by the council, or 4,271 as reported by the council, or 2,801 as licensed by the council last time they did Licensing. No, just 2,600 - so what is all the fuss about (that is about 1 property in every 40).

Exactly 10 years ago, we sent a letter to the then leader of Portsmouth Council, copying the Cabinet Member responsible for Housing, outlining our doubts about the need to introduce Additional Licensing and why we did not think it would work.

Here we are, same council leader, same Housing Cabinet Member (in their defence there have been others in between), same concerns about the proposal to introduce Additional Licensing.  Read what we said then and judge whether we were right.... 

 As part of our response to the consultation on Additional Licensing, we asked our Vice Chair, local landlord and long established letting agent, Alwin Oliver to outline the economics of HMO's from the perspective of the tenant, the landlord and the city – as we are convinced everyone just assumes we are making huge profits at the expense of all around. We were not surprised to see Alwin's analysis prove this to be untrue – we knew that already – but what did surprise us was the fact that if Additional Licencing drives the smaller HMOs and landlords out of the market, the median renter will now find him or herself in a much more expensive 'Super HMO' which is why we believe the median rents will rise 50%.

Don't believe us? Then read on and Alwin will explain….

The long-awaited renters reform bill was finally published this month with much discussion of the extension of the Decent Homes Standard to the Private Rental Sector, the banning of Section 21 'No fault' evictions and the much needed tightening of rules for social housing landlords.

Portsmouth's stringent standards for HMO's have already caused a local affordable housing shortage – shown both by rents increasing faster locally than elsewhere and the slower rate of population growth. 

This trend looks to be taking a turn for the worse as, based on our estimates and initial feedback from members, we expect proposed increases in the standards expected of HMOs to take at least 1,000 rooms out of circulation in the city – further pushing up rents and increasing homelessness for those at the very bottom of the ladder.

 With Portsmouth creating a self-induced homelessness crisis and threatening to remove over 1,000 HMO rooms (see our HMO Standards article) and demand for shared accommodation higher than it has ever been, we are predicting HMO median rents to rise 45%. (See our 'Economics of HMO's' paper for full explanation).

The trouble is, if you want to cash in on this you will find it hard to create an HMO which meets the city's rules – so this article explains 4 simple ways to completely legally create an HMO to ensure you can benefit from this growing market.

Former electrician and local landlord, Graham Castellano has highlighted a change in electrical regulations which will hit HMO landlords initially and all landlords eventually. 

If you are an HMO landlord with an EICR due in the next 6-9 months, it is worth getting it done before the end of September.   If you are a Social Housing landlord - no need to worry - there is no legal requirement for you to check electrical installations in your property...

Many of you will be familiar with the 'Couch to 5k' apps and training schedules which get you from 'couch potato' to competent runner able to complete a 5k run, well our own Matt Hinks has a variation on that having progressed from an ICU bed in the Queen Alexandra Hospital Portsmouth to having raised £2,000 to help with critical care funding. 

Two cases that have come across my desk this month have highlighted the potential pitfalls of rent to rent (or guaranteed rent). They make grim reading for landlords, councillors and enforcement officers. All of us would do well to understand how rent to rent works so that if it goes wrong, the right people are identified for enforcement. For landlords it is also important to make informed and wise decisions about management of our assets. They also serve to highlight the jaw dropping complexity of law, redress and enforcement when or if- the landlord themselves is the victim of sharp practice (or worse). 

Rent to Rent feels like a very dirty word in the world of property investing.

Unfortunately, it is seen by many as an easy low cost or "No Money Down" entry point into property investment. This is certainly not the case.

I have been running a Successful Rent to Rent portfolio in Southsea for coming up to four years now and I wanted to give an insight into how it works for both myself and the landlords that I work with. I am very pleased to say that every landlord that I have worked with so far at the end of the initial three year term has been happy renew onto another long term agreement. 

Reproducing this NRLA blog item here from 'London Property Licensing' as it clearly describes the processes to be followed and the hurdles passed when introducing Additional Licensing. 

Portsmouth have announced their consultation on Additional Licensing which runs until the end of July. If you have properties in the city, we recommend you respond and over the next few weeks we will be sharing full details on what is proposed and what we believe are the implications. Read on for details of Council organised 'drop-in' sessions 

 After this months Portsmouth Council Planning Committee meeting, the answer to that question is easy – but whether to be a local councillor is a much harder one to answer.

Should we praise our public spirited citizens who put themselves forward to represent the people they live among and who endured 6 hours of debate on whether 12 HMO applications were to be approved or not, or should we be asking why they chose to start this process and override the advice of planning officials and ignore the view of planning inspectors in the first place?

Unlike your MoT, gas safety certificates last 1 year from when they are issued - so if you get the checks done a week before they are due (always wise in case there is an issue or delay), then your renewal date will come forward by 1 week each year. Annoying for student landlords who try to get it all done during the void period of August and more expensive than it needs to be if you need to renew every 51 weeks instead of 52.

The good news is  the HSE has seen sense and brought it into line with other testing - you can now renew ahead of your renewal date while preserving that date, so you get 52 weeks usage for your money.

This article copied from Landlord Zone - see the original here:  Portsmouth landlords vow to fight 'ridiculous' plans to widen licensing for HMOs (landlordzone.co.uk)

Matt Hinks, PDPLA member and local landlord is going for a walk and wants payment for doing it!

But the good news is that it is all for a good cause - he is walking around Portsea Island on 30th May to raise money for the critical care unit at QA where he was in a coma last year... 

Update: Walk successfully completed, over £1,900 raised,  not too late to give, lets get Matt past £2,000...

