Recent news items of interest to local landlords, use the search option above to find specific topics.
In last months newsletter we commented on the left over food from our Christmas party and how it was shared with homeless people on the streets of the city by several volunteer members who toured the city seeking them out. (And no, there have been no complaints about bearded landlords turning up in the middle of the night and waking people up, which shows all of our members abide by our code of conduct! :-) )
Subsequently there have been discussions about what to do with the monies raised from the raffle at that event, as in previous years some people have questioned how much the homeless benefited from our donations to charities active in this area. Our objective was to ensure that the money was 'well spent' and directly benefited those who most need it. One of our issues is that we lack the expertise to do something ourselves, but as a result we gained some interesting guidance...
Last year, Chris from Alliance Remedial Supplies came to one of our meetings to talk about damp and mould and his talk was very well received. With that in in mind, and it being that time of year again, we have invited him back to come and talk at our March meeting - so do come along, you will be guaranteed to learn something.
If you can't wait...
Ever since the 1st of the new aircraft carriers arrived in Portsmouth we have seen a huge upswing in requests for accommodation for contractors working on the carriers or related infrastructure. Much of this has been very positive for our members but there have been instances where issues have arisen.
It has also led to debates about what sort of contract should be used and how they can be enforced, whether properties are HMO"s and need to be licensed, etc. On the one hand we have had requests for 40 or 50 rooms for 6 months which have proved good for some landlords and on the other, we have examples of a similar number of rooms taken for the same period and then vacated after 3 months with payments stopped. In both examples we are faced with people looking for serviced accommodation at long term unfurnished let rates which is just not possible.
What can we do to minimise the risks?....
National letting agent Leaders send all of its landlords a monthly newsletter and we were intrigued to see that this month, according to Leaders, Waterlooville is the 'go to" destination for property investors around the country, so we checked some of the claims with some of our Waterlooville based members.
Here is what we found…
Many members know Lorna Eastwood from her time at PCC leading the HMO Licensing Team and other roles. She was at our last members meeting and her 'Property Consultancy' service was mentioned by Alwin, but many will not know she is also a co-owner and founder of Southsea Brewing Company.
For those of you who have commercial premises in your portfolio, see her request below:
With so many new student blocks opening or being built around 'Station Square" (soon to be renamed 'Student Central') is it time that we stopped worrying about all the minor details and ask the big question - will these new halls kill small business in Southsea? Could they be the death knell for the University itself?
Let"s get the minor details out of the way 1st….
In addition to the fact that we already provide homes for nearly half of the population of Portsmouth*, local landlords once again raised money for the homeless and took direct action after our Christmas party, distributing the leftover food from the hotel to people in need around the city. We also raised money on the night which we are making arrangements to ensure is used to provide food to the homeless by a local charity.
Comments from our distribution volunteers and more details…
At the recent meeting of the HMO Licensing Governance Board we learnt about the large number of empty properties currently in the city, the attempts to ensure student halls have to meet the same regulations as we do, enforcement action on another local letting agent and were warned to take rubbish disposal more seriously.
There were also discussions about what replaces HMO licensing next August…
Did you know that 75% of the high rise residential blocks in Hampshire can be found in Portsmouth? Did you also know that 85% of those blocks in Portsmouth are privately owned? And as new regulations post-Grenfell are created that could mean big problems for freeholders, landlords, leaseholders, tenants and service providers.
Some of the examples we heard at this months Additional (HMO) Licensing Governance Board meeting…..
If a visiting worker stays in your property for 12 months is it a tenancy? What if he booked and paid for it via Airbnb and has the 'holiday let" contract that service provides? What if he goes home to his main residence in say, Manchester, every weekend? And if he is sharing the property with 2 fellow workers does that make it an HMO?
