Recent news items of interest to local landlords, use the search option above to find specific topics.
Portsmouth, like many councils, has outsourced collection of council tax to a private company with a view to maximising their income and thus reduce the impact of cutbacks on the services they provide. This is commendable, but when it comes to student accommodation, we fear it may hurt students, the University and the council itself in the longer term.
There is a Private Members Bill making its way through the Houses of Parliament which has almost universal support - however, some people are expecting it to solve problems that it cannot and we also see statements which do nothing to reduce the bad press landlords get considering the amount of time and effort we expend helping those most in need and most vulnerable. Read on to see our explanation of some of the considerations that we sent to Portsmouth South MP, Stephen Morgan and his positive response.
We have been following the legal battle over HMO licensing between Nottingham City Council and one of their student landlords with some interest. In the latest instalment, the Supreme Court removed conditions applied by the Upper Tribunal in an earlier appeal which confirms our view (and contradicts a view held by PCC during the 5 years of Additional Licensing just ended), that you can take the type of tenant into account.
A simple example, is that gaps between spindles on stairs (balustrades) need to be 4 inches or less to prevent small children falling through, but in a house which will only be let to adults, is this relevant? PCC always argued they could not guarantee the type of tenant or their visitors, so all rules should apply to all properties. The new ruling shows that this is not the case and allowances can and should be made based on the type of tenant.
We often recommend members challenge or appeal decisions by inspectors, partly because they are inconsistent from one house to the next, but also because many of them are inappropriate given the type or usage of the property in question. So if you are asked to do something the benefit of which is not obvious, do consider challenging it before you spend your hard earned cash on what may be unnecessary alterations.
If you have properties in Portsmouth you need to be aware of changes in waste collection as falling foul of them could cost you £5,000 (see our earlier article outlining the fines which can be applied).
Residents will be issued small bins which can only hold 3 compressed bin bags and there will be a £2 charge for every additional bin bag (and only then if they have pre-paid stickers on them). Residents in HMO's can get larger bins but you need to take action now to ensure you get the appropriately sized bin for each of your properties.
PDPLA committee members, Tony Athill and Joannie Goldenberg, attended the RLA Future Renting conference at Imperial Collage, London in September.
The all-day event, hosted by 30-year veteran of radio and presenter of the popular Property Hour on LBC radio, Clive Bull, was attended by more than 200 landlords and letting agents.
Speakers included MP's, senior civil servants and a wealth of experts from across the industry.
Housebuilder Redrow just announced a record year according to Merryn Somerset Webb in MoneyWeek. The number of houses sold is up 9%. Revenues are up 16%. Pre-tax profits are up 21%. And the dividend payment to the firms shareholders is up 65%. The chairman and founder, Steve Morgan is pleased and keen for this fabulous run to continue, so he has an idea. He'd like the Help To Buy scheme under which the government underwites 20% of the purchase cost of a new build home to continue forever. "If it aint broke" he says, "Why fix it?".
He has a point, H2B works brilliantly for housebuilders. 30% of Redrows sales last year relied on it which is typical across the industry. Without it, the sales number would probably be lower. But H2B doesn't just help housebuilders shift stock, it helps them shift it at high prices. After all, anyone effectively getting an extra 20% worth of loan from the state can clearly pay more than someone who isn't. Probably explains why Redrows profits are growing faster than their revenues. This government driven house price inflation is no different to the 'rent inflation' which has been caused by Housing Benefit. That to some extent, stopped when LHA was uncoupled from inflation - but it still underpins the market and sustains higher rents than would otherwise be asked (and thus higher house prices as the yield justifies it). Interesting as H2B was originally setup to solve the problem of high house prices.
The PDPLA was invited to a private reception at the House of Commons, hosted by Sir Christopher Chope MP to mark the 20th anniversary of the RLA. The event heard from Housing Minister, James Brokenshire, MP and also Shadow Housing Minister, John Healey MP and was celebrated by the publication of a series of essays on the future of the private rented sector.
RLA Chair, Alan Ward, made a point of highlighting the positive contribution that private landlords make and how they have struggled as a result of recent legislation. The MPâ€™s present, from all parties, sang the praises of private landlords but we obviously have to wait and see if any of this positive support translates into improvements to the environment in which we operate.
A big achievement by the RLA was in bringing together so many diverse voices in the collection of essays, from the RLA to Crisis and Shelter to the British Property Federation â€“ a collection of organisations not always on the same side.
Read on for a summary of what was discussed....
A member asked what the pro's and con's of joint contracts were compared to individual contracts when you have multiple tenants in one property, this is what we came up with....
Following on from our article highlighting the fact that a landlord or a tenant could be fined up to £5,000 for leaving bin bags in the street on the wrong day or rubbish in a forecourt, it is imperative that you instruct ALL of your tenants on their obligations and be able to prove you have done so, in order to avoid the prospect of being fined for their misdemeanours. We have drafted a document which we recommend that you get all new tenants to read and to sign to show they have read it.
