Recent news items of interest to local landlords, use the search option above to find specific topics.
Pauline has many years of experience in the letting industry and we hope she will help us become a more professional organisation - however, she is part time so don"t expect instant responses or support. Please say hello and introduce yourself at future meetings and join us in welcoming her to the PDPLA.
Several members have mentioned that they find it difficult to work out how to contact the PDPLA, so with that in mind, a simple summary of the 4 ways to contact the PDPLA by email follows:
Don't forget we will be hoping to sign up some new members and meet some existing ones at Portsmouth Guildhall on Saturday, 5th March.
Full details below
When I first started letting to students, I diligently followed the University guidelines and kitted out each room with the full list of specified components - bed, desk, chair, chest of drawers, wardrobe, etc.
In the past few years I have noticed that the average student actually needs quite a different room layout. They prefer double beds, but this is nothing to do with promiscuity or restless sleeping - it is simply because 'studying" does not happen at a desk, one gets comfortable on one"s bed and then arranges books and laptop on the 2m square surface around you. What you end up with is a much more comfortable and much larger work area than you could have at even the largest desk. Think of it as studying in the Japanese style.
We received the following request from PCC: "Got a basement? Please let us know
You can help the city fight flooding - by letting us know if any of your properties have a basement."
(We are guessing this refers to your tenanted properties and not your collection of fine wines).
When Michael Faraday postulated in 1851 what would happen here on earth if the sun was moved, say, 10 feet he started a chain of thought which resulted in Einstein"s General Theory which predicted, among other things, the existence of gravitational waves. Faraday"s logic was that the sun and earth are connected in some way by gravity and if one body moved, that would be detectable at or by the other. It wasn"t until Einstein"s General Theory was published in 1915 that a construct for how this might happen was explained - and he named it gravitational waves.
Since the Chancellor, George Osborne, was released from the fetters of the coalition last May he appears to have started a concerted assault on landlords. Whether this be a sensible way to deleverage part of the economy, reduce overall debt levels and stop house prices over heating or alternatively, a pernicious attack on historic Tory voters with a view to winning some easy popularity, collecting more tax from a community that will garner little support from the wider populace while replacing small landlords with easier to deal with corporate bodies is much debated.
We have discussed various elements of the changes in these pages several times over the past few months but whatever your personal view - unless you fully understand the impact of these changes on your personal situation, we do urge you to consult an accountant and make sure you understand the detail, as all of us will be affected in some way.
Landlords in Plymouth believe they are sufficient in number to overturn their MP's majority and are lobbying to make it so - though the next election could not be much further away.
One item, known as Clause 24 of the Finance Bill is of great concern for any landlord who has financed some or all of his/her letting portfolio with mortgages or similar borrowings. We received the attached and reproduce it in its entirety here - please make sure you understand what this clause means for you and thus what you need to do as a result.
There has been much discussion recently of the Housing and Planning Bill 2015-16 currently passing through Parliament as it will be the 1st major shake up of Housing law since 2004-2006. Veteran PDPLA member Julian Clokie has taken the trouble to summarise the main points of the bill for us. (And anything in brackets is his commentary, everything else is from the Bill itself)
The Bill will become an Act in the middle of the year. For the detailed timetable and for links to the Bill itself:
PDPLA member Louisa Wearn of Ewemove has allowed us to include this offer for members from her current customer newsletter:
A new book has been published which reveals the 7 costly mistakes most people make when they sell, and a 39 step guide that can help you to sell your house for the best price, in the time frame you want.
The government are proposing to change the system such that instead of filing one tax return a year, you will simply send an extract from your software once every 3 months. For a small business this is probably a simple change and possibly an improvement on what they do today but for most landlords, who don't have suitable software with which to manage their business, this will make the effort of submitting tax returns untenable.
If you agree with this statement, we urge you to sign this petition: "Scrap plans forcing self employed & small business to do 4 tax returns yearly".
There has been much discussion of the new Right To Rent legislation that came into force on 1st February, which makes it illegal to rent accommodation without first ensuring the new tenant is legally allowed to live in the UK, but what is it the offence?
It is allowing the wrong person to live in your property that is the offence not failing to carry out checks.
