Portsmouth Killed Landlord Business
Portsmouth City Council will no doubt be ecstatic to hear that, having been a student HMO landlord for 20 years (I was one of the first people to join the now defunct PCC Accreditation Scheme) their current policies have killed my business off completely, combined with the increase of mortgage rates, and I am down to my last couple of houses which will also be going on the market. I have also been on StudentPad for all those years who inspected and passed my houses, as did PCC Housing Department when it was run by Bruce Lomax - showing that until recently my properties met all of the standards set by both PCC and the University.
How Did This Happen
Landlords took on dreary unloved Victorian housing and spent a lot of money getting them up to the standard required in todays letting market whilst also meeting PCC's regulations and standards as well as those of the University, as that institution expanded.
I joined the local Landlords Association and over those 20 years I helped arrange monthly speakers and took 187 sets of
verbatim Minutes, instilling into the membership good landlord practice and listening to advice from many experts including Bruce Lomax who headed the private housing team back then, other PCC personnel and various trades people.
With the introduction of Licensing and Accreditation, I now have to prove I am a decent, and respectable landlord. At quite a
cost of course. £200+ per house for a fire risk assessment. £1200 to pay somebody who knows how to deal with
the PCC bureaucracy and licencing on my behalf. Then there is a Licence fee on top to pay. This varies
from 1 year, 2 and half years and 5 years. I wonder how many landlords will get the cheaper 5 year License!!!
I sincerely hope the person who comes round to inspect my properties has some knowledge and experience and has had more than a few
weeks training. PCC have always relied on training new recruits by giving them a pile of manuals and then getting them to follow someone for a couple of weeks - the person followed often have no more training than that themselves. The amount we are having to pay this time - I would hope that no one crosses my threshold without appropriate CIEH or RICS qualifications. As a result of the old way of training staff, I was asked a few years ago to put in a complete new set of bannisters – JUST IN CASE a small child or baby was brought to the house who might fall through the larger opening between the spindles. I cannot remember the cost, but I remember it was considerable.
My wish was to move overseas to retire leaving my houses in the hands of my loyal local managers \ workmen etc - who have been working for me on an annual basis for those 20 years. Everything is checked and dealt with. But due to the requirements of Accreditation, this will now have to be an extended holiday and I have to move my base back to the UK. I have no choice.
If I do want to retire overseas, I must pass my properties onto an Accredited Agent - paying that Agent something in the region of 14% for him to collect the rent on my behalf, that was automatically being paid into my property account, plus using their workmen to do any work and being billed with a 14% fee charge on top. Plus also I nearly forgot, checking the smoke alarms every 2 months – at a cost of course plus the agents 14% fee. What a waste of time and money…………
Those viewing my houses which have been or are being sold are mostly from overseas – and some I am given to believe are local business men, whose idea is 'let's get it as cheap as possible' - cash buyers I might add - and bring that to your attention - offering £50,000 - £60,000 less than their actual value. I am not sure I know too many people who have over £200,000 in cash readily available these days. Does PCC and the Government realise what a can of worms they are actually opening. Killing off long standing good landlords for an unknown quantity of get rich quick developers who know they can gut a perfectly good 3 or 4 bed terraced house and turn it into an 8 or 9 bed super-HMO for an immediate return.
People like me bought property to boost their pensions with the equity accrued while providing a worthwhile service. But Section 24, paying tax on mortgage payments which are clearly a property expense, and then 28% CGT on the sale proceeds has killed that off as well.. Our idea was not to lean on The State and have a little security in our older years. The State is leaning on us instead. The Capital Gains Relief Tax having been reduced from £12,600 to £3000 plus the 28% doesn't leave much left on a sale with Agents and Solicitors costs and the repayment of any mortgage. to meet as well. With a time-limit to pay the 28% CGT to the Government plus of course Accountants' fees to also take into account.
I am still getting calls from really desperate students, looking for somewhere to live who are unable to afford the huge Corporate Landlords Halls of Residence rentals - although the Corporate Landlords pay no council tax and have kept the ability to do Academic Year Tenancy Agreements, which I am no longer allowed to do. WHY NOT because they have different Planning? They are housing students the same as us and perhaps rather than killing us off they should be looking to extending that planning to current student HMO's so that we are not discriminated against all the time, and I find it disturbing to say the least at being looked at as a rogue Landlord.
So, it is very apparent where Portsmouth City Council's loyalties lie – with the Huge Corporate Landlords, not with the local residents, and definitely not with the local landlord. It actually means that the Student HMO no longer exists in the private rented sector., because extending the rights of the students to remain after the academic year, thus making it a periodic tenancy, makes the whole business untenable. So where does the student HMO lie in the current C4 planning?
