Newsletter News

Over the last few months various pressure groups, think tanks and political parties have been raising the possibility of bringing in rent controls in the private sector in the UK, and Cambridge University have been asked to consider what the practical impact of these proposals might be on landlords.

In order to do this, they need to fill gaps in the existing knowledge of the situation of landlords, and they are asking landlords across England to complete an online survey. The survey covers topics such as tenancy lengths, rent setting and rent increases. If we are to get some balance into this debate and ensure that organisations such as Citizens Advice and Shelter stop coming to inaccurate conclusions which result in further regulation of the PRS, we urge you to complete the survey.

Take the Survey

At this months meeting of the Governance Board of the Portsmouth CC Additional Licensing scheme it was apparent that previous concerns about poor communicatons and inconsistent standards appear to have been addressed.  However of the 120+ homes so far inspected, only 42 had passed without recommendations of some form which of course will be interpreted as 2 out of 3 homes have been improved as a result of this scheme.

Following on from the items on Council Tax in our November and December newsletters (see latter item here), it was confirmed at a recent meeting with staff of the UoP (University of Portsmouth) Student Housing team that:
- PCC obtain information on full-time students within the PO1-PO6 postcodes via a report that is shared by UoP systems and as a result, greater accuracy of student exemptions from Council Tax liability can be maintained
- The academic year for final year students ends on May 31st. More information on term dates can be found at http://port.ac.uk/key-dates/
- So if you have final year students contracted for 10 months from September to June, then you should expect a council tax bill for the month of June for all houses with final year students

Wilkins Kennedy has developed a year end personal tax planner which helps you to identify the planning opportunities that should be reviewed before the end of the current tax year. Also they have included in section 6 details of some changes which have been announced and come into effect for 2015/16.

At this month's Governance Board meeting of the Portsmouth Council HMO Licensing Scheme, Rachel Geary, manager of the University of Portsmouth Student Housing team stated that she expected, " the new intake for 2015/16 to be similar to 2014/15".

PDPLA members Mark Smith and Allan Wadsworth have managed to get the bestselling author and nationally famous  'HMO Daddy' to their next meeting of Hampshire Property Network in Fareham....

We are very pleased to have added another name to our Preferred Traders List and that is John Gray, a Gas Safe Registered heating engineer. He repairs and services boilers, does Landlord Safety Certificates and inspections and deals with all aspects of central heating controls. He will also supply and fit radiators and undertake fault diagnosis.

A long and technical debate in the House of Lords this week (Feb 11) ended with amendments to the Deregulation Bill being passed which are likely to lead to the outlawing of so-called retaliatory evictions.

Although the amended legislation has to be ratified by the Commons and then receive the Royal Assent, in essence the Lords agreed that landlords would be prevented from evicting a tenant for no reason within six months of receiving an improvement or hazard awareness notice. This could mean that becomes impossible to successfully serve a Section 21 notice as a tenant only needs to complain about a maintenance item for the S.21 to become invalid.

This months PDPLA members meeting had scheduled a networking session on 'rent arrears', but senior member Mark Smith delivered a masterclass on the subject. Members were taken on a whirlwind tour of a rent arrears checklist which covered everything from selecting a tenant, the importance of guarantors, how to react when rent is one or two days late, actions to take at 7, 14 and 21 days past due and should all of that fail, how to instigate legal actions and which ones are most successful and what other measures need to be taken, which organisations to use, etc.

The Portsmouth City Council Green Deal Team currently have funding to provide a grant of up to £1,500 towards a replacement boiler or new central heating system for private sector households across Portsmouth. To begin with they will offer this to homes with an occupant aged 65 or over.  Gillian Flaherty, PCC Green Deal Project Manager added, "However we may include other vulnerable groups at a later date. We can only provide funding where the current boiler at the property is non-condensing, and as a rough guide this will generally apply to boilers over 10 years old."

At our January members meeting, Alwin led the networking session and the discussion focussed on the PDPLA involvement at the student housing fair at the end of January to be held in the Student Union building. As a result, the PDPLA stand at the fair was manned by seven members - all wearing PDPLA sweatshirts with their names on the front and the tag line 'No Agency Fees' on the back. 

The Residential Landlords' Association has launched its own election manifesto focused on improving the lot of both tenants and landlords in the private rented sector (PRS) - including longer tenancies, encouraging sales of rental properties to first time buyers, and tougher enforcement against rogue landlords.

At this months meeting of PRED (Portsmouth City Council's committee responsible for Portsmouth's Regeneration and Economic Development) various councillors petitioned for the Article 4 Direction which limits the number of HMO's in any area to 10% to be tightened up.

New Legislation to Allow Tenants to Live Rent Free - yes really

Universal Credit - Worries about experience with direct payments

Selling HMO License Details - Issue raised nationally

Tenancy Deposit Rulings - Yet more concerns for old tenancies

For those who missed our January meeting, you will not have heard about the fire in one of Martyn Winfield's properties. A student tenant was studying in his front upstairs room on December 28th when he heard the fire alarm. He assumed it was a fellow housemate cooking (why can't most students cook without incinerating?) and he ignored the alarms. A little while later, when he heard what transpired to be aerosol cans exploding in the flames, he left his room to check on the disturbance and realised the house was on fire.