Our friends at Havant Borough Council struggle to find homes for some of their more difficult residents, whether due to their history or just their current circumstances and the shortage of accommodation available. They approached us to help them understand what they could do to improve the situation for these families and individuals. Part of our response follows…
Additional Licensing of HMO"s in Southsea comes to an end this month. Its original objective was to improve the standard of houses offered, to encourage better management of those houses and to reduce issues within the local community. Has it done that? We need to hear your perspective…..
At the July Cabinet meeting for Housing, Portsmouth City Council signed off the new regulations mentioned in last months 'Ensuring we are heard" column, allowing PCC to fine landlords OR TENANTS up to £5,000 if they leave rubbish in forecourts or on the street.
At our June members meeting Gary Jenkins from the Department for Work and Pensions and Mark Sage, the Tackling Poverty Officer at Portsmouth City Council updated attendees on the current status and plans for Universal Credit and gave guidance on how best to handle the rollout locally, what support was available, what landlords should take care with, etc.
After the meeting, Mark produced comprehensive guidance for landlords which we have appended below in full...
The PDPLA was invited to visit Hope House last month, the homeless hostel operated by the Salvation Army after their presentation to us at our April members meeting. Tony Athill and Alwin Oliver were the only members to attend which was sad but no surprise, we have had many such requests from homeless charities in recent months.
The centre provides temporary accommodation and support for homeless people, usually with a local connection, including people with alcohol, drug and mental health problems. They also provide ongoing support for those who they have helped move on.
They have a few residents who have been through a process and have been assessed by staff to be ready to move out into social housing or the PRS. Vacancies in the former are rare. These residents are effectively bed blocking the acceptance of new residents who would benefit from help. The centre would like more private sector landlords to provide homes for these individuals.
From the days of rent controls in the 80's through to the financial crash, we saw wave after wave of government incentives to get people investing in property. This had the dual benefit that it provided housing to replace that which was being lost from the social sector whilst also pushing up house prices which made the majority of voters feel richer (and thus, in theory, encouraged them to say thankyou when they went to the polling booth).
However, the tide has now turned - the proportion of voters disgruntled that they cannot get on the housing ladder has grown to a size where governments of all colours have realised that ever increasing house prices may have worked once but is not a recipe for success anymore. The Labour party talk about re-introducing rent controls and this week, Conservative MP Neil O'Brien writing for Onward (a centre-right think tank) argued that the crackdown on landlords has not gone far enough and mortgage interest relief should be scrapped altogether and that there should be further reforms to property taxes.
Locally, we see block after block of student housing going up - you cannot blame the developers, no other development type avoids council tax, business rates and section 106 CIL obligations - but do we really need so many?
Against this backdrop, it is not surprising that some of our older members are having second thoughts about whether to continue with student accommodation or not - whilst they have had a reasonable income over the years from the service they provide, it is now getting harder and harder for them to manage their properties in the way they always have done. I asked one such couple to give me their thoughts.....
Instead of our normal summary of planning applications, once again this month we are sharing the news item created by the Portsmouth Society for their members. Whilst it is not as focussed on the PRS as our normal summary, we hope you find this version more informative and complete. The Portsmouth Society are a voluntary organisation interested in preserving the best of Portsmouth's environment: buildings, streets, open spaces and seashore, and in encouraging well designed new buildings and amenities. Click here for more information.
Over the past few years the PDPLA's simple 'one size fits all' membership structure has struggled to meet the needs of members who want some of their staff to benefit from membership, but that has now all been resolved with the announcement of the new 'PDPLA Corporate Membership'
New legislation has just passed into law extending Mandatory HMO Licensing to all dwellings with 5 individuals from 2 or more families from October and, along with that, new rules restricting the use of smaller rooms in any licensed HMOs have been included in spite of our evidence that this will increase homelessness without any positive benefits.
Steve Cox, Business Account Manager at Alan Boswell Group, explains the key points you should focus on when looking for landlord insurance
Comparing landlord insurance products can be hard work. While it"s easy to get quotes from multiple insurers, you may find there"s lots of information to wade through and that you struggle to spot the differences.
So how do you find the right policy for you? Here are my top nine things to look out for when comparing landlord cover products.
At the AGM we covered GDPR in some detail (the new General Data Protection Regulation) and how it applies to landlords. If you have not yet registered with the ICO or worked through the steps to enable you to create a privacy notice you do need to get started as soon as possible. However, we might ask whether any Local Authorities or Universities have complied...
Or can we call you Meg? Everyone here at the PDPLA hopes that you are enjoying married life and that both you and Harry are settling into your new home at Kensington Palace.