More Student Halls are being built plus they can also do holiday lettings over the summer because of their planning. Taking away business from your actual Council Taxpayers, B&B's and Hotels and companies who also have served this market in the past. I did have Dual planning C3 (family combined with C4 (HMO) for a considerable number of years, which PCC revoked. I am not totally sure for what reason – but - It then got reinstated at a cost of £491 per property, which I paid instantly but It took PCC's Planning Department 14 months for me to get the letter to advise me my property had the same planning for C3/C4 that I already had for years. I know that this hold up cost me the sale of a house. Again, I paid to get that dealt with because of all the bureaucracy involved. That was another £1200.
I have been advised the student halls that could have been used to house homeless people are not suitable. They appear to be suitable for students, however. The question here is, where does PCC expect to find property for their homeless singles and homeless families???? Ex student HMO's I guess is the answer.
Apparently, PCC were looking for a balanced community and we underwent a percentage ruling so HMO's were spread evenly throughout roads. Having students in the area provided revenue for the local shops and Taxi Drivers and of course the local labour force. Yes, they were not all perfect and could be noisy.
Can I question please where PCC's loyalties lie because it is not with the Local Labour Force either who we local landlords have supported over the years. – to quote a few, builders, roofers, Central Heating Engineers, Electrical Engineers, Painters and Decorators. What is going to happen to them? Having spoken to my builder he said landlord work had already dropped off. He has a family to support.
Corporate Landlords have their own labour force. So again. PCC's loyalties lie with the Huge Corporate Landlords not with the local workforce many of whom are actual Portsmouth residents.
Smoke Alarm systems – I can only speak for myself here. Originally The Fire Brigade inspected and advised battery operated Smoke Alarms were appropriate. – Easy replacing a battery. PCC did not agree. We had to install what they wanted. Having done that we were then instructed they had to be hard wired. Then we were instructed the smoke alarms had to be interlinked. Then we were told to remove the kitchen smoke alarm and install a heat sensor which then had to be interlinked to the alarm system. Again at considerable cost because of the change of regulations.
Now we are instructed the complete system has to be checked every 2 months. My electrician would have done that for me at a minimal cost, but if I do retire abroad I have to go through an Accredited agent and have a bill plus a 14% Agent Fee.
Portable Appliance Testing – called PAT Testing. A total expensive farce. Each electrical appliance we supply has to be PAT tested on a biannual basis and each item tested has a charge attached, together with an overall charge for doing the testing. Each appliance has a little label attached to the plug with the date it was done. Each house has a Utility Board so a quick look at the utility board where each switch shows its locality would show instantly where the fault was. Of course this is chargeable - the classic is - the work done is only valid for the day it was done. Pat Testing is only on the landlord's electrical items. Tenants can bring in their own untested items. So, we face maybe a fire
risk because of faulty appliances brought in by tenants. Curling tongs are the best – they also burn into the top of the
wooden items we supply.
May I suggest PCC look at the bigger picture of the outcome of their current policies. You will kill off students coming to Portsmouth University because you will have killed off student HMO's in the Private Rented Sector who are able to offer cheaper rents and not every student can afford the expensive Residential Halls rents. We don't offer a gym or swimming pool - big deal........ Only those who can afford the Corporate
Landlords rents will be coming, is my guess. They will be leaving with a huge student debt.
This will also affect the intake rate of students coming to Portsmouth University if all that can be offered are the expensive Halls of Residence. This is a fact. If the odd HMO remains any students who want to stay on after their studies have completed can do so, which never was the case with a fixed term academic year tenancy – so we are being discriminated against by Planning. It also makes it impossible for a landlord to undertake any works or upgrading if tenants stay on, or able to fill spaces in advance for the coming year, my guess is there cannot be any
more student fairs either. How can we take a group on, sign them up and then at the last minute be advised by students they have decided to stay on – sorry… This has legal implications for the landlord perhaps leaving them open to being sued.
This then brings in the Council Tax complications of which there are many already. Single tenancy agreements, joint tenancy agreements, joint and several agreements no more Assured Shorthold tenancies plus the problems with mixed student and non-student houses. A non-student is responsible for the entire Council Tax because the students' council tax is waived whilst they are attending a course. As soon as the course ends council tax becomes payable by them, even if it is for one day and it also depends on what sort of tenancy agreements are in place. This
is going to be a nightmare for Council Tax but also for the landlord depending on what type of tenancy is in place who has the responsibility of paying outstanding Council Tax.
Mortgage lenders like a student Joint and Several Tenancy so the full rent is payable, and the landlord can pay their mortgage. So how are mortgage lenders going to deal with all these changes.
Do I really need to point all this out to Portsmouth City Council Members? Has nobody thought of the ramifications.