My PropCo OpCo strategy

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Property118

My PropCo OpCo strategy

Several Property118 readers have requested details of how I manage my properties, and now, most importantly, how I protect my properties from liabilities and potential fines of up to £40,000.

My Property Company (PropCo) owns some 70 properties, purchased over the last 30 years, the shares for which shares are all owned by family members. Apart from receiving rent once a month and a few outgoing transactions such as accountants fees and paying HMRC, this company does very little.

I also have an operations and management company (OpCo) which is entirely responsible for the business of lettings, management and maintenance. It is much more than a letting agent or a managing agent.

OpCo rents all the properties from PropCo, and many more from other owners, a total approaching 100. OpCo is the landlord, because it has a monthly rolling headlease contract with permission to sublet. PropertyCo is merely a passive property ownership company.

Contracts, deposit protection, court proceedings, maintenance, adhering to the law of the land (including the RRA), possession and most importanty any fines, court judgements and civil penalties are all the responsibility of OpCo.

OpCo does not own any property, so in the event of a large fine or court judgement against the company, the maximim level of exposure is the money in the bank account. It cannot lose the property, for it does not own property.

Corporation tax is levied on both PropCo and OpCo. This is not a way to reduce tax, it is a means of separating risk associated with the business of letting, maintenance and management, away from ownership.

EDITORS NOTE

This structure can work well where the PropCo and the OpCo are both limited companies. It does not usually work when the ownership of the property is not a corporate entity, because that is generally regarded as a tax-play under the Transfer of Income Streams legislation.

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Government’s Decent Homes Standard impact assessment slammed as ‘not fit for purpose’

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Government’s Decent Homes Standard impact assessment slammed as ‘not fit for purpose’

The government’s impact assessment for extending the Decent Homes Standard to private landlords has been slammed by an independent committee as ‘not fit for purpose’.

The withering condemnation of the Ministry of Housing, Communities and Local Government’s (MHCLG) proposals has been made by the Regulatory Policy Committee (RPC).

The aim is to bring private landlords under the same updated DHS rules as social housing providers by 2035.

But the committee warns that the government is avoiding discussion of viable alternatives.

Critically, the committee warns that the MHCLG hasn’t put forward a sound business case for extending the DHS to the private rented sector.

Alternatives not examined

In a series of criticisms, the RPC says the impact assessment jumps straight to a single preferred option without properly weighing alternatives.

It states: “In the absence of structured comparison, the IA (impact assessment) cannot demonstrate that the preferred option outperforms alternatives for cost-effectiveness, compliance, risks or sequencing.”

The watchdog has now ordered the department to produce a full shortlist appraisal in line with the Treasury’s Green Book rules before proceeding.

It is also critical of how benefits have been presented, pointing out that the government has not consistently applied the same ‘additionality’ logic to claimed health and wellbeing gains as it has to costs.

Landlords paying for regulations they already face

There are also major issues with the £6.5 billion price tag for implementing the DHS across both private and social housing sectors.

Crucially, 82% of the costs to private landlords are not additional because they are already being driven by pre-existing legislation such as the Homes (Fitness for Human Habitation) Act 2018.

Other laws affecting costs include the Housing Health and Safety Rating System (HHSRS), and tighter EPC standards.

The committee is sharply critical that the benefits side of the equation has not been calculated on the same basis.

It warns that many claimed tenant gains are being presented as if they are all brand new.

Uncertainty over work

For England’s 2.3 million private landlords, the report highlights continued uncertainty over exactly how much work will be required.

Around 48% of PRS homes are expected to fail the new standard, mostly due to disrepair, but also tighter rules on thermal comfort, damp and mould, and facilities.

Despite the RPC’s damning verdict, the government is still expected to push ahead using secondary legislation powers in the Renters’ Rights Act.

The impact assessment says it will draw on local authority enforcement data and wider housing quality monitoring to measure how the policy performs in practice.

But the RPC makes clear that clearer detail on metrics, accountability, timing and data flows, alongside formal evaluation questions and feedback routes for councils, would provide far stronger reassurance that the real-world impact is being properly tracked.

Disappointing news for government

Goodlord’s director of landlord experience, Emily Popple, said: “This will be disappointing news for the government at a time when it’s overseeing the most seismic set of PRS reforms in a generation.

“You’d be hard pushed to find reputable landlords and agents in the PRS who don’t support higher housing standards.

“But any new regulations must have a robust and economically sound policy base underpinning them.”

She added: “This week’s report undermines the government’s position and will make it harder to garner goodwill amongst an industry who are already grappling with a wide range of new costs and regulations.

“The government must address these concerns properly, otherwise it risks raising wider questions about regulatory oversight and cost-benefit discipline at a time when tensions in the markets are already high.”