At this months PDPLA members meeting both Elaine Bastable and Lucy Smith from Portsmouth City Council (PCC) Housing Options team spoke to us about how they can work with us to find homes for families that would otherwise be homeless through their bond guarantee scheme, Access. 

Good news for local landlords from our friends at TP Expert today, who have just heard that one of their planning appeals has confirmed that HMO's do have permitted development rights (as many councils have sought to restrict or remove them from HMO's as part of their attempts to control and limit the spread and size of HMO's).

In a month when Europe drops into what could be a deflationary spiral,  oil halves in price compared to just a few months ago and retailers report falling prices in the UK, it should surprise no one that house prices may well follow. The Centre for Economics and Business Research (CEBR) is predicting prices will fall 0.6% in the year ahead, with London seeing the first marked falls for more than five years. Prices in the capital are expected to fall by 3.3%.

Our preferred insurer, Alan Boswell Group, is thrilled to announce that they have been voted 'General Supplier of the Year' in the prestigious Landlord & Letting Awards for the second year running.

The awards, which were introduced in 2009 with the aim of recognising and rewarding excellence and contribute to raising standards in the private rented sector, were held in Coventry and hosted by TV favourite Tommy Walsh. They beat off stiff competition to win the award at the ceremony.

Last month we raised concerns about Portsmouth City Council selling addresses of landlords who own or manage HMO's in the southern half of the city.  The original article can be viewed here.

We subsequently proposed what we believed was an interpretation of the law which would meet the needs of the council and all other users of the HMO register whilst avoiding the issues raised by our members. Unfortunately, the Council have chosen not to accept this interpretation and continue to sell our addresses to anyone who wants them.

Following on from our piece last month, entitled Portsmouth Council Tax Student Homes (read the item here), we have had confirmation of some of the details from Ed Woodhouse, Head of Revenues and Benefits at Portsmouth City Council. The key message is that if we have an empty house with no tenants during the summer, or if we use it for holiday lets, then we should be declaring this and paying Council Tax. Conversely, if we have full time students for the whole year, then we are not liable for any Council Tax.

The Portsmouth & District Private Landlords Association (PDPLA) acting chairman, Martin Silman, has built a house!  Granted it is not as grand or as large as the properties owned or built by many of our other members but in a city which is only building one third of the new properties it requires, any new build is to be welcomed.  Mr. Silman admitted he was careful to keep the value low so as to avoid Stamp Duty Land Tax and that having given it to a younger relative he is concerned that he may have breached the rules on gifting, plus he may have given the young relative a capital gains issue.

Many landlords have struggled to explain to local councils that small bedrooms are OK and that many people in HMO's are happy to take a small room if it means they pay less in rent. There has been much debate about whether 'guidance' that rooms should be a minimum of 6.5 sq. metres (70 sq ft) should be enforced or not. In a surprising turn, central government in the form of the Department of Work and Pensions has ruled that any room big enough to contain a single bed can be used as a bedroom.

In Charalambous and another v Maureen Rosairie NG and another [2014] EWCA Civ 1604, the Court of Appeal held that a landlord was not required to pay a rent deposit in respect of an assured shorthold tenancy into an authorised scheme, where there was no authorised scheme at the time the deposit was received. However, the landlord could only make use of the procedure in section 21 of the Housing Act 1988 to end the AST if the deposit was returned to the tenant, or possibly if it had been protected in an authorised scheme at the time the notice was served.

We were going to write a review of the year, but the Southern Landlords Association (SLA) did such a good job with theirs we have decided to include it here in its entirety:

What a year we landlords have had; constant amendments to rules and regulations have made it difficult for all to keep up:

In last months article on the top 3 areas where landlords get it wrong when making self-assessment submissions for their annual tax return (original article here ) we appear to have made a mistake ourselves!

In section on "Flipping between wear and tear and renewals" we stated that flipping between using the 10% wear and tear allowance to claiming for individual renewals was not permitted but you could still opt to claim for renewals of furniture etc as incurred.THIS IS NO LONGER CORRECT.

Shelter launched their latest report on PRS Standards this month in the House of Commons. Much of the statistical evidence and proposals were reheated from previous reports. Find the report here.

Following a recent drugs caution in the South Warnborough area, Hampshire Police are reminding members of the public, particularly landlords, that drug offences can occur in any house, in any street and the importance of reporting any suspicious activity to Police on 101. This recent incident was aided by members of the public being the eyes and ears of the neighbourhood and voicing their concerns to officers; demonstrating how important it is to report to Police anything suspicious in your area.

They have issued the following advice on how to spot a cannabis factory.

http://www.hampshire.police.uk/internet/asset/a1aed19a-22b1-4e7d-98a8-fde2f2c83a0A/24977%20Illicit%20labs%20FINAL%202013.pdf

 

Amid all the media coverage of skyrocketing house prices, there is very little talk about house prices in real terms. In most parts of the country, house prices are back to or near their 2007 levels, but £100 in 2007  would buy the same as £126.20 today, so in real terms house prices are still down 20% from their peak. The big question with an election coming in a few months, is which political party is most friendly to landlords?

