Hundreds of Portsmouth Residents Face Eviction

When the details of the LibDem inspired Additional HMO Licensing Scheme in Portsmouth were announced we surveyed our members. 2 out of 3 respondents plan to leave the Portsmouth HMO market this year, reducing their portfolios by 348 rooms – extrapolated to the whole Portsmouth market, that could easily see 1,000 less homes in the city by year end.  

Many landlords are deciding to leave the shared housing market, but barriers to entry likely mean they can never be replaced. Once lost, rooms in shared housing are gone forever.

The Data

An estimated 20% of our members with HMOs responded to the survey, over 10% of our membership in total.

Of those who responded 35% focussed on HMOs let to professional tenants and those on benefits whilst 65% were student landlords

63.2% of respondents stated they planned to reduce their HMO portfolio in Portsmouth if Additional Licensing was introduced and only 5% were actively growing their portfolios (and we would class these as professional 'buy, extend/enhance and relet' specialists).

Each member was asked to highlight all the key reasons why they planned to reduce their investment in Portsmouth, the reasons highlighted were:

• 57% Additional Licensing introduction / creeping increases in standards
• 37% Section 21 withdrawal
• 32% Tax treatment of landlords
• 20% Other Government changes
• Other reasons, each with less than 5% of the total included mortgage rates, energy costs, council tax and 'landlord bashing'

Those who responded currently manage 833 HMO rooms in the city and when asked how many they expect to have by the end of this year, the figure reduced to 485. That is a loss of 348 rooms in the city or a near 42% reduction predominantly due, according to these respondents, to the introduction of Additional Licensing by the LibDem led Portsmouth City Council.

Translation for lay readers 

A landlord setting up an HMO in Portsmouth has 2 separate hurdles to cross, obtaining planning use (C4) then meeting HMO requirements. As planning is automatically refused if there are more than 10% within a 50 meter radius, it is inevitable that low cost housing will be lost.  A normal family house is termed as 'C3 use' in planning terms and an HMO is 'C4'.  

Around 10 years ago, the option of gaining 'C3/C4 shared use' from planning allowed landlords to switch existing HMO's into family use during years when, say, student numbers were down and switching back when the market recovered, allowing the necessary flexibility in the local marketplace. Sadly, many landlords are now seeing that to renew their C3/C4 status, they have a great deal of paperwork to provide and also a £500 bill - plus with the likely removal of 'Section 21' so called 'no fault evictions' many landlords are worried that if they let to a family, they will not be able to get their house back when they need it.

The 2nd hurdle is the proposed introduction of Additional Licensing for 3 and 4 bed HMOs citywide this September.  As was made clear at our January meeting, even seasoned landlords who had licenses on their small HMOs from 2013 to 2018 without issue, problem or incident are to be treated as rogues until they prove otherwise and are likely to face licensing charges of up to £3,400 per property unless they can prove that they are in the top 10% of landlords who will qualify for a 5-year licence as opposed to having to pay for an annual licence or similar.

Coupled with the introduction of Licensing for small HMOs, the standards and enforcement policies for all HMOs in the city have been rewritten, with many small / incremental changes which will mean that many properties that were fine when they were last licensed and which would be fine today in Southampton or Brighton, will need many thousands of pounds to be spent in order to meet the heightened local Portsmouth standards.

Sadly, the PDPLA considers that the net effect of all of these actions by the LibDem led Portsmouth City Council (but apparently with the support of all political parties) is that it will discriminate against single low income workers and students from modest backgrounds, driving them from perfectly acceptable and affordable homes in the city.

 Landlord Views

Maybe more enlightening than the raw data are some of the comments from individual members.

In no particular order and not edited, we let you draw your own conclusions:

Landlord 1: I have two other properties both 3 bedrooms trying to work with housing options as one has an elderly gentleman who can't get upstairs and needs warden assistance and the other with a family of 8 people. Since August last year and no signs of help. So issuing proceedings next week. Just making you aware as I feel the council needs some joined up policy of re housing rather than the excuse we don't have any suitable properties available!

Landlord 2: I'm a relatively new member of PDPLA and joined because I was being subjected to what I believe was unreasonable PCC regulation enforcement during the Covid pandemic a couple of years ago and having threats of court action and £30,000 fines because I was unable to find a builder and supply chain issues! I joined as I felt very isolated and to better inform me of new regulations. I now see I am not alone in my frustration with PCC and that many good landlords are experiencing the same!

Landlord 3: Having a 3/4 bed HMO is time consuming enough versus the income currently received. My fair HMO rent includes bills, with the ever increasing energy bills, attempting to make a reasonable/worthwhile profit is becoming nigh on impossible. Add to the fact that I have always complied to all the necessary rules and regulations imposed by PCC and government, am an accredited PCC Landlord adding HMO Licensing to small HMO's along with abolishing S21 will finally tip the scales for me to surrender/give up. Completely fed up that PCC do not go after the rogue landlords and give the good guys a hard time. If I rent to a family, will not have to chase 4 individuals for rent, have reduced costs in finding new tenants and will not have to pay utility bills and would make more money than I do now, will be less work, less stress and more stable income for myself.

