Tag Archives: HMO

It’s been a busy year…

From our Save Housing campaign against Article 4 directions to our NLA Landlord Live show, it has been another busy year at the National Landlords Association.  Let’s take a look back on this year’s big stories and how they impacted on the wider private-rented sector…

2011 started with our Saving Housing in Portsmouth campaign – our on-going fight against Article 4 directions being taken out by local authorities across the UK, in an attempt to limited the amount of shared housing in their areas.  It has obvious ramifications for landlords, particularly those which cater to students. 

We extended the campaign to Newcastle in February, along with 26 other local authorities.  You can join our Saved Shared Housing campaign by visiting  our website.

Also in February we announced extended hours for the NLA Advice Line.  It is now open from 9am – 7pm on Mondays (except bank holidays), and from 9am to 5pm Tuesday – Friday.  More than 800 calls a week are now made to the Advice Line.

In March, the government announced Stamp Duty Land Tax changes, which we campaigned for.  It provides significant tax savings for bulk property purchases.  NLA Chairman David Salusbury welcomed the changes: “The stamp duty concessions on bulk purchases will encourage landlords to invest more in residential property, thus providing much needed housing in the private rented sector.”

In April, we launched NLA Property Insurance, providing insurance tailored specifically to the needs of landlords, providing coverage for loss of rent, temporary accommodation for tenants if needed, theft of keys and malicious damage by a tenant.

In May, the inaugural NLA Landlord Live took place at London Olympia, with thousands of landlords attending to meet with over 300 suppliers servicing the private rented sector.  There were live property auctions, free workshops on local housing allowance and our Advice Line staff on hand to answer questions.

In June, we released statistics showing more than half of private residential landlords are planning to reduce the number of properties they let to tenants on housing benefits.  Worryingly, more than 90% of landlords say they can’t afford to reduce their rents to absorb the cuts.

Also in June, we welcomed two new Non-Executive Directors to our board – Tony Richard and Carolyn Uphill.  Both were formerly NLA Regional Representatives.

In July, we released our tips for landlords planning to let their properties during the 2012 Olympics.  If you are planning to let out your property, you’ll find them helpful.

In August, our landlord survey found 96% of landlords have a “very good” or “good” relationship with their tenants.  3% say their relationship is adequate while just 1% say its poor.  The survey also showed the majority of buy-to-let landlords would be significantly affected by any rise in interest rates.  A rate rise of two percentage points would have a negative impact on 89% of landlords, with 53% saying the affect would be significant.

In September, we released figures showing two-thirds of private landlords would consider taking advantage of the government’s Green Deal, designed to make homes more energy efficient at no direct cost to the landlord

In October, we welcomed our new Chief Executive Officer, Richard Lambert, to the NLA after a successful nine years as head of at the British Woodworking Federation.

In November, we held our NLA National Conference in Birmingham, with keynote speaker Terrie Alafat, Director of Housing Growth and Affordable Housing at Communities and Local Government describing the PRS as “definitely at the top of the government’s agenda”.

And to end the year in December, we made a special Christmas donation to homeless charity Crisis, to help them provide 50 places for homeless people over the festive period. 

Although 2012 will inevitably bring challenges for landlords, it is our continued mission to help promote best practice (as shown by so many of our members) whilst representing landlords at a local and national level.

A very Happy New Year to all the readers of the NLA blog!

 

 

 

Time these rogues were dispatched once and for all

Channel Four’s long running ‘Dispatches’ programme took an in-depth look at a subject very close to the NLA’s heart this week, the private-rented sector.

Entitled ‘Landlords from Hell’ and presented by veteran journalist Jon Snow, the programme sought to expose the sorry state of the private-rented sector and the shocking actions of those operating below the water-line at the murky bottom of the PRS.

The two cases highlighted were indeed shocking examples of how poorly one human being can treat his fellows in the name of business.  The two individuals showed no respect for their responsibilities as landlords and displayed utter contempt for their unfortunate tenants –seemingly without facing any considerable sanctions in return.

Above all these people showed that they do not deserve to be described as landlords.

The term ‘landlord’ may not necessarily conjure up an image of noble ideals for the majority, but so far as we are concerned it does mean something.