As an association, we are attempting to fight off the latest proposed increase in HMO legislation that would increase the number of HMOs requiring licences and renderl roughly 200 small rooms in the City illegal. These are currently let to happy tenants. Tony is the architect of our response to the various bodies involved and following a reminder, Flick Drummond MP has forwarded our concerns to Brandon Lewis, the Housing Minister. The arguments are summarised as follows and taken from our consultation response:
As Portsmouth has one of the highest levels of overcrowding in the UK, we are very concerned that well intentioned Government measures may have unforeseen consequences. Primarily a reduction in accommodation available to single people on low incomes and the vulnerable.
As it is likely that Portsmouth has more small rooms affected by these proposals than other cities we have concentrated on this part of the consultation. We also have seen and endorse the submissions made by the Residential Landlords Association.
As we sit on the local HMO Licensing Governance Board in Portsmouth, a city that is trying to make 'additional" licensing work, we can comment from our in-depth experience, being aware that what we see here cannot be unique. Thus we have a few comments to make with regard to extending licensing.
The photos were taken in Portsmouth on 14th December 2015 to illustrate the gravity of the situation. The individuals consented and none appeared to be under the influence of drugs or alcohol.
One lady landlord has become so incensed by the recent changes that she openly wrote to Grant Shapps, her MP, and her letter has been widely shared on social media. We include it below unedited as she summarises the impacts of recent changes so well.
The Bishop of Portsmouth has urged the government to think again on stamp duty rises aimed at hitting the buy-to-let market as reported in The News this month.
The Rt. Rev Christopher Foster used a Lords debate on the autumn statement to warn ministers the issue was more complex than it appeared and vulnerable groups in society could be penalised as a result.
Since the new website came online all of our members have been able to manage and update their own account details. Each time you log in you will be taken to your profile page. Some of the things you can edit or update include:
It is very important to keep these details up to date as they are the basis not only for our communications with you (for minutes, newsletters and more) but also for other member benefits like Tradepoint cards and RLA magazine subscriptions.
Twenty two of our members learnt to test portable appliances last month (known as PAT or PAT Testing) when the team from Quick Test came down to Portsmouth to train us.
Increasingly local authorities and groups such as the University specify that appliances from kettles to washing machines need to be tested and apart from the cost, many electricians hate the task and so it can be difficult to find one willing to do the job at a time when you need it done. Now some of us can do it ourselves using the PDPLA owned equipment.
The Department for Communities and Local Government (DCLG) has published a technical discussion paper setting out proposals to extend the mandatory licensing regime for houses in multiple occupation (HMOs) and speed up the licensing process. The proposals apply to England only.
The discussion paper builds on the measures to tackle rogue landlords and evict illegal immigrants that the government announced in August 2015.
It is no secret that the entire British population appears obsessed with bricks and mortar. This was exacerbated by the cheap credit available in the run-up to the financial crash in 2007 and house prices have reflected that rising steadily until the credit crunch which briefly put a stop to the free flow of cheap money that was fuelling the bubble.
Since then, given the media-at-large's tendency to focus within the M25 and not that much far beyond it, you may have had the impression that all is well with the property market and that it's largely roaring ahead, reinforced by central bank money-printing and the usual arguments about short supply that everyone trots our when prices are rising.
But in fact, if you look at figures from Nationwide (the table below), most of the UK beyond the southeast of England is still struggling to recover from the crash. As the figures show, prices in North-East England, Scotland, Wales and Northern Ireland (a bit of a special circumstance, given its exposure to Ireland's bubble market too) have yet to regain their 2007 peak levels. And in real terms (adjusting for inflation), UK prices as a whole have still to recover to peak levels, as the chart demonstrates.
In 2000, just over 69% of houses in Britain were inhabited by owner-occupiers. Homeownership went on to peak at 69.7% in 2002. Yet now homeownership in the UK is at its lowest level in 29 years, with only 63% of houses occupied by permanent owners. It's all down to one of the biggest British investment trends of the last l5 years - the rise of the amateur landlord.
First-time buyers -struggling to raise deposits to buy houses at today's central-bank inflated prices - have been competing with buy-to-let investors for starter properties and for the most part they've been losing out. As a result, roughly 4.4 million people (18% of households) now rent from private landlords the houses they would otherwise have bought - up from 2.2 million in 2002/2003.
Indeed, for the first time ever, the number of people renting from private landlords exceeds those in council and housing association houses.
For the past couple of years, our friends at PCC have threatened to collect Council Tax (CT) from student lets during the summer when they are empty. This year, they seem to have finally managed to find a way to do it cost effectively - in the past they never bothered as collecting potentially just one months council tax on a property cost more to administer than was actually collected and could not be done consistently across all properties in the city.