We wanted to apologise on behalf of the British people as a whole, for the amount of paperwork you have been subjected to over the past 10 days and wanted to ensure that you know it is not personal, all new tenants are in exactly the same position. (Typically, each new tenant is burdened with around 100-120 pages of 'information" which we have to share to meet our legal requirements. Obviously, no tenant ever sits down and reads it all before signing, so it is of debatable value but this is what we have to do).
Let us try to help by explaining some of the key pieces of documentation you have been presented with as a new tenant….
In a recent report, the National Housing Federation stated, "that the housing crisis is not the fault of greedy developers or buy to let investors, but that it"s due to poor government policy and a lack of a co-ordinated housing strategy to work out how to put a roof over people"s heads."
With 15 housing ministers in the past 20 years, the average tenure is just 16 months - perhaps not surprising that no government during that period has done anything in this sector other than to make it worse.
Instead of our normal summary of planning applications, this month the Portsmouth Society have kindly agreed to allow us to use theirs. Whilst it is not as focussed on the PRS as our normal summary, we hope you find this version more informative and complete. The Portsmouth Society are a voluntary organisation interested in preserving the best of Portsmouth's environment: buildings, streets, open spaces and seashore, and in encouraging well designed new buildings and amenities. Click here for more information.
At our April members meeting, we discussed some of the schemes that we have been approached with and the difficulties in deciding which to share and which not to share.
One of the schemes we chose not to share, was one which purported to avoid many of the new taxes which landlords need to pay (avoidance is legal, evasion is not). However, Hampshire Property Network (which coincidentally is run by a couple of our members) chose to invite the speaker to explain the scheme to their members and they have agreed to waive the normal fee and open the event to PDPLA members who wish to attend.
Read on for full details...
A working group has recommended that landlords should be required by law to arrange safety checks of the electrical installation in private rented sector residential properties. Whilst it is imperative that all properties offered should be safe, the PDPLA have objected to this specific proposal on the grounds that it simply creates work for electricians, costs for landlords which will inevitably be passed to their poor tenants yet does little to actually improve electrical safety.
Alliance Remedial Supplies, who spoke to members about condensation and mould at our February meeting, are having a trade day on Wednesday 20th June which will include presentations, a FREE buffet lunch, a goodie bag and full access to explore Bursledon Brickworks Museum.
At our April meeting members were updated on a number of new schemes which had been proposed to the PDPLA and reviewed by the committee, including one from PCC and one from a local church group. We also had 2 guests, Lucy Brown from the Salvation Army who invited us to visit for coffee one morning (pencilled in for June 1st, updates will follow) and also, Claire Ray from Langstone Estates who had several interesting propositions for members.
The meeting was completed with a presentation from our own Carl entitled, 'Accounting For Landlords' which allowed members to compare what they were doing as regards tax returns, software and book keeping compared to other members.
For more detail...
A long running case which started in 2011 has decided that a lady who chose to bring her horse indoors during the winter is not allowed to do so.
She was the owner of the house but her pet horse was removed on the grounds of the welfare of the horse not on the contraventions of several headings of the HHSRS (HHSRS is tenure independent.) Nice precedent for removing animals but not people from property based on unsuitability for welfare..
(We have to wonder whether HHSRS iHorse Health & Safety Rating System?) is fit for purpose).
We had a member who asked, "In a student HMO I always have individual contracts for each tenant but from a Council Tax perspective, I am better off using a Joint & Several contract (as if & when CT falls due, the local council will bill the landlord if on individual contracts but will not if the tenants are on a 'Joint & Several' AST - dumb distinction I know).
If I switched to Joint & Several ASTs but still collect the rent individually from each tenant, does that negate the J&S contract / would it be seen as such if it ever came to court / is there some other consideration I should be aware of?"
All PDPLA members are automatically members of the RLA and RLA members in the area are PDPLA members, even though both organisations are completely separate. So we thought we would take advantage of the excellent RLA helpline and forum and posted the question on the forum (though we could have called the helpline and got a response from the RLA rather than its members).
Most landlords who have more than one property have at least one leasehold property in their portfolio (and many who only have 1 just have a leasehold flat)..
What all of these landlords have in common, if you chat about it over coffee, is a real dislike of leasehold as a means of ownership and a desire to decrease the number of leaseholds in their portfolio.
Why? Service charges are always a bone of contention, the cost of insurance (including the kick back for the agent who thus looks for the best kick back rather than the best insurance), the lack of control or input, the peppercorn rent, the decreasing value of their property as the length of lease shortens, the high cost of extending the lease...
And for people who own a flat in a converted house, it is often not worth the managing agents while to bother with maintenance and the like so many smaller properties fall into disrepair.
And as a leaseholder, trying to work out who to talk to, to resolve issues, can be a real nightmare.