There is no easy answer to any of these questions and different cities answer them differently. Short-term rentals in Greater London are subject to a planning restriction, which makes the use of residential premises as temporary sleeping accommodation a "material change of use" for which planning permission is required. New York are more stringent and state that owners or tenants cannot legally rent their apartments out for short periods (less than 30 days) unless they are also living in the property. Elsewhere, many rentals are expected to pay hotel or tourist taxes. In Portsmouth any issues have yet to result in regulatory changes but some people may be surprised by the existing regulations which already apply in this area…
Portsmouth City Council (PCC) has ignored our input (detailed last month here) and with immediate effect, introduce a range of measures to reduce the volume of HMO's in the city and to stop existing HMO's being improved and developed.
Deputations from our members highlighted concerns about the legitimacy of an immediate introduction, the damage the new space requirements will cause preventing HMOs sold or taken out of HMO use being replaced by new HMOs. Our survey showed the city would lose 100 current HMO rooms if the current 6.52 sq m proposal was implemented. This new legislation states a 7.5 sq m minimum room size - only on new applications - but it is hard to imagine the impact this would have if widely enforced and the increase in homelessness that is likely to result. But our deputations were to no avail as councillors were unanimous in their desire to see these changes pushed through.
For full details, read on...
Whilst we are pleased that Portsmouth was not in the vanguard of Universal Credit (UC) and Portsmouth and Cosham are now scheduled for 'ful service' from September 2018 and Gosport and Havant for November 2018, if you can see past the implementation problems it does have benefits..... (& thanks to Mark Sage at PCC for some of this information).
For example, for landlords who have been used to working with HB, one positive aspect of UC is that there won't be breaks in the claim that often happened under HB, when people moved in and out of work, and didn't always get their HB claims in on time. Also, it appears that those for whom direct payment is already in place will not need to be re-justified when they transition to UC.
The other improvement for landlords is a simple mechanism to recover rent arrears direct from benefits, which landlords can request at the same time as they apply for direct payments. (Not many landlords are currently recovering rent arrears from income benefit payments. But this is only available for arrears in a current tenancy, not a previous tenancy.) And rent arrears are recovered at quite a high rate, which helps to reduce arrears much more quickly, although that obviously impacts on the tenant's living costs budget.
At our last member meeting Jon McDermott talked about planning and several times, mentioned CIL payments and each time, someone asked what a CIL payment was….
This short article attempts to explain what they are and why they are so important.
In response to the campaign by certain councillors to reduce the spread or update of HMO's, we raised the following key points:
Last month we included the PDPLA response to the consulation on the Local Plan 'Issues and Options' document (see it here). In clarification, Councillor Luke Stubbs, deputy leader of PCC, responded: "Just a quick comment on the local plan and infrastructure. Much of what most people would include as infrastructure is outside of the control of local government (hospitals, doctors, new schools (although not the expansion of existing ones), the A27, railways) and so unless central government departments are willing to make commitments - and they're not - this cannot be considered in the local plan."
He went on to add,
Long standing PDPLA Committee Member Joan Goldenberg had this published in 'The News' (Portsmouth local paper) this month:
I am fed up listening to what awful people we landlords are and in particular the current campaign denigrating student landlords. How landlords have ruined Portsmouth bringing in students to the private residential areas, taken cheap housing away, overcharge and are the cause of traffic problems.
What landlords have actually done is buy dilapidated Victorian Houses, where the original residents made a jolly good profit, updated and improved them, from their own resources, and provided jobs for local businesses and business people and provided housing for students where there was none as the university numbers grew. Local builders, plasterers, painters, electricians, gas and central heating engineers, roofers were all kept busy and owe their living to the influx of landlords improving and providing much needed - but not only student - accommodation. Various industrial units have popped up, servicing the needs of these building trades.
The Upper Tribunal (UT) has held that insurance charges made by a landlord of a block of flats (the flats) were not payable by the tenants, as they were not "reasonably incurred". (This item shared with us by John Saulet of Saulet Townshend LLP)
A letter to The News from the PDPLA about the current debate over student and HMO densities in the city.
There have been several letters recently about HMO"s in the city. On one side, we appear to have LibDem councillors trying to rally residents behind their 'anti-student/anti-student housing" war cry and on the other, there have been some very good factual letters such as the one from George Langton pointing out that most houses in the city have always been shared and the other from Joan Goldenberg which succinctly summarised both the benefit to the city that we gain from the student population and also, the pressures and costs faced by the typical landlord without yet more regulation.