We can argue this one both ways - in the current environment where budgets are tight and hard decisions need to be made about what public money will be spent upon, any initiative which collects more of the taxes due and thus increases the size of the spending pot is to be commended. However, we also believe that where a house is occupied by students the council has already been recompensed for lost council tax as part of the 'Formula Grant" calculation (see here) and as such, to collect during empty summer months is to collect the appropriate tax twice.
Historically, we have been encouraged to offer 10 month contracts to students - unlike Brighton, Bristol, Birmingham, London, Manchester and Southampton and elsewhere, where 12 month contracts are the norm. Also, where a property is empty the local authority have allowed a 1 month void free of council tax - so if the property was empty for 2 months, you would only be charged for 1.
The Bank of England is to be given powers to control buy-to-let mortgage lending.
In what could be a highly significant move, Chancellor George Osborne said that he will extend the powers of the Bank and the Financial Policy Committee to the sector.
It follows concerns that buy-to-let borrowers could be particularly exposed in any downturn in the market, and that this could rock the wider housing market and the general economy.
New figures, compiled by umbrella group London Councils and sent to us by Inside Housing, reveal that London boroughs housed 471 households outside the capital between April to June this year, a rise of 33% compared to the year before. This is part of a trend which has worried both Portsmouth and Havant local housing teams as the shortage of accomodation is exacerbated by the influx of such families, even before the impact on local services is considered as these families often place a greater burden on schools and health services than other families.
Inside Housing reveal that nine London boroughs met with seven councils in the West Midlands last month following concerns that they are "outbidding" boroughs outside the capital for private accommodation for homeless families.
Councils outside London say they struggle to match the level of incentives offered by boroughs in the capital, meaning authorities such as Birmingham City Council struggle to find available stock.
The London boroughs, which house families or plan to house families in the West Midlands, pledged to agree on a "collaborative" incentive sum that they will pay landlords if they continue to operate the area.
Following on from the presentation at one of our meetings earlier this year aimed at helping our tenants avoid falling into the clutches of loan sharks, two men have been arrested on suspicion of illegal money lending following an operation in Havant this month.
The England Illegal Money Lending Team working in partnership with Hampshire Constabulary executed warrants at four addresses in Havant, Hampshire.
During the search of the properties a number of documents relating to suspected illegal money lending were seized along with a significant quantity of cash.
The Housing and Planning Bill is currently going through the parliamentary process (2nd reading in the Commons this month). We cannot know what it will finally look like or which elements will become law, but there are some proposals which will be of interest to landlords and some which will affect us directly. The aim of the Bill introduced by Brandon Lewis, Housing Minister, is to solve the housing crisis and includes new measures that will make it easier to turn underused office buildings into new homes.
Sharing this item from the RLA as it applies to most members - An RLA member recently used the RLA helpline for advice following the purchase of a fire extinguisher for one of his rented properties. The salesman called at his home. He purchased an extinguisher using a business cheque in his business name. He subsequently learned that an equivalent extinguisher could be purchased much more cheaply so he cancelled the purchase of the original extinguisher, believing that he was entitled to do so. Regrettably, the seller refused to agree to the cancellation of the contract. The seller was within its rights.
Following our frequent championing of the issue, PCC have introduced reduced rates for new HMO licenses.
When the scheme was introduced in 2013, the fee for a 5 year license for a standard HMO was £490 and the logic was, that anyone applying later would still have been letting since 2013 so the charge would not reduce. The new format has increased fees for late applicants and reduced fees for new ones.
The University of Portsmouth has been ranked in the top ten modern universities in the UK in the Times and Sunday Times Good University Guide 2016.
The guide also puts the University of Portsmouth as a top ten university in the south-east and in the top 20 nationally for teaching quality.
Apparently, most household fires are caused by electrical faults and frequently, this is due to a loose or bad connection generating heat which causes adjacent materials to catch fire. For this reason, next time you have your electricity certificate updated, if you have a plastic consumer unit / fusebox under the stairs, you will be asked to change it to a metal one.
This is because stairs are typically escape routes in case of fire, so anything which risks causing a fire under the stairs and thus blocking the escape route is particularly dangerous.
The good news is that you probably don't need to pay out on a complete rewire and replacement of the unit - just pop into you local Wilts store with your PDPLA Wilts discount card....
Ex-Leader of Portsmouth City Council, Gerald Vernon-Jackson, in his role as a member of the Local Government Association has been lobbying for a blacklist of rogue landlords and stronger sentencing for convicted landlords.
