Recent news items of interest to local landlords, use the search option above to find specific topics.
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.
Accreditation schemes are often proposed as a 'soft touch" alternative to regulatory controls such as licensing schemes and they aim to improve the quality of service offered by landlords and assure the standard of accommodation offered.
Landlord accreditation can take 2 forms - most often, it shows that the landlord has been educated in the rights and wrongs of lettings, knows his or her legal obligations and has been shown to operate in a professional manner. Additionally, some schemes also use the accreditation process as a way to vet and confirm that the standard of housing which is let by that landlord is appropriate. When it works effectively, it allows prospective tenants to quickly identify which landlords can be relied upon, it gives the council a pool of landlords which it will use before others and those accredited can charge a premium reflecting their professionalism.
Unfortunately, many schemes fall short of these aims. Members pay good money to belong to the scheme yet in return, the administrator does no marketing to explain the value of the accreditation either to prospective tenants or other landlords, accreditation is awarded based on a 'tick box' approach where having attended a course or read a module is deemed sufficient to achieve the necessary standard with no checks to assess whether the landlord actually understood the material or more importantly, has put it into practice in his daily practice and local councils rarely offer preferential access to their accredited landlords.
We are very pleased to welcome a new Trader this month and that is Wilts Electrical, who are based in The Pompey Centre in Portsmouth.
Wilts are an Electrical Wholesaler who agreed to give PDPLA members a cash account. PDPLA members using the Wilts discount cards will get discounted prices compared to normal cash purchases.
With an unpredicted Tory majority in government should we all breathe a sigh of relief that the LibDems mansion tax and the labour rent controls are a thing of the past? Maybe, but with George Osborne"s post-election budget coming up on the 8th July, perhaps we should wait a few days before breathing that sigh of relief.
Why? Well - firstly it is a well-known fact that all landlords are paranoid and fear the worst outcome in every situation. This may not be the case for new 'optimistic" landlords starting out with confident predictions of 12 - 15% yields, but after a few years of bad tenants, voids, unexpected repairs, flat rents falling behind inflation, rising insurance premiums and ever increasing regulation, it may be understandable for the rest of us.
But what grounds do we have for such pessimism? The chancellor is looking to save £12Bn from the Welfare Bill towards a budget deficit of £75Bn - so those of us reliant on housing benefit tenants may have grounds for concern, but with many people able to 'earn" more from their tax credits than they do from their jobs, cuts in this area - which have been widely predicted, may affect many more tenants than those perceived as the 'Housing Benefit" market.
The Leigh Park Community Led Planning Group are organising a 'Clean Up For Summer Week' from 13th-19th July 2015 in Leigh Park and surrounding areas, to help make public spaces in Leigh Park clean and ready for summer.
Our friends at The Roberts Centre have asked us to let you know that Harrow Choral Society are coming to Portsmouth to put on a concert with free admission and a retiring collection for the Roberts Centre and Portsmouth Cathedral.
Various local agencies came together at the June meeting of the PDPLA (Portsmouth & District Private Landlords Association) to discuss how to manage anti-social behaviour. Bruce Lomax, Housing Standards Manager at Portsmouth City Council said, "It is no good just evicting bad tenants, that just moves the problem somewhere else. We need to find ways to solve the problems that are causing the bad behaviour."
As an example of that Gemma Moreau, who works in PCC Housing Standards outlined the work her team has been doing to bring home owners, landlords and student tenants together in one area of the city and thus avoid some of the problems that can occur in these situations. (We have Gemma's contact details should anyone wish to speak with her).
Opening times have changed at recycling centres
From 1 April 2015 opening times at Hampshire"s household waste recycling centres (HWRCs) have changed to reflect peak usage.
The new opening hours are:
*Efford HWRC will continue to close at 4.30pm during Spring and Summer in line with the site"s planning conditions.
In selecting the revised opening hours, a balance has been sought between delivering cost savings to the County Council at a time of severe financial constraints, and maintaining a valuable service to householders.
For other sites, see below.
Some people need a little help to set up home when moving into private accommodation, or a council property. The Portsmouth Salvation Army team can support them to improve their lifestyles or maintain independent accommodation and in the process, provide a valuable service helping local landlords manage their tenants with the minimum of problems or issues.
The dedicated team of workers can provide support in a flexible person-centred way, helping local landlords avoid problems with new tenants who otherwise they might avoid.
According to the NLA, in the first six months after the Land Registry had launched its Property Alert service this year, more than 12,000 people had signed up to the free service which provides an early warning of suspicious activity relating to someone's property in England or Wales.
Property fraudsters are increasingly sophisticated in the ways they attempt to acquire ownership of a property in order to either sell it and take the proceeds or raise money by mortgaging the property without the owner's knowledge before disappearing with the money.
Following on from our March announcement of free boiler upgrades for the elderly and vulnerable,( http://pdpla.com/newsletter-news/free-boiler-upgrades-for-elderly-vulnerable-in-portsmouth), Portsmouth City Council has extended the scheme to all households in the city. In addition, Havant have reminded us that their scheme only runs until August 31st, so wherever your properties are you need to act quickly if you want to benefit from these free handouts.
In Portsmouth, any house with a boiler that is more than 10 years old is likely to qualify for a grant of up to £1,500 towards a new boiler though it needs to be replaced under the green deal scheme.
Havant and East Hampshire, offers 50% cashback on solid wall insulation and 25% cashback on a range of other energy-saving measures including new boilers, double glazing and cavity wall insulation.
In both cases this is funded as part of the Green Deal and to qualify, your property will need a Green Deal Assessment and works will need to be carried out by approved contractors.
The number of tenants evicted from their homes is at a six year high as rising rents and cuts to benefits make tenancies increasingly unaffordable.
County court bailiffs in England and Wales evicted more than 11,000 families in the first three months of 2015,an increase of 8% on the same period last year and 51% more than five years ago, according to Damien Gayle in The Guardian.
One interesting statistic shows that Housing Associations evicted a far higher proportion than private landlords.
The Co-operative Bank has sold part of Optimum residential mortgages portfolio in a bid to reduce its risk profile and build resilience.
The lender has completed the first part of a securitisation process to sell a portion of the Optimum loan book that it took on after acquiring the Britannia Building Society in 2009.
The Deposit Protection Service (The DPS) has advised landlords and letting agents to act soon over older tenancy deposits now that new legislation has introduced a deadline for their protection.
Following the Deregulation Act, which passed into law at the end of March, landlords have until 23 June 2015 to protect deposits that were taken before 6 April 2007 and which they are still holding for periodic tenancies agreed on or after that date.
Periodic tenancies are those which continue on a period-by-period basis once the term specified in the original agreement has passed.
If you have a property in the south of Portsmouth (PO1/PO4/PO5) which you let to 3 or more unrelated people, regardless of how you contract, then this property is classed as an HMO and needs to be licensed. Click here for more information. Additionally, some converted houses which are now let as flats or smaller units may also need to be licensed (this is the case if the property meets the definition of what is known as a section 257 property).
As part of this licensing scheme, we understand that enforcement actions may stop some letting agents from managing this type of property and also, some landlords will no longer be allowed to manage their properties unless they use an approved agent.
If you own a property managed by an agent who has been denied a licence to manage an HMO, then you will either need to manage the property yourself or appoint a new agent. As a landlord, you are responsible for a number of items which your agent has probably managed for you and it is important that you are aware of these items and take the necessary actions to avoid costs or legal problems in the future.
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.