Being a landlord means that you have agreed to:

  • provide your tenants with a home in exchange for regular rental payments,
  • repair and maintain your tenant’s home for the duration of their tenancy,
  • to allow your tenants to live in a property free from harassment,
  • forfeit possession of a property until such time that a tenancy legally  ends,
  • show your tenants the same degree of respect that you expect to receive.

These ‘landlords from hell’ appeared to display none of the above, choosing instead, to flout the law.

In any other walk of life these people would be considered criminals and dealt with appropriately. The private-rented sector should be no different, the continued existence of these criminal rogue operators makes us all look bad.

There is no defence for these offenders, but it does beg the question; Why so few prosecutions?

There will, no doubt, be much debate following this programme about the need for more regulation of the PRS. However, is more the right response? This is not a new problem, and successive governments have introduced legislation, extended local powers, and modified the various standards regimes.

The problem is that regulation only works when it is implemented and enforced appropriately. The NLA works with such organisations to give guidance on this.

Far from being powerless, enforcement agencies have quite an arsenal at their disposal to target rogue, criminal landlords for example:

  • Environmental health officers are able to serve prohibition or improvement notices in respect of poorly maintained, or dangerous property under the Housing Health and Safety Rating System (HHSRS) requiring emergency repairs or even closing down sufficiently poor properties.  In severe cases emergency repairs can even be carried out without the landlord’s involvement (although at his expense).
  • HHSRS allows agencies to inspect any property – regardless of tenure – allowing them to identify those landlords known to operate below the radar.
  • A local housing authority may use a management order to take control of the management of a poorly managed property, either temporarily or permanently, in circumstances where a landlord has neglected his responsibilities.
  •  Landlords who fail to appropriately license their properties can also be fined up to £20,000 and find themselves subject to a rent repayment order of many thousands more.

Not to mention the many criminal sanctions which a landlord may face if there is any allegation of harassment or illegal eviction, up to and including a custodial sentence.

The real discussion must surely be about why there is such limited enforcement of these existing powers and why instead there is an ongoing clamour for more licensing and arbitrary restrictions of accommodation when demand has never been higher.

No doubt the answer lies in funding.

We all know that enforcement against the bad guys is more expensive than blanket restrictions, but surely it would make sense for everyone if local authorities were able to used the extensive powers they already have to make an example of the very worst criminals masquerading as landlords, abusing their position, their tenants, and devaluing the term ‘landlord’.

www.landlords.org.uk

What do you call an optimistic landlord?

Some might say ‘delusional’

Others would prefer ‘visionary’

I’ll leave you to decide

But as incongruous as it may sound, according to the NLA’s Landlord Optimism Index, private residential landlords are more hopeful about their prospects now than at any point since the start of the credit crunch.

As always, context is crucial and it should be noted that confidence remains 14 points below the 2007 high point. However, net landlord optimism is up an impressive 20 points from its lowest point two years ago.

So, what have landlords got to be so positive about?

It would be misleading for the NLA to make out that the future is entirely rosy for landlords, there are significant cuts on the way in respect of housing benefit budgets. LHA rates for much of the country are to be cut, and caps imposed on the most expensive areas.

A great number of local authorities are also working on ways to limit the growth of the shared housing market – as described in earlier blog posts.

But….

Maybe there are also reasons for this emerging optimism:

- Bank of England interest rates have been at the historically low rate of 0.5 percent since March 2009.
- Property prices remain suppressed, facilitating affordable deals
- Tenant demand remains high – and continues to outstrip supply in much of the country
- Slowly but surely buy-to-let lenders are coming back to the market with improved deals

So does this mean 2011 is destined to be a great year for the PRS or are the next 12 months going to be defined by cuts, arrears and hardship for landlords in the UK?

Neither may true – or both for that matter.

The one thing that we can say for certain is that there remains no-such thing as a ‘typical landlord’.

But given the lack of a typical tenant, maybe that’s no bad thing.

Nowhere left to go….

We’re told that 2011 will be all about localism. Which is great, local people dealing with local problems in a local way.