Part of the LGA's logic is that magistrates courts are only able to impose fines up to £5,000 and for many large landlords, this could be petty cash in terms of the overall size of their business. What the LGA overlooks is the fact that with over 100 laws and 400 additional regulations, there is a plethora of rules with which to bring bad landlords to book and whilst a magistrates court may have limited powers, the bigger cases go to crown court where these restrictions don't exist and 5 year jail terms are possible.
Local landlords were never impressed by the introduction of licensing for HMO's in the south of Portsmouth - there was little evidence that housing standards in that sector were worse than any other and little likelihood that the introduction of licensing would address the issues that councillors were struggling with: parking, rubbish and anti-social behaviour.
Against this background, our July meeting was our best attended ever when Bruce Lomax, Private Sector Housing Standards Manager at PCC and the man responsible for the scheme, came to talk to us and explain what it is that we get in return for the time and millions of pounds we have all invested supporting it.
The good news, announced in earlier articles, was that Bruce and his team were focussing their efforts on enforcement actions against some of the organisations many believe to be at the root of some of the issues in this sector.
The bad news is that we have heard nothing from Bruce since.
We do know that Red Vista were taken to court and found guilty, but also, that they are still in operation and Bruce's statement that 'once found guilty' he would be able to exclude them from the sector under 'fit and proper persons' rules does not appear to have been followed through.
We have also been contacted by Tenant Network and told that all actions against them have been dropped and Morgan Ebert, one of their directors, stated, "the case against us has been withdrawn and we are not connected in anyway shape or form with Red Vista" He added, "We are an ARLA registered Letting & Property Management company and consider ourselves to be completely above board and the case being brought against us by Portsmouth City Council has now been withdrawn"
After discussion at our last meeting about Residents Parking Zones (RPZ"s) and potential problems for local landlords I had a meeting with the Parking Operations team at PCC and hopefully the changes to RPZ"s will not impact us at all and some current problems will also be solved. Full details below:
Our friends at Upad have written a useful blog on handling tenant disputes which we reproduce here, as it may be of interest to some of our members:
"Couples split up and friends fall out, it"s a fact of life, but when your tenants start squabbling, when they each blame the other for damage to a property, what should you do?
The long running dispute between PCC (who believe that the 2004 Housing Act obliges them to give addresses of landlords of HMO's to anyone who asks) and the PDPLA (who argue that there are ways to avoid the fiasco whereby PCC 'sold' our addresses to Red Vista who apart from cold calling all of us, were then taken to court by PCC for operating outside of the law).
Last month we stated that the budget tax changes were not unexpected but that landlords on the Property 118 forum were raising a petition against the changes and we included details in case you wished to sign. Original article here.
We were somewhat surprised with the apoplexy from the people on Property118 when they read our article and many stated that we were doing our members a disservice by not supporting the petition wholeheartedly. This is something the PDPLA committee subsequently discussed and agreed that our original stance was balanced and appropriate - however, we do urge you to use one of the many calculators available to allow you to fully understand how you will be affected and also, to plan what action you will take.
There follows an excerpt from an RLA email on the topic with a link to their calculator and also, the response from the government (which they were obliged to produce once the Property 118 petition passed 10,000 signatures. At the time of going to press, they are around 15,000 now - so well short of the 100,000 required to gain a debate on the subject in the House of Commons).
You may be aware that the government intends to do away with the 10% wear and tear allowance as from 6th April 2016 and in its place allow only for the claiming of actual expenditure. Members who let fully furnished properties will be aware that rents for such properties do not normally exceed those for unfurnished properties and it is the most vulnerable, in many cases, that require fully furnished accommodation. The fair wear and tear allowance of 10% for such accommodation has been in existence for very many years (for as long as I have been a landlord) and is generous indeed. The affect of removing it will require all landlords to keep detailed records of their expenditure on such items that they would not have needed to have recorded in the past.
HMRC have stated they believe that the impact on individuals, i.e. landlords will be negligible, as they are already required to keep records of other expenses such as repair costs. That is an under estimate indeed, as some landlords have hundreds of tenancies where they provide full furnishings, etc and it will require detailed records to be kept, when HMRC itself has said it wishes to reduce the work in completing income tax returns. This regulation, if implemented, is the reversal of government policy and is not a negligible change, it is a significant change.
Amid press reports of a bumper number of new students going to University this year it is easy for student landlords to get excited and for those who are looking for first years to fill their remaining rooms, it should be a good year.
