EXCLUSIVE: Portsmouth landlords battle council ‘ineffective’ HMO licensing

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Portsmouth’s landlords have urged their council not to go ahead with plans for an additional licensing scheme covering more of the city’s HMOs.

Its current scheme covers 1,400 larger HMOs but it plans to extend this to about 2,000 three- and four-bed houses in a bid to improve standards and rid the sector of rogue landlords. A consultation launches on 23^rd May.

Portsmouth’s first additional licensing scheme ran from 2013 to 2018 but was not renewed after doubts about its effectiveness.

Last year, LandlordZONE reported that despite heralding its current licensing scheme’s success, it had fined just seven landlords and agents in 2020.

Portsmouth and District Private Landlord Association believes additional licensing would not help resolve problems around HMOs.

Chairman Martin Silman (pictured) tells LandlordZONE that it will have no effect on noise, parking and anti-social behaviour because smaller HMOs generally don’t create these problems.

Instead, with additional licensing focused on squeezing out the smaller rooms and raising standards across the sector, prices will be pushed up, while landlords will ask whether it’s worth continuing to have smaller HMOs.

“The number of small, nice homes for three or four nurses or dockyard contract workers will decrease and the number of mega-HMOs will rise in response to the high demand and high prices that this will create,” says Silman.

Knock-on

“This has a knock-on inflationary impact on both local rents and local house prices which increases the pressure further for more affordable rents and affordable homes.”

Some councillors have also voiced support for city-wide selective licensing of the whole PRS and while Silman believes the evidence does not support this, he fears this could be the next step.

The council has estimated it will need to employ the equivalent of 18 extra full-time employees to help manage the new additional scheme, which would be funded by new fees of between £829 and £883 for a five-year licence.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Portsmouth landlords battle council ‘ineffective’ HMO licensing | LandlordZONE.

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Rent control campaigners hit by HUGE setback as Spain ends ‘disastrous’ experiment

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Rent controls have been scrapped in the Catalan region of Spain after they failed to make housing more affordable.

The caps were imposed in a bid to rein in soaring housing costs, but instead the law made property investment in Barcelona less attractive as yields dropped due to lower rental incomes while house prices continued to rise.

Its government has now declared the rental law as unconstitutional.

The news is pertinent as many parts of the UK are currently pushing for similar constraints on the private rental sector; Bristol is bidding to become the first city to introduce rent controls, while London mayor Sadiq Khan continues to campaign for similar powers, Jersey’s Reform Party has proposed measures and the Scottish government is also consulting on proposals.

Spain’s property hotspot, Barcelona had attracted many second-home buyers and investors during the last few decades, according to Mohammad Butt (pictured), Barcelona office director at Lucas Fox estate agent.

He says: “This is great news for Barcelona, as the end of rent capping will allow investors to fully capitalise on purchasing in an international city which offers an attractive and safe return on their investment.”

He added that the European Central Bank had indicated a possible interest rate increase in order to regulate inflation.

“Now is the time to be requesting a mortgage whilst rates remain low,” says Butt.

“The return of foreign investors with the lifting of travel restrictions and quantitative easing programme within the EU has been the main driver for the Spanish recovery and real estate market.” 

Read more: The history of renting in the UK and rent controls.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rent control campaigners hit by HUGE setback as Spain ends ‘disastrous’ experiment | LandlordZONE.

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TRENDS: Tomorrow’s landlords will be more invested in holiday lets, says new research

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The future of landlording is to have a more bucket-and-spade flavour than at the moment, new research among younger wannabe investors has discovered.

One if five UK adults have thought about buying a short-let holiday property in the UK to rent out, spurred on both by travel restrictions during the pandemic but also growing awareness of the ecological effects of plane travel, says Suffolk Building Society.

Those keenest to consider such an investment are younger people between 18 and 34 years old, half of whom either live in London or the West Midlands.

Holiday lets

The building society says this increased interest in holiday-let properties is mirrored within its own lending team, with both the volume of, and total value of, completions for new holiday let purchases doubling between 2020 and 2021.