The average landlord has 4 houses and keeps them for 15 years. House prices historically, have doubled (before adjusting for inflation) every 10 years and today, the average house in the city costs £225,000.
That means an average landlord who decides to sell his portfolio today, probably bought the houses just after the millennium and paid just under £100,000 each. So, for an outlay of say, £400,000, today he has a Capital Gains liability of half a million pounds.
The Portsmouth & District Private Landlords Association represents nearly 500 residential landlords in Portsmouth and residential landlords (the 'PRS") provide approaching 30% of all housing in the city.
What is often overlooked is that the PRS gives the city and the businesses within it the flexibility to develop and grow. As IBM and Zurich and others moved from the city and the University started to grow, there were inadequate student halls to accommodate the demand. The PRS stepped in and met the need which allowed the University to grow unhindered from around 10,000 students to its current 23,000.
At every public meeting attended recently where housing has been discussed, a classic example of political double speak has reared its head. There is always someone in the audience who demands more affordable housing and there is always a politician on the platform (and this applies to all parties) who promises more affordable housing. Why is that of interest - well, more often than not local landlords are blamed for 'pushing up prices' which have made houses unaffordable and also, it is time someone told both sides of this debate the truth.
When we last reported on local planning decisions in June (http://pdpla.com/pdpla-news/news-articles/item/337-portsmouth-planning-policy-encourages-unplanned-behaviours) we highlighted the fact that current planning rules encouraged increased density in existing HMO"s due to the lack of opportunity to provide this much needed accommodation anywhere else. PCC have acted swiftly to change the rules and stop such developments. Unfortunately, if some of the proposed changes were applied to current HMO"s we believe that many HMO"s in the city would no longer be legal.
This month PDPLA chair, Martin Silman and vice-chair, Alwin Oliver met with Fiona Bell, Head of Estates at the University of Portsmouth to discuss the outlook for the student housing sector, the number and quality of halls being built, the role of private sector landlords and some of the concerns our members have raised.
Portsmouth have started a consultation to update the local plan which is the basis upon which all of their detail strategies and plans are formed. So if the local plan states, just for example, that there will be no zoos in the city, then anyone wanting to open a zoo will find it almost impossible to do so. Zoos may be a banal example, but the plan does state how many new houses could be built, where and of what type. It will update current plans and strategies on HMO's and student halls - so if you are a student landlord particularly, you do need to respond or ask us to include your views in our response. The consultation runs until late September, so do take the time to let us know your view please.
In the 1830's most people had a landlord and most people lived in squalid, overcrowded conditions - so not surprising that landlords were not seen as 'good people' by the masses. But why has that not changed? With all of the regulations in place to ensure that good standards are maintained and management is professional and with so many people investing in 1 or 2 properties to supplement or support their retirement, you would have thought attitudes would have changed by now.
It is believed that, for the first time in the UK, a letting agency has been successfully prosecuted under consumer protection legislation for granting "sham licences" to tenants. Our friend and supporter, John Saulet of Saulet Townsend sent us the following details of this story...
Licensing of HMO's in Portsmouth comes to an end next year, but if Portsmouth City Council were to follow the example of Brighton, the existing license scheme would be continued and extended to cover all HMO's in the city and selective licensing would be introduced in Portsmouth south (PO1, PO4 & PO5) ensuring that ALL landlords in the area need to be registered.
In our July members meeting there was much discussion between members and with guests, Bruce Lomax from PCC, John Stewart from the RLA and PCC Housing Cabinet Member, Cllr. Jennie Brent about the sort of world we would like to see when HMO Licensing ends (or is continued) next year, whether the Landlord Accreditation Scheme has a role and if so, how it could be improved and also what the PDPLA would need to do if we are to better manage ourselves and thus avoid further regulation.
For details of the meeting and some of our conclusions, read on...
Many of you will have seen the successful, primetime TV series on the BBC 'The Week The Landlords Moved In'. In the first series successful landlords moved into their own properties for a week and lived as their tenants did and whilst most were good landlords, it was surprising how little some of them realised about the way their tenants lived in their properties.