Landlord 4: Totally unfair trading conditions with Student Halls - room sizes, fixed terms agreements, Council Tax, tourists lettings to the detriment of the residents and local hotels, B&B's who do pay Council Tax. If the Corporate Landlords paid their way the Council coffers would be overflowing and services reinstated for Portsmouth Residents. Revoking Dual C3/C4 to be reinstated at £492 per house and conditions vary on whoever in PCC planning is dealing with the property (has to be money making exercise). So far having to wait 6 months to the day for reinstatement of C3/C4 - and still waiting. Not able to revert to C3 over summer months to help housing shortage and help cover mortgage and other outgoings - could / would have lost C4. Want to put property on market now to get sale agreed for 7th April - but can't still waiting for C3/C4. As opposed to the rental in Halls PCC are piling more expense on to student HMO landlords who charge much less. The amount of work involved - the annual profit margin is diminishing dramatically even more so now that mortgage rates have increased and Section 24 payments will follow increase accordingly. Between unfair trading conditions and PCC It is not worth owning an HMO - already sold 3 (12 rooms) in last 18 months to 2 years and now selling up remainder of Portfolio. What it comes down to is PCC want to get rid of C4's from the market and it is very apparent in how they are treating HMO landlords and how they are bending over backwards for the Corporate Landlords

Landlord 5: Will be switching to family lets after 22 years with HMOS and nearly 100 years as a Portsmouth corporate landlord

Landlord 6: Are you going up market? (Fewer bigger rooms / more expensive) To make the rooms bigger in our 4-bedroom property would require substantial investment, as existing we would be forced to make it a house for 3 sharer, new space standards mean that both reception rooms would be required for communal space. This is unlikely to work with bills inclusive rent and increased mortgage costs, costs for licencing, two smaller rooms. My options would be to a invest in an rear extension, take out the chimney stacks, expensive remodelling to maintain 4 bedrooms but increase communal space to keep it in the HMO market, given that expense, why not go the extra and extend upwards into the roof and over develop the house as has been done to a similar property close by and increase the number of bedrooms to cover costs. Option B let to a family, this would also require expense and proposed changes to section 21 makes this more risky. Option C sell.

Landlord 7: Just as a note, I'm not complaining, but we have not been inspected once during this last licencing cycle..

Landlord 8: Student interest in our property to be fair is the most pressing concern at the moment, the University support of students looking to rent in the private sector seems to be less. Housing fairs are a disappointment.

Landlord 9: I am planning on changing direction in the forthcoming year, as it is becoming almost impossible to run as an ongoing feasible business. Having just paid full planning fees to 'renew' dual C3/C4 status ( which I might add, was never date-stamped to only last for 10 years when it was issued ) I had thought of changing to family lets. However, the new regulations regarding Section 21 , make me feel dubious about ever being able to get my property back if I went ahead with that. The additional burden of licensing, and potentially having to further upgrade properties to meet ever -higher standards, at what seems to be the whim of the Council, makes me realise I cannot stay in this business. Despite what I read in the press about rising rents, I have dropped my rents by some margin this year in order to retain students in a difficult market. So, with income falling, costs rising and a squeeze on tax in the middle, I have come to a decision and will sell property this year, thus removing reasonably -priced student rental rooms from the market place, and forcing more students to accept the option of expensive private halls of residence, on longer leases than many of them want, at highly inflated prices that not all of them can afford.

Landlord 10: With my remaining 3 non C4 HMOs, I am going to try and sell one of them this year and change one to a family let, as it's just too onerous operating within their changed rules, yet again. I have been an HMO landlord for 18 years of 8 houses, and I manage two other C4 HMOs, we also have two flats outside of Portsmouth, which are so much easier to manage. I appreciate the returns are better but it's just not worth the hassle, so one way or another, I will be getting out of the hmo market as soon as possible.

Landlord 11: Due to the new "rules" and costs that may come from it, I will have to consider my future involvement in Portsmouth HMO's, losing 8 rooms straight away from the area's "stock". Should I decide to continue I would anticipate a 20%+ increase in rent to cover likely expenses. Saying it will only cost 50p/per tenant/month is belittling to landlords as the new standards clearly have been formulated taking no account of the type and size of houses in the City and the changes that may be needed. There is no mention of a reference document used to write the guidance.

Landlord 12: Currently not planning to change but may go to couples instead of sharers if I have to suffer the Council inspections with totally silly useless people as we all endured last time around. I can still picture the Australian girl with her tape measure measuring the gap at the top of a bedroom door and the Irish man who insisted on bring his bicycle into the hall and calling me 'madam' every other word. At least I expect qualified people who know more about buildings than I do, not just a tick list.

Landlord 13: It is about time that the Government and Local Council treated the Private Rental Sector as necessary to the economy as they are unable/unwilling to house so many types of people. When single young professionals leave home for work where are they supposed to live??? Their only option is shared houses. How many young professionals are out there??

Landlord 14: I am waiting to hear what the charges will be for the PCC new licencing and I am planning to pass any charges onto tenants as another 'Utility' bill. I will write to them all with all of the details of the scheme when I know what the fees will be. The other thing that drives me potty is dealing with the Council Tax people. How many letters and emails can we all write.......