It also says that this new cohort is evenly split between those inspired by Covid to get into holiday lets, and those who had always planned to.

Devon and Cornwall are the locations that most wannabee holiday-let landlords were considering, followed by the Lake District, Peak District and Yorkshire Dales.

“It’s easy to understand why the idea of owning a holiday let is so attractive,” says Charlotte Grimshaw, (pictured) who heads up Suffolk Building Society’s mortgage broker division.

“As people were limited to holidaying in the UK, often within an area they know and love, their eyes were opened to the opportunity of increasing their income, as well as enjoying a property for personal use too

“However, intermediaries should also advise their clients to take the time to understand the market, and check out the competition before falling in love with a property that isn’t viable in terms of lettings.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – TRENDS: Tomorrow’s landlords will be more invested in holiday lets, says new research | LandlordZONE.

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Changing Places toilets

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Thousands of severely disabled people who need specialised facilities when they are out and about will benefit from over 500 new Changing Places toilets in England.

The Chancellor confirmed in his Spring Statement over £23.5 million has been allocated to 191 councils across England to install life-enhancing Changing Places toilets in public places and tourist attractions

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How can landlords afford to upgrade their properties to EPC band C by 2025?

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Like almost all industries the housing market is increasing its efforts to tackle climate change.

Households account for 40% of the UK’s carbon footprint and the government has forced landlords to move more quickly than others, and from 2025, all properties in the private rental sector will need to have an EPC of C or higher to be let to new tenants.

Also, lenders are increasingly offering ‘green finance’ for sustainable properties, encouraging landlords to increase sustainability.

For example, banks have said that borrowers will only need a 10% deposit on loans of up to £25,000 for a ‘green advance’, while others are offering a green cashback scheme worth £500 for eco-upgrades until March 2022.

So, with the chancellor reducing VAT on energy-saving features in the Spring Statement it is certain that ‘green’ investments are going to become a lot more prominent.

Read more about the Spring statement.

Eco privilege

That said, the cost of renovations could price out many landlords, leading to ‘eco-privilege’ in the market.

Thus, with fines of up to £30,000 for non-compliance, many landlords will need to pay thousands to renovate their properties to achieve an EPC rating of C or higher.

For affluent landlords who can afford to renovate outright, this will not be a huge issue and could be a benefit as they will be able to access favourable mortgage rates and other ‘green’ finance options.

But landlords who cannot afford to make the changes will be left with less affordable loans and an already problematic affordability crisis could become a lot worse.

Problems bridged

The bridging sector can assist landlords in accessing favourable ‘green’ finance options and limit the effects of ‘eco-privilege’.

Such loans can bridge the gap between the beginning of a sustainability refurbishment project and the acquisition of a ‘green’ finance solution.

Whether they are used to purchase a property at auction then renovate it before a landlord finds a long-term financial solution, or because a landlord simply needs to free up capital to pay for the renovations, bridging loans can empower a wider range of landlords to access ‘green’ finance for their long-term financial needs.

Fairness of the market can be protected, and the industry will become more sustainable overall.

In the build-up to the introduction of the new EPC regulations, it is vital that landlords plan a timeframe for their renovations and carefully consider their financial options.

Lenders with experience and expertise should assist landlords in doing this, and those who can successfully navigate the next few years can expect to capitalise on the benefits of ‘green’ finance options.

Author bio: Paresh Raja (main pic) is the founder and CEO of Market Financial Solutions (MFS), a London-based specialist lender that provides bridging loans and buy-to-let mortgages.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How can landlords afford to upgrade their properties to EPC band C by 2025? | LandlordZONE.

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Law of unintended consequences emanating from Holyrood

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Some of the more onerous restrictions which were imposed on landlords in Scotland in the first dark days of the pandemic are about to be rescinded at the end of the month, and it might be assumed that this would be a good thing for the private rental sector.

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The No1. property investor skill you need

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If you want to become a more successful property investor, you need to get really good at finding great deals in your investing area.  This is the most important skill you need to learn.

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