For the 2nd series, the BBC are looking for more landlords to participate and they have stated that they want to explore more about some of the costs and challenges we face as landlords. Are you interested in taking part?
If so, read on....
One of our members may need legal defence against Gosport council regarding an unpaid Section 106 agreement on a property he purchased 4 years ago. The developer was supposed to pay but since going into receivership and not paying it the council are now chasing our member for it or threatening to put a charge against the property if he does not pay about £6000 within 28 days.
Much has been said on the subject of Fire Safety of late and we all agree its importance - but do we know precisely what the law is, who enforces it, where to get guidance, who is responsible, how to do a fire risk assessment or what is required in terms of alarms and detectors?
Two key points you need to understand - firstly LACORS is just a guide and it has not been updated for nearly a decade since the group which wrote it was dissolved. Secondly, HHSRS is pretty subjective even on a good day and these two resources form the basis of all Fire Safety activity - so the onus is really on you to ensure you have minimised the risk of fire and maximised the likelihood of survival for your tenants. Now read on for our quick guide on the topic, pulled together for us by ex-chair Julian Clokie….
Recent tax changes caused the RLA to describe the taxation of landlords as 'one of the most hostile tax regimes in the world". After analysis of a number of similar countries we can confirm the truth of this assertion...
The urban future of Portsmouth was the title of a breakfast conference this month hosted by the University for local leaders, industry and alumni to discuss the strategic view from the council and the 'University Masterplan'.
There were some distinguished speakers and some bright ideas - but when you focus on what was proposed for Portsmouth, the bad news was that the picture above is wholly inappropriate, there were no new ideas and some very tired proposals totally lacking in cohesion were wheeled out once again.
It is unfortunate that we ran out of time at our AGM and had to reschedule the discussion on Fire Safety. This will now take place as part of our September members meeting - everyone welcome, attendance free, as always.
In the interim, and in the wake of the Grenfell disaster, there are some simple steps we should all take to ensure our properties remain as fire safe as is possible. Firstly, don"t rely on Fire Regulations or the advice of local authorities - we have many times advised that student landlords ignore the University advice on Fire Alarms as it is based on LACORS which is out of date and advocates solutions which are less safe than we recommend. In addition, we hear this month that PCC"s Director of Housing left his role without serving notice, alleged by some to be related to the fact that "MORE than half of the city"s tower blocks were missing, or did not have, a valid fire risk assessment" as reported in The News.
That article went on to state, "The information - contained in a council report - emerged as work got underway to remove the cladding from Horatia House and Leamington House in Somers Town after tests found it was a fire risk. Councillor John Ferret, chair of the governance & audits & standards committee said "There looks to be a systematic failure to carry out basic fire risk assessments. It will now be the job of the committee to take into account why this was allowed to happen and that we make sure everything is done to remedy the situation." Of the 39 tower blocks owned by Portsmouth City Council that are six storeys or over, testing before the blaze confirmed that seven blocks of flats were missing a current fire risk assessment and 15 had an expired assessment. Figures contained in a report for the council"s governance, audits and standards committee also revealed that of the 712 council-owned properties, which are five storeys or lower, analysis found that 280 did not have an assessment date, with 171 properties overdue a review."
As landlords, we have to be responsible for the safety of our tenants - LACORS and HHSRS are bureaucratic minefields that both need to be abolished and replaced by guidance which is fit for purpose in our view - but until that happens, there are a few things you should think about to ensure your tenants are as safe as possible....
This month the trade association for inventory clerks called for regulated inventories to become compulsory in the UK lettings market. Not a particularly sensible suggestion and definitely not based on an impartial view or any sensible data, but in the current political environment, even some of the daftest ideas seem to have a habit of growing political capital and becoming 'policy' - so it was not surprising when one of our members decided enough was enough and she had to make a plea for LESS not MORE regulation.
In her response, she stated "We are becoming increasingly tired of the knee-jerk reactions by Government" and went on to say, "PLEASE ask the government to stop trying to regulate everything Landlords (and Agents) do without properly investigating the pros and cons." All very sensible in our view, but to see why she has come to these conclusions and some of the supporting information, please read on....