The PDPLA, urged on by its members, constantly asks Portsmouth Council to focus on eradicating the few rogue landlords in the city rather than use the HMO licensing regime as a vehicle to increase the workload of the very many good landlords.

The following tips from our friends at Churchers Bolitho Way:

When PCC spoke to us a year or so ago, they made it clear that under new rules which allow them to vary council tax exemptions, they were allowed to collect council tax for student houses during the summer - but it was also apparent that they did not have the manpower or resources to go after these properties pro-actively.

This meant that some properties received council tax demands and others have not.

Portsmouth City Council have interpreted the Housing Act such that they are selling a copy of the HMO licensing database, including names and addresses of landlords to anyone who asks for it at a price of £200.

On Friday 28th November MPs debated the Tenancies Reform Bill. This sought to ban so-called retaliatory evictions by limiting landlords' use of section 21 notices where tenants had lodged property condition complaints with the local authority.

The discounted fees for accredited landlords and those taking benefits claimants were removed in the annual review of fees. PCC's argument being that most landlords who have yet to apply are late in doing so and thus not deserving of special treatment.

This month we had a situation where a member issued a Section 21 to a tenant and was unclear on whether the council should rehouse that tenant or not.

We often see debates or assertions that because tenants are on individual AST's you are operating a bedsit like hostel and you are liable for all taxes / charges whereas if the tenants are all on a joint AST, they are obviously a group of friends sharing a house and they are liable for any taxes or charges. We all know that in reality, there is no link whatsoever between how we choose to contract and how the house is managed.

A landlord who flouted the law, has been ordered to pay a £280k fine for ignoring orders to demolish an outbuilding. The building was deemed as not fit for housing and was built without any planning permission. The landlord turned an outbuilding of his property into six tiny flats over 5 years ago. In the same year the council told him to stop using the outbuilding as flats and to remove the bathrooms and kitchens.

Welcome to the new PDPLA website - with live newsfeed and updated information.

Many letting agents who manage properties in Portsmouth are asking landlords to apply for HMO licenses for their houses as the agents don't want to be named on the licence as the responsible party should there be a problem.

At this month's meeting of the Portsmouth Housing partnership, council officers made it clear that it does not matter whether a landlord or his managing agent are named on the licence. If there is a problem resulting in court action, prohibition orders or whatever, any paper will be served on BOTH parties.

A recent article in Property Week highlights claims by a London property manager that up to 60% of leaseholders and this includes residential landlords, are being 'ripped off' and are paying inflated building insurance premiums. Chainbow, which manages sites across the south-east, said building insurance scams are one of the most widespread examples of malpractice by managing agents and freeholders.

Which magazine are campaigning for more transparency in the mortgage market. They ask that the Chancellor to use his Autumn Statement on in December to give consumers a better deal by..

These are courtesy of Julian but paraphrased for publication.

Repairs and renewals versus improvement

The HMRC makes a clear distinction between 'repairs and renewals' for a property and capital expenditure or 'improvement' and many landlords find this an area of confusion.

"I think a lot of landlords don't realise the difference between the two types of expense and just see all costs as legitimate expenses that they can offset against their income tax, but we have to sit them down and explain there's a difference," says Sudipta.

Landlords can now use a new mandatory ground for possession that allows previous convictions for anti-social behaviour to trigger eviction proceedings. This applies to social and private landlords.

What may seem trivial can easily become critical. A blown light bulb one week could be a multi-million pound law suit the next. A loose bannister could lose you your savings.

Keeping your properties safe and free from health hazards may sound obvious but the reality is that they can be too often ignored, often with disastrous results.

The head of one of the three mandatory redress schemes in the rental sector insists that, contrary to suggestions from some in the industry, "a significant proportion" of letting agents have yet to join. Sean Hooker, property ombudsman at the Property Redress Scheme - one of the mandatory schemes alongside The Property Ombudsman and Ombudsman Services - says confusion over how many agents have signed up to one or other of the schemes is down to a continuing lack of clarity over who is regarded as an 'agent'.

Many landlords, often due to experience, do not let to tenants with pets, particularly dogs and cats, with pet-friendly accommodation often difficult to find for tenants, as landlords are concerned on possible damage.

With an election coming next May, we all need to do what we can to balance some of the rubbish being pushed out by ALL political parties in search of votes.

The sidebar page comes from the newsletter of local LibDem councilor Lee Hunt but we also have Conservative leader at PCC, Donna Jones giving TV interviews saying ALL students should be housed in Halls and we are increasingly seeing Labour calls for rent caps, mandatory registration of landlords, longer tenancies and a number of other potentially costly reforms.

What can you do?

Portsmouth City Council licensing team have started inspecting all houses thus far licensed. We have questioned the value of this but apparently, part of the reason for the high cost of the scheme compared to, say, Southampton, is that they costed in these checks.

We have had some good reports of houses passed without problems but also, some inconsistencies - some inspectors are happy for the licence info to be 'somewhere in the house' whereas others specify that it must be hung on the wall in the entrance hallway somewhere.