However, not everything can be considered in isolation without taking into account the wider context. In the same way that very few housing issues can be viewed without reference to wider social factors.
This kind of lateral thinking is particularly important when you consider the growing number of local authorities attempting to manipulate the housing market in their catchment using new and extended powers. Of course this is nothing new, planning decisions have long controlled the available supply of housing, targets have influenced the type of units built and infrastructure has determined who wants to live where. But the latest moves by some local authorities seem slightly different.

Using part of the Town and Country Planning Act, a few local authorities including Portsmouth and Manchester to name two, are trying to require all landlords wishing to establish a new small HMO obtain planning permission before agreeing a tenancy.

These ‘Article 4 Directions’ effectively roll back housing policy to a pre-election stage, before the Coalition granted permission across the board for small shared houses, whereby households of three or more unrelated people can only share a home (which had previously housed a family) if permission is granted by town hall.
Ideological matters aside, this kind of policy – assuming the requirement is subsequently used to limit the number of HMOs in a town – is likely to have some pretty far ranging consequences.

The individuals who live in shared houses are a varied group drawn from a variety of backgrounds – key workers, students, migrant workers, recent graduates and vulnerable adults. But the one thing they are all likely to have in common is a very limited housing budget. Unsurprisingly, this means that they are unlikely to be able to move to another type of property.

This type of devolution of authority to local councils cannot be done without also shifting responsibility for decision-making.

Which will present local authorities with a number of very difficult questions.

If local communities do not want shared housing in their back-yard that is their right. But I am far from confident that the people making the decisions locally have considered all of the consequences of barring sharers from local communities, whether they are nurses, students, teaching assistants, street cleaners or shop assistants.

If a person on a low income cannot afford to buy or rent a self contained home of their own, and the option of sharing a safe, secure home with others is removed. Where are they supposed to live?

If they cannot live locally, what happens to the local companies they work for? What will happen to the local businesses which rely on them to stay afloat?

Answers on a post-card anyone?

Landlords to be dealt a fair hand?

David Cox, NLA Policy Officer

Landlords could be forgiven for letting out a collective groan when, minister Chris Huhne MP, announced the Government are to push ahead with new measures to encourage greater energy efficiency in the private-rented sector.

But unlike some earlier initiatives, the ‘Green Deal’, is a scheme designed to provide up-front funding for energy efficiency improvements including loft, cavity and solid wall insulation, floor insulation, draught-proofing and water pipe lagging.

Traditionally landlords have proved difficult to target with energy efficiency measures as the arrangement is typically one-sided – i.e. the landlord pays and the tenant benefits; what is known by the technically minded as the split incentive.

However, this scheme looks different:

1. There will be no capital outlay for landlords. The Green Deal financing will be paid back through the utility bills. Therefore, whoever pays the utility bills, pays back the loan.
2. The ‘Golden Rule’ of the Green Deal is that the combined cost of both the utility bills and the loan must be lower than if nothing had been done – so after the measures are installed tenants will be financially better off as they are paying less in utility bills; and warmer.
3. A warm tenant is a happy tenant, and happy tenants are likely to stay or longer; which reduces void periods and the need to re-market.
4. European legislation will shortly require landlords and letting agents to put energy efficiency ratings on all property adverts. A property with a higher EPC rating should be more attractive to tenants and so using the Green Deal and installing the improvements will make it easier to let.
5. Most importantly, these measures will protect the fabric of properties. Energy efficiency improvements reduce damp, mould, condensation and damage from frozen water pipes – so reducing long-term maintenance costs.

However, the devil may yet be in the detail. As with all new legislation, the Green Deal is a carrot to encourage landlords to embrace the energy efficiency agenda. Of course, where there is a carrot there is always a stick and the Green Deal is no exception. If landlords do not take up the Green Deal, from 2015 tenants will be able to demand ‘reasonable’ energy efficiency adjustments.

The NLA has received assurances that a property’s character will be considered in relation to any required works and the ‘Golden Rule’ will remain in force ensuring that the landlord will not be expected to pay any upfront costs.

But if a landlord fails to make requested adjustments – which are practical and covered by the scheme – local authorities may be able to fine them and insist the properties are insulated.