So why do we put up with it when there has been a perfectly good alternative ever since 2003?
After changing the planning requirements last November, making it harder to create new or extend existing HMOs thus further reducing the number of HMO"s in Southsea, Portsmouth City Council (PCC) have just completed a consultation exercise aimed at gaining approval to tighten the planning restrictions even further.
The PDPLA has responded pointing out that increasing minimum room sizes to 7.5 square metres will make hundreds of perfectly acceptable rooms unlettable and leave similar numbers of people either homeless or fighting for the smaller supply of remaining rooms with an obvious impact on rents in the area which will spill through to affect the whole PRS. We are also concerned that the new rules will leave many houses unsellable as they are sandwiched between HMO's when the sensible solution would be to allow them to convert to HMO's and our final concern is the widely held view that the city does not need HMO's as all the new student halls will replace them. There are 2 problems with this view - firstly, not everyone who lives in an HMO is a student and possibly more important, 80% of students cannot afford £200 a week to live in one of the new student halls - so we expect to see empty halls, bankruptcies amongst developers and firesale pricing of the new blocks. This could all be good for the city in the long term if there were an alternate use for these new blocks but unfortunately, they have been designed as sole use entities and converting them may not be an option.
Read on for more details of the consultation and PCC proposals and our full response.
Whilst the full switch over to Universal Credit does not happen in Portsmouth until September, the area became a 'Live Service' area, so some single jobseekers could claim Universal Credit (UC) during March.
We are hoping to have someone from the Department of Work and Pensions attend our June members meeting to talk to us about the processes around UC and some of the support available.
No, not a special offer to buy condensation or mould!
At our March members meeting, Chris Reynolds of Alliance Remedial Supplies educated attendees on condensation, mould and damp - how to avoid them, how to get rid of them should you have them and he also compared and contrasted various forms of extractors along with explaining the role and relevance of devices such as Single Room Heat Recovery and Positive Input Ventilation.
For the 10% discount code for PDPLA members on his whole product range, see Chris' presentation in the members area of this website here.
A local letting agent had their licence to operate HMO"s in Southsea removed after they were found to be overcrowding a flat which they let. The agent appealed against the decision and the property tribunal found in favour of the agent, stating they "do not consider the breaches in this case to be serious breaches and that the breaches would not have been sufficient on their own to have been sufficient reason for revoking the license." Interestingly the flat in question was over the office of the agent so we have some sympathy for PCC's view that of all people, agents ought to get the paperwork right.
It is clear that the individual should have known better and it does look like he was not paying sufficient attention to the conditions of his license. He accepted that he had been in breach of his licence on both counts but pleaded ignorance and misunderstanding.
What does this mean for PCC"s enforcement policy and is there something we should learn from this?
Mandatory licensing of large HMO"s with 3 or more storeys and 5 or more occupants was introduced in 2006 and it can be argued, that the aim of the legislation was to improve fire safety in these dwellings as more deaths occurred in buildings with 3 or more storeys than in 1 or 2 storey buildings and the likelihood of fire in bedsits (as many of these dwellings were) was greater.
Since 2010 when rules were relaxed, additional licensing schemes focussed on HMOs and selective licensing schemes focussed on Anti Social Behaviour problems have also become widespread. It is one such version of additional licencing which covers southern Portsmouth and Southsea and requires all small HMO"s to be licensed. This scheme was introduced in 2013/14 and ends this year.
The government now plans to extend mandatory licensing to cover any dwelling with 5 or more occupants regardless of the number of storeys, aimed at bringing smaller HMO's into the scheme.
Read on to see how this will affect you…..
Up until now, there has been no specific legal minimum size for a bedroom though a number of legal cases have set some boundaries and the building regulations do provide guidance for new builds. HMO landlords in Portsmouth, whether 'mandatory" (3+ floors, 5+ residents) or 'additional" (not mandatory but at least 3 unrelated residents) have been allowed rooms as small as 6 square metres depending on communal space and layout.
That is all about to change….
At this months PDPLA members meeting we had a presentation on the regulatory changes that now mean that ALL landlords should:
There was much debate about, for example, how often you need to check someone"s passport if they are British (and remember, 15% of Britons don"t have passports - so what do you do then?). But the key point in all of these areas is that you need to have a clear audit trail to show you are legally compliant. If you do, you should have no problems. If you don"t you run the risk of major problems in the future.
For details of what you must do, read on….
In an earlier article, we quoted the example of Fife Digs and rooms contracted for 6 months being vacated after less than 3 months. Unfortunately this was not a 'one-off' and we have had a number of members and at least one letting agent who have let us know of their bad experience with this agency.
Obviously we are not in a position to say anything bad about this agency, but we are duty bound to warn our members of the bad experience of others and to advise a great deal of care should this agency approach you.
Here is what we know...
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...
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.