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London rents climb as supply stays tight

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Property118

London rents climb as supply stays tight

London’s PRS has started the year on a firm footing, with restricted stock and steady renter interest continuing to drive rental growth, Chestertons reveals.

It says that activity across the capital remains robust and tenant enquiries in January were 6% lower than the same month in 2025.

However, the figure is 81% higher when compared with December 2025, pointing to renewed momentum after the festive slowdown.

The number of renters securing homes also rose, climbing 15% year-on-year, underlining the pace of transactions across the market.

Tenant demand is stable

The firm’s head of lettings, Adam Jennings, said: “Our latest figures show tenant demand remains stable, supported by strong corporate interest, while rental supply continues to be limited in certain areas.

“This combination is keeping the London lettings market highly competitive, with properties priced in line with the market attracting multiple enquiries from high-quality tenants.”

He added: “With demand expected to rise towards spring, now is an excellent time for landlords to bring their properties to market.”

Rental home numbers fall

Available stock, however, remains constrained as listings were down 4% compared with last year.

At the same time, lettings valuations doubled month-on-month, suggesting more owners are weighing up entering the market during the first quarter.

The mismatch between demand and supply is sustaining competition, pushing up rents and returns.

For landlords, the backdrop remains supportive as limited choice continues to sharpen bidding among prospective tenants.

RICS survey of PRS

Chestertons says that its findings mirror those found in the recent Royal Institution of Chartered Surveyors’ residential market survey.

It found a net balance of 27% more agents saw tenant demand falling rather than rising.

Landlord instructions dropped further, registering a net balance of -39%, highlighting the contraction in rental supply.

RICS expects rents to grow around 3% this year, while property portals Rightmove and Zoopla anticipate rises of 2% and 2.5% respectively.

London home sales up

Chestertons also reports that alongside rental strength, sales activity is showing early signs of recovery following political and fiscal uncertainty late last year.

January figures indicate buyer interest is returning.

Portal enquiries, which tend to be the first step in a purchase, were just 6% below January 2025 levels but jumped 96% compared with December 2025.

Viewing numbers followed suit, rising 101% month-on-month, signalling renewed engagement from prospective purchasers.

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Landlords devote 31 hours of ‘sweat’ every month to property management

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Property118

Landlords devote 31 hours of ‘sweat’ every month to property management

Letting property is proving far from passive, with landlords dedicating huge amounts of time alongside financial investment to keep portfolios running.

According to Pegasus Insight’s latest Landlord Trends report, landlords now spend an average of 31 hours each month managing rental homes.

That equates to almost four working days, and the firm calls it ‘sweat equity’.

Among landlords with 11 or more properties, the workload climbs steeply to 78 hours, or close to 10 working days.

Letting is not passive

The firm’s founder and managing director, Mark Long, said: “There is often a perception that letting property is a relatively passive activity, that landlords just sit back and let the cash roll in.

“But the data tells a different story.

“For many landlords, particularly those operating at scale, portfolio management represents a significant monthly time commitment.”

He added: “As regulatory and operational requirements have increased, so too has the administrative and compliance workload.”

Still work with an agent

The report also highlights that landlord oversight doesn’t ease simply because a letting agent is involved.

While 57% of properties use some form of letting agent service, reported time commitments remain broadly aligned whether landlords outsource or not.

Compliance, maintenance oversight and financial administration still sit squarely with the owner.

Time input is highest among leveraged investors, HMO operators and those running larger holdings.

Chunk of rent spent on costs

Complexity increases as borrowing structures, licensing obligations and property standards stack up, pulling landlords deeper into day-to-day management.

Landlords estimate that 23% to 24% of gross rental income is consumed by running and maintenance costs.

Mr Long said: “Larger landlords, those whose properties are financed using a mortgage and those operating HMOs are naturally exposed to greater complexity, and that is reflected in the hours they invest.

“The combination of rising time demands, and ongoing cost pressures reinforces the fact that the private rented sector is becoming increasingly professionalised.”

He adds: “Successful landlords are devoting both capital and active management effort to sustain the performance of their investments.”

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Social housing landlords urged to be fair on pet requests

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Property118

Social housing landlords urged to be fair on pet requests

Social housing landlords will not be legally forced to grant pet requests, but the government urges them to be fair and considerate.

In a letter to social housing landlords, the government claims tenants in social housing do not experience the same barriers as tenants in the private rented sector (PRS) to keeping a pet.

Under the Renters’ Rights Act, tenants in the PRS have the right to reasonably request a pet, and private landlords cannot unreasonably refuse permission.

Encourage landlords to share best practice

Baroness Taylor of Stevenage, Parliamentary Under-Secretary of State for Housing and Local Government, says in the letter it is “not proportionate or necessary to legislate to require social housing landlords to fairly consider tenants’ rights to request a pet”.

She adds: “I know that many social landlords already outline their policies on pets within their tenancy agreements. Where landlords do not, I encourage them to do so and also want to encourage landlords to share best practice on how requests to have pets are considered and communicated to tenants.