We have reported a number of times in the past about 'disaggregation' – whereby individual units within a property are each charged council tax separately. So, for example, a 7-bed HMO might be charged a Band D council tax charge as a single dwelling but increasingly, they are being re-banded and billed as 7 individual Band A properties.  

Prior to the Homelessness Reduction Act 2017 Local Authorities (LAs) would routinely say that a tenant who left a property before the bailiff arrived had made themselves homeless and thus they would be relieved of their statutory duty to assist. That should no longer happen and the LA should step in as soon as the Section 21 is served, but does it happen?

The PDPLA list of recommended suppliers is one of our most popular member benefits – only local landlords can recommend suppliers and members rate and recommend individuals and companies, so when looking for a trader or supplier you know that if they are on the list, it is not because we make money from them or they pay to be there – a PDPLA recommended supplier is only recommended if a PDPLA member has had a good experience using them.

This month we have a new supplier for solar PV installations, for EV (electric vehicle) charging points and for battery storage solutions plus we have added Digital Home (an omission on our part) and highlight several others.

The March Housing Cabinet saw the price of an HMO licence hiked by 30% to £1,150 – the highest in the south of England.  

Views within the PDPLA have been split – there are those who argue vehemently that we need a mediation option to avoid the high cost associated with obtaining an eviction and those who say it is a nice idea, but how could it work when the relationship has reached a stage where eviction is inevitable and anyway, it can never be a relationship between equals, so how could it work?

Well – the good news is that the proof is in the pudding and so far, it does appear to be working. The pilot, initiated by our own Alwin Oliver working with Portsmouth Mediation Service and latterly, PCC, appears to be bearing fruit.

 When the Article 4 Direction was introduced in Portsmouth 12 years ago, we recommended that members with smaller HMOs change the planning status of their properties to mixed use (known as C3/C4) so that they could switch between family lets and HMO letting without breaking the rules. Those C3/C4 approvals were only for 10 years (though many were not told so at the time) – but now, when owners come to renew, many are getting confused as you need to apply for planning permission to change from 'mixed use C3/C4' to 'mixed use C3/C4' which appears illogical.

Many new PDPLA properties have signed up for the exclusive Digital Home 'landlord deal' in the past few weeks - do consider it if the network is now available at any of your properties, we only need a few more to reach our target.  

You pay stamp duty when you buy a house - so we were really surprised when PDPLA member, Debra Chappelow, pointed out a little known rule which means long term tenants may be liable to pay stamp duty. 

Members have long bemoaned the fact they feel like criminals when they receive a letter from the housing team at PCC and this is something we have raised on their behalf regularly since at least 2012.

Well, the new team at Private Sector Housing appear to be listening and have started a process of updating the standard communications to ensure that whilst they still convey the appropriate legal warnings, they are worded in a less threatening style. Well done PCC. 

The Government has given local authorities special funding to keep tenants in their homes where their circumstances have changed and they are struggling to pay the rent. Portsmouth City Council still has some of this funding available for this financial year. The application for assistance needs to be made by the tenant but can be supported by their landlord.

 Following on from the 'Heads For Tails' briefing paper we shared last August (see it here), members are asked to complete a short survey. Read more for full details.

We were recently asked by a student why a landlord may not have provided an invoice/receipt for a deposit deduction, in order to justify that deduction

It is a good question and the answer deserves some consideration. 

There were positive signs at the January Committee meeting. Two applications for new HMOs were granted permission without the usual hunt for excuses to refuse. Sadly, there is no change of heart, we do not know of any Councillors happy to see new HMOs being created. With so much anti HMO feeling amongst the electorate this is perhaps understandable though very frustrating for us, whilst leaving usable rooms empty and pushing up rents and property prices for all.  

 Do you struggle getting the correct student exemptions from council tax for your Portsmouth properties? This has been a perennial issue for many members but now PCC have a new system which may help. We did invite them to come and explain it, but they declined so PDPLA member, Karen Silman has drafted this simple guide and PCC also sent some guidance on entitlement to discount and exemption.

  Most people will have seen the TV and news coverage of the problems at Windsor House. Water running down walls, damp, mould and other conditions which no one should have to live with. Portsmouth Labour Housing lead Councillor Cal Corkery wrote to The News suggesting that the solution would be to introduce landlord licences for all rented properties in the city and as a result avoid problems such as this.

In subsequent days, there were a flurry of letters in response on both sides of the argument – read on for a summary.

  Local rents are rising much faster than official figures would suggest. Read on to find out how much they are rising and for whom exactly.

As a local landlord association, our primary aim is to educate and inform local landlords to help them ensure they meet all of the necessary regulations and offer homes that are safe and comfortable for those who live in them.

However, many of us occasionally come across properties that we would be ashamed to let if they were ours.  If it were to belong to a fellow member, we would hope to be able to help them understand what they need to do - but typically it is not. What can you do about those landlords who have no regard for their tenants, spend no money on their properties and get us all a bad name and also, who would never consider joining a local or national association? We finally have an answer...

If you are of a mind to respond, amongst the plethora of requests for your input, there are a number of surveys this month which you probably need to be aware of…..

One which we believe is a wasted opportunity and which will not produce any usable results comes from Portsmouth City Council and one which we recommend you do complete from the Department of Levelling UP, Housing and Communities which is probably worth the effort but it is a little lengthy. Then there is the PCC 'Health & Wellbeing Strategy' and of course, the quarterly NRLA one which is always worth completing as it helps build a comparative dataset over a period of years.

Members will be pleased to hear that we have bought an infrared camera which any member can borrow to check the energy (thermal) efficiency of their properties. We will operate the scheme using the same format as our PAT (Portable Appliance Testing) equipment.