A much more balanced month for PCC planning than it was last - some decisions overturned on appeal and some confirmed. Obviously we are focused on the private residential lettings which come before the committee but in our area of focus, as usual all of the activity appears to be conversion of existing HMO"s of one type or another to larger HMO"s. A logical outcome of the Article 4 direction which is having the effect of increasing density of HMO dwellers in areas with HMO"s rather than reducing them as was intended.
Read on for specific cases….
Speaking to the Milton Neighbourhood Forum this month Bernie Topham, COO at the University of Portsmouth explained to Milton residents the University's decision to close their student accommodation at Furze Lane.
The closure appears to have been forced upon them due to the large number of private halls rooms being built around the city. The plan was always to keep the 600 units of accommodation at Furze Lane as they were needed along with the Greetham Street, Zurich House and Catherine House developments if the University was to meet its target of being able to offer halls rooms to all first year students. However, additional new developments mean that many more rooms than are needed for 1st years, even if the Milton site is closed, will be available.
The PDPLA has historically paid £10 per member per year for DAS tax investigation cover, Legal Defence cover and a very general legal advice plus various other minor services tied up with small print.
The RLA are now giving us more extensive tax investigation cover for no extra fee. This was perceived to be the most useful element of the cover, especially as HMRC are now more interested in landlords so this could be of use to any of us.
The question is, do we need to retain the legal cover? (With the duplicate tax cover as this comes as a package)
At the AGM there was a unanimous vote to end the cover and save over £2000. Therefore, unless significant members who were not at the AGM object, we will not renew the DAS policy.
This means that some of you are no longer automatically covered for some risks which we know will be important to a small proportion of members - so we urge you to check the details below and decide whether you need this cover or some additional cover or, in your situation, these are acceptable risks that do not need insurance.
As a small 'not for profit" member organisation with just 2 part-time staff and 10 volunteer committee members, the PDPLA has had a very busy year. With 10 member meetings, a Christmas Social, 12 newsletters and all of the associated administration and organisation we would have been busy - but in addition to all of this we have successfully affiliated with the RLA and outsourced a portion of our admin overhead to them and we have successfully and effectively argued the case of our members both locally and nationally.
We have explained, educated and railed against the unfair tax changes forced upon landlords, we have been active in guiding and informing much new legislation both directly and indirectly - as the PDPLA, we have written formal responses on at least 6 consultations about proposed legislation and we have actively participated wherever we have believed it will benefit our members.
The PDPLA always considered itself a friend and partner of the University of Portsmouth (UoP), our members provide many of the 12-15 thousand student rooms in the city which UoP depend upon to exist, without us they would have very few students and similarly, we have been keen to continually improve standards and facilities to ensure that UoP is successful as many of our businesses depend upon it.
However, this dynamic was always likely to change with the addition of 7-8 thousand new rooms in student halls, mainly in the 'student square' district that is developing around Portsmouth and Southsea station.
Over the past few months, UoP have stopped attending any meetings attended by the PDPLA and have not answered a number of questions we have put to them on matters important to our members. We suspected that we had become '2nd class' partners and all of their resources were being expended on the new halls providers, which is understandable, but there were also rumours about the Uni's own halls in Furze Lane, Milton.
Whilst UoP have yet to respond to our enquiry, we have had it confirmed that the UoP halls in Furze Lane will close in June next year - so this years admission will be the last. Our expectation is that the Uni bus service will also stop or be severely cut back, which will significantly affect those with properties along its route, as large numbers of students currently choose to live near Goldsmith Avenue / Fratton Bridge simply because of the free bus service.
We changed the format for our monthly meeting in May and invited all of the then announced candidates for Portsmouth South to come and talk to us about their parties views on the Private Rental Sector.
We met sitting Conservative MP Flick Drummond, ex-council leader and Liberal Democrat Gerald Vernon Jackson plus local Labour leader Stephen Morgan who announced he was a 'hustings virgin' and Ian McColloch from the Green Party.