“I also expect that as social housing landlords, you will wish to clearly explain to tenants the factors that will be considered as part of any request for a pet, for example, whether the tenancy or superior lease allows pets, the suitability of the property (size/layout, shared access, access to gardens/communal space), the type/size of the animal, and welfare considerations, and provide a simple route to apply with a standard timeframe for a decision noting when timelines may extend if superior landlord consent is required.”

Refusal must be explained

Baroness Stevenage adds if pet requests are refused, then social housing landlords must explain why.

She writes: “Where requests are refused, decisions should be confirmed in writing with an explanation for why the request hasn’t been granted and, if appropriate, signpost the tenant to the options available for review or redress.

“Many social landlords also include details in their policies on pet welfare and control measures such as ensuring animals are looked after appropriately, are well‑controlled in communal areas, and do not cause nuisance or damage.”

Private landlords cannot refuse a pet request if they do not like pets

Under the Renters’ Rights Act, for private landlords the government has provided guidance on situations in which landlords may refuse a tenant’s request to keep a pet. These include:

• Another tenant has an allergy – however, the guidance does not specify that a landlord’s own allergy is grounds for refusal.
• the property is too small for a large pet or several pets
• the pet is illegal to own
• if you’re a leaseholder, and your freeholder does not allow pets

However, private landlords cannot refuse a pet request if they do not like pets, have had previous tenants with pets who damaged the property or have general concerns about potential damage in the future.

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Derby landlord sells his portfolio with no searches, no survey, and £30,000 more than investor market

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Property118

Derby landlord sells his portfolio with no searches, no survey, and £30,000 more than investor market

We all know that this year’s brought with it some tough challenges for landlords. We’ve also been bombarded with news that, quite frankly, is bringing us all down.

It’s refreshing to hear, therefore, that for landlords who have made the decision to sell, there’s a way out with opportunities to be had, and it’s paying off.

One such landlord based in Derby approached us at Landlord Sales Agency wanting a fast sale, and was worried about tenant approval, especially with us edging ever closer towards the Renters’ Rights Act start date. Rather than exit the market completely, he was looking to sell his difficult properties and knew that traditional estate agents would take far too long and have zero certainty despite their higher market value prices, and auctions would leave him selling for far less than he wanted.

He needed experts who knew exactly how to sell difficult properties with tenants, could deliver certainty of sale and were able to manage the entire sale without him taking too much of a hit on price.

We were able to deliver exactly that. Specialising in landlord portfolio exits, we got to work ensuring full tenant cooperation, which preserved the value of the properties. Despite the tenants being anxious about sale and potential eviction, we were able to position the sales as landlord-to-landlord with clear communication.

Whilst the buyer market dictated vacant possession, our ability to get the tenants to co-operate meant we were able to market the property to substantially more buyers.

The result proved the importance of getting the right people for the job: we sold all 4 of the 6 properties the landlord owned and ensured the tenants assisted with the sale.

What’s more, we sold to a cash buyer, no searches, no survey, avoided a 9-month court delay and achieved £30,000 more than the investor market.

 The key takeaway? How you sell matters as much as if you sell, and we’ve got the right experts to do it. The landlord was able to get back on track and was very happy with the price. Whilst landlords need to be realistic in that for a fast sale they’re not going to get 100% market value, what they are able to achieve is more than the investor market, and a substantial amount more than panic selling at auction. It’s a win-win.

And he’s not alone. Every week, around 80 landlords are coming to us to sell, and we’re delivering. Not only are we able to achieve results that landlords are happy with, we’re super fast and we take the entire sales process off the landlords’ hands, allowing them to relax and let us do all of the hard work. On average all our properties sell in less than 28 days.

We get the job done, and we do it faster and better than anyone else. It’s why we’re the trusted choice for companies such as Property 118, LandlordZONE and Hamilton Fraser.

So if you have properties you want to sell and want to get straight to it, get in touch.

We’re here, and we’re ready to get started.

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Council urges landlords to help amid housing emergency in Scotland

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Property118

Council urges landlords to help amid housing emergency in Scotland

A Scottish council is calling on landlords to provide temporary accommodation for vulnerable families.

The council has launched a partnership encouraging landlords to offer properties for short-term use to help support families facing homelessness across the area.

The Scottish Association of Landlords (SAL) is backing the scheme, saying it will help provide vital accommodation for homeless families.

We are in a housing emergency

The council explains landlords can lease their properties to Fife Council for a fixed term, receiving guaranteed monthly rent, property management, and no void periods with landlords retaining control over repairs and maintenance issues.

Fife Council’s housing spokesperson, Councillor Judy Hamilton, is keen to see landlords get involved.

She commented: “We are in a housing emergency and we’re committed to increasing the supply of affordable