However, an increase this year has to be seen against the heavily capped intakes of 2012 and 2013 which are still working through the system, so overall numbers are still down. Also, as 1st years increasingly seek accommodation in student halls and new halls are being built to meet this need, established landlords will continue to focus on 2nd and 3rd years and those that stay longer - so this year"s intake will become more important next year for most landlords.
The important question is whether the current University system provides value to students and whether it has been set up to fail, because if it does, we landlords will get a share of the pain.
Lets look at this in 3 parts: Overall numbers, competing with student halls and how to find students to let to...
The NLA are running a course on the subject of possession here in Portsmouth on Thursday 24th September. (We presume they are talking about what we normally term re-possession rather than something you might need an exorcist to help with...)
Anyway, here is their blurb if you are interested in attending:
The Portsmouth Assessment Service (PAS) is based in Landport, Portsmouth and has been resolving anti-social behaviour and difficulties between neighbours in Portsmouth for the last 16 years. The service is independent, impartial and non-judgemental, working with all Portsmouth residents whether their home is provided by the Council or a housing association, privately owned or if they are owners, leaseholders or landlords.
There was a time when student landlords provided a furnished room and that was enough, but now with so many student halls providing en-suite accommodation with all bills covered, is it time to do the same?
Over the past few years, many landlord have started to include water, sewerage, TV licence and internet in the rent and more recently, it is becoming increasingly common to include gas and electricity charges too.
Do you know how much to add to the monthly rent when switching to fully inclusive? The Uni recommends students budget £15-20 per week for bills but does that mean we should be adding £60-80 per month to student rents? I know many of us add between £20 and £50 when switching to all-inclusive and most don"t make a loss by doing so - but then again, this is typically after just adding gas and electricity to what was already a fairly inclusive rental deal.
The Salvation Army Floating Support Service will be holding a partnership networking event on Tuesday 22nd September 2015 10am-12 midday at The Haven, Lake Road, Portsmouth to explore the topic of moving to private accommodation from the Single Persons Supported Housing Pathway. They have asked us to invite all landlords, they will be most welcome.
This month saw the announcement that the Green Deal Finance Company was to cease trading, effectively killing the already struggling Green Deal.
Introduced to help the government achieve its carbon reduction targets and never quite sure whether it was focussed on addressing fuel poverty or the introduction of energy efficiency measures, it has become a vehicle for many companies to generate good revenues to the benefit of very few.
We covered initiatives currently available from Portsmouth and Havant councils recently in our June newsletter (details here) and expect these now to come to an end.
We have avoided passing comment on the budget for several reasons, not least of which is the fact that by the time you read this it will be old news and also, most other publications and commentators have had their say, so if you wanted to understand the implications for you, we would hope you had plenty of opportunity to gain that understanding prior to receiving the monthly news.
However, in the past few days we have had multiple requests that we circulate a petition to our members objecting to the proposed tax changes. The petition has been created by members of the Property118 forum and it appears that the proposed changes have a major negative impact on many of their members.
The wording of one of the requests we received goes as follows:
If you commissioned someone to produce a documentary on the ethics and social impact of automation and the introduction of robots into modern society, you could do worse than Channel 4"s highly rated drama 'Humans" which is apparently its most popular programme since 'The Camomile Lawn" way back in 1992. It is thus surprising that when Channel 4 set out to create a real documentary entitled 'How to get a Council House" the result is less insightful or carefully crafted as an analysis of the situation than the aforementioned drama.
The 3 episodes of Channel 4"s 'How to Get a Council House" shown last month focussed on people in Portsmouth trying to get council homes. Generally, it showed the PCC employees as caring and professional but it did highlight some terrible housing standards - not all in the private sector - and some strange attitudes and expectations amongst those who find themselves in need.
However, in our view Channel 4 took too narrow a focus and their editorial team chose not to convey a full picture, so for those of you who may have seen the programme and be worried by the situation portrayed, several clarifications follow:
At our monthly meeting we heard from Bruce Lomax, Housing Standards Manager at PCC that rogue letting agent Red Vista was banned from managing or having any involvement with HMO accommodation in Portsmouth, after pleading guilty to exceeding the specified number of occupants in a licensed HMO.
This was on the grounds that, having a conviction under the Housing Act, this ensured they failed the 'fit and proper' persons test and as a result, would not be allowed to hold a licence to manage HMO's in the city.
However, the council appear to have back tracked and are now saying that Red Vista can manage HMO's on behalf of someone else but cannot be the licence holders themselves.
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.