Attendance was good but surprisingly, many were new (and welcome) faces from the RLA, the NLA and the SLA. Our own members apparently did not have time or interest which is a shame and a missed opportunity.
After losing 5 appeals as reported last month, the April planning meeting was more careful than previously about the request to change a small HMO in Manners Road into a larger HMO, concluding that, "a decision be deferred to allow further discussions with the applicant".
The May planning meeting will discuss this application again as well as an almost identical one in the same road and two C3 to C3/C4 (family use to mixed family or HMO) applications, one in Victoria Road North and the other in Jersey Road. There is also a 'small HMO' to 'large HMO' in Queens Road, Fratton.
One application that is not being reviewed this month but which will be of interest to some members, is the application for a 20 room student hall by the John Pounds Centre in Portsea.
The team at East Hants District Council (EHDC) are looking for landlords to provide accommodation. The support they provide is much more extensive than larger local authorities appear willing to provide - including protection against rent arrears for the whole duration of the tenancy, rather than just the 1st 6 or 12 months as is the case in Portsmouth.
East Hants is an odd shaped patch from Liss across to Bordon and extending up in the direction of Guildford. As such, much of the area is on the Guildford LHA rate which is about 30% more than Portsmouth so will be appealing to landlords looking to invest in new developments in Liss, for example, where 2 bed properties are most needed according to EHDC.
The offer should also be appealing to landlords with existing property available within the PDPLA area as the EHDC can place potential tenants up to 30 miles away
The RLA have launched their 2017 manifesto in response to the snap election.
It sets out coherent proposals to improve the private rented sector for both landlords and tenants and they are calling on the political parties to support the growing private rented sector as it works to meet unprecedented demand.
The RLA"s 6 Achievable Priorities For Making Renting Better
1. Boost the supply of new homes by bringing unused land and empty properties into use for private rental homes, coupled with positive taxation policies that promote growth.
2. Establish a new specialist housing court to deliver quick and cost effective justice to help landlords and tenants to enforce their rights.
3. A fairer approach to welfare reform for landlords and tenants, giving tenants claiming Universal Credit the choice of having rent paid direct to their landlord, and speeding up the claim process.
4. Effective enforcement against criminal landlords through guaranteed long-term funding for local authorities, backed by a system of co-regulation for the majority of law-abiding landlords.
5. Support landlords to improve energy efficiency in private rental homes for the benefit of tenants and the environment.
6. Create a new deposit trust for tenants enabling them to transfer deposits seamlessly between tenancies.
PDPLA Chairman, Martin Silman was briefly interviewed on the BBC Radio 5 Live Breakfast programme in a discussion on inflation earlier this month. In preparation, he surveyed senior members of the PDPLA and came to some surprising conclusions.
Yes, inflationary pressures from cost increases will have a significant impact on future rent increases but there are 3 other factors which may have a more significant impact on future rent levels:
1. Letting Agent Inflation
2. Battery Farming of Students
3. Recent Tax Changes
The UK population is now just over 65 million, having grown by over 500,000 in just one year - 2014. The number of households in the UK is now 27.1 million, an increase of a shade over 7 per cent since 2006, about the same as the increase in the population level in that same period.
The most recent projections say the UK population will reach 77 million by 2050, though this does not account for whatever the impact of Brexit might be.
But you have to dig down into the actual demographics to assess the real impact on housing demand / supply on specific segments of population in the future.
A tenant of one of our members is doing some market research amongst landlords as part of a new product development project at a security products manufacturer. She said, "We are collecting feedback from landlords for a manufacturer who is potentially developing a product or service that allows landlords to keep their properties safe and in good shape. Responses to this survey will be used as part of this market research only and will be kept strictly confidential within the business."
The survey is quite short and there is a £100 prize draw - so we do recommend you take it, more details here....
Not a game of football, but the outcome after 5 planning decisions where appealed.
To be fair to the planning dept., their officers recommended each of the applications were approved but the planning committee, after hearing objectons from NIMBY residents, decided to ignore the advice of the professionals and to go ahead and reject the applications. In each case, the applicant appealed and on review of the specific case, the inspector upheld the appeal and granted the application.
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.