Landlords’ Association dispute with Brighton & Hove Council

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Selective Licensing:

The iHowz Landlords’ Association has been in dispute with Brighton & Hove City Council (BHCC) regarding their proposed Selective Licensing scheme (see background – below).

As part of the process, BHCC had to apply to the Secretary of State for Housing, Communities and Local Government (SoS) to obtain his confirmation for the scheme.

The SoS gave confirmation to BHCC on September 10^th 2018, but iHowz objected and wrote to both BHCC and the SoS stating their reasons why this confirmation was unlawful.

After appropriate thought and consideration on October 31^st 2018 the SoS has notified iHowz that he has now withdrawn his confirmation and has agreed to reconsider the matter.  This will also require BHCC to re-consider their position.

iHowz have released the following statement:-

‘We took this action because we felt the decision to license some 27,000 rental properties was unlawful, unnecessary and not justified by the evidence provided, and would almost certainly lead to rent increases for many private sector tenants in Brighton.

Licensing was brought in 2006 to allow local Councils to control a small area of rental properties being poorly managed bringing that area into disrepute.   We support licensing when used for that purpose.

We cannot, and have never supported the carte blanche licensing of large areas.

We have previously offered to work with the Council to help improve rental conditions for private sector tenants in the City; improve property conditions in a cost effective manner where required; and most importantly identify the possibility of criminal landlords, and we repeat that offer.

Furthermore we urge the Council to work with us to extend our existing programme of landlord training in the City to improve landlord knowledge so they can give the best and most efficient service to their tenants.’

iHowz are writing to BHCC urging them to work with local landlords through its office.  Additionally iHowz have urged the SoS to consider the future of mass licensing schemes.

iHowz have also offered to meet both BHCC and the Government for further discussions.

However, if BHCC persists in seeking SOS’s confirmation for its scheme, iHowz will continue to oppose the application on the grounds that it would be unlawful.

Background:

BHCC have all three licensing schemes:-

1. the national mandatory schemefor any HMO with 5 (or more) occupants – city wide – commenced October 1^st 2018;
2. Additional Licensing, for HMO’s of two (or more) storeys occupied by 3 (or more) occupants – city wide – commenced March 1^st 2018;
3. Selective Licensingfor any non-HMO in 12 wards in the city – was due to commence Feb 4th 2019.

iHowz objected to the need for the Selective Licensing of some 27,000 properties in the nominated 12 wards.  We attempted to discuss and negotiate the situation with BHCC but they took the decision earlier this year to proceed.

The only way to object to such a scheme is by a Judicial Review (JR) of the decision.  The rules regarding a JR application are complicated, but it is important to make the initial application (it is a two stage process) as soon as possible, and definitely within a three month window of the decision being made.

Because it is such a large scheme BHCC had to apply to the Secretary of State for Housing (SoS) for permission to continue.  It was unclear to the legal fraternity whether we should await the SoS decision, which might have taken us outside the three month window, so we applied early to the High Court.  The High Court subsequently informed us that we would have to await the SoS decision.

BHCC applied to the SoS on two perceived problems in the designated area, both of which BHCC stated were within the potential to be managed by the landlord:-

1. anti-social behaviour (ASB);
2. poor property conditions.

We wrote to the SoS countering these claims.

The SoS responded that BHCC could continue, but only on the basis of poor property conditions, because there was insufficient evidence to justify ASB problems.

Naturally we disagreed with this and continued to fight this case.  We decided to challenge the SoS’s decision and asked the SoS for the justification for this decision, repeating our objections.  The SoS gave this appropriate consideration and decided to withdraw the original decision.

This leaves BHCC in the position to either abandon Selective Licensing altogether; appeal the reversal; or to start the process again, possibly with a smaller area not requiring SoS permission.

[Image shows Brighton Pavilion]

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The Alliance is Launched

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Let me Preface this by thanking Property118, Mark and Neil on behalf of all our members. Without Property118, it would not have been possible.

The New Landlords Alliance, against all the odds has been launched. We were told that it would not be possible

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Direct Line Renewal?

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Just a heads up to others…. Approx 30 days before renewal I received my renewal documents through the post and email , the renewal cost was within a few pound of last year (£428) and it explained I needed to do nothing if I was happy

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Another Budget, another Tax hit for Landlords?

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Capital Gains Tax:

A seemingly innocuous point made by the Chancellor in his Budget speech last week could be a lot more important to landlords, or property sellers, than might seem at a first glance, of all the budget summaries.

It has previously been the case that landlords can claim private residence relief (PRR) if they let out a home they have lived in, when they sell. This might be for example when they can’t sell when moving out to a new home, when they move away with work, or they simply want some income from the vacant property.

It seems that from April 2020 PRR will apply only where the owner is sharing occupancy of the home with a tenant. It’s a situation that will apply to very few people, so effectively the PRR second home benefit is being removed altogether.

It currently provides for up to £40,000 of relief (£80,000 for a couple) to people who let out a property that is, or has been in the past, their main home.

As it stands at the moment landlords do not pay any Capital Gains Tax (CGT) for the time they lived in the property, plus an additional exemption period of 18 months (this was three years until reduced in a previous Budget) that they owned it. But according to Mr Hammond, this final ownership period exemption will now be reduced even further, to 9 months.

So, it would seem that effectively this benefit is being removed entirely and could lead to a situation where owners will be reluctant to leave before selling their own home, possibly slowing even further an already stagnant housing market, or encouraging people to leave homes vacant for extended periods.

It is also likely to lead to a situation where more landlords will decide to sell properties now. When they have lived in the property themselves, and where there is likely to be a large capital gain, there is likely to be a strong motivation to sell, before the imposition of the new rules.

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