This gives landlords a five year window to insulate their properties free of charge. It is the private-rented sector’s opportunity to prove its social conscience by tackling climate change, that it’s a tenure offering high quality accommodation – once and for all dispelling the myth that landlords don’t care about their tenants. (Not to mention an opportunity to make some otherwise costly improvements).

There may be no such thing as a free lunch – but the NLA would advise landlords to at least take a look at the menu before making up their minds.

HMO planning – not very well planned out

Vincenzo Rampulla NLA Public Affairs Manager

Last week I was in Newcastle at a surprisingly popular landlord meeting.

Even here at NLA Towers, where we immerse ourselves in everything ‘landlord’, we were surprised to see 75 landlords turn out on a wet Tuesday to hear yours truly talk about Capital Gains Tax.

Except that I wasn’t the main reason why so many landlords had flocked to the meeting.

Newcastle City Council had accepted our invitation for representatives to discuss the Council’s implementation of the new HMO planning rules and many landlords had questions they wanted to ask.

Full credit should go to Newcastle City Council for seeking to engage with NLA members; this sort of general collaboration has been successful for both landlords and the council (full details soon) in a way other councils should pay attention to.

That said, I think many local authorities are finding implementing these HMO planning rules a bit of a shambles.

As many of you will remember we were told by the then Labour Government that this would not be a retrospective change. In practice, every shared housing landlord is trying to work out whether their local authority will take the new rules as an opportunity to change a planning permission fee or shut down their shared house.

We’ve had many landlords contacting us confused about how they are supposed to convince their local authority that the shared house they’ve been renting out for the last five years has not suddenly become an HMO and needs planning permission.

Different local authorities across the country are asking for different things when it comes to the proof landlords have to provide that they are not running HMOs without planning permission.

So far, all that landlords and councils have are questions about how to implement this seemingly small change to planning law, and not many answers.

A recent property forum on the issue highlighted Peterborough Councils particular approach:

“Landlords can contact them before trying to use/buy/let a property as HMO, and get a decision in principle within 2 weeks (10 days i think) of making a pre-application application, at a cost of £185. This should allow the landlord make a reasonably swift decision(!)”

It is this kind of hidden charging that infuriates landlords.
Even more worryingly we’ve started to hear about areas of the country where the local authority is using the planning rules to instigate a ban on all new shared housing. As it stands, we’ve not seen any consultations on new housing or local spatial strategies to inform any caps on new HMOs.

As Communities and Local Government’s own research shows, local authorities are better placed to look at direct action rather than planning law to tackle the problems faced by their communities.

This could now turn into a little acknowledged fiasco for the private-rented sector and the tenants who depend on shared housing. We need the Government to act swiftly on its principle that regulation should be targeted and proportional – something the current system is totally lacking.

We don’t need no regulation…

Chris Norris NLA Policy Manager

Pickles, Shapps and the rest of the team took their seats on the coveted green benches to the Speaker’s right for their first stab at Communities’ Question Time today.

Normally a fairly dull affair, this session proved interesting, not only because it is quite obvious that most of the newly elected MPs haven’t found their feet yet, but also because the new Housing Minister used the opportunity to announce his intentions for the private-rented sector. Hold on to your hats…

Following a false start (or two) by his Secretary of State, Mr Shapps told the House that his key objective for the PRS is to ensure that there is a balance between the rights of tenants and landlords.

Fortunately, as he’s quite happy with the balance offered by current laws this means that the Department do not plan a great many changes.

Of proposals announced by his predecessor, Mr Shapps waved goodbye to;  the National Register of Landlords, regulation of letting and managing agents, and compulsory written tenancy agreements.

Complementing the sector in a supporting statement on the CLG website, he went on to say:

“With the vast majority of England’s three million private tenants happy with the service they receive, I am satisfied that the current system strikes the right balance between the rights and responsibilities of tenants and landlords.”

The Minister categorically ruled out continuing with the previous government’s programme of additional regulation.

Although, in line with the spirit of localism, he did confirm that consent for local selective and additional licensing schemes  would not be revoked.

In a separate letter to the NLA, Mr Shapps has also confirmed that the Government will review the planning rules for HMOs (brought in hastily before the election) to ensure the planning system is “tailored to local circumstances” rather than imposed where no regulation is needed.
All in all, not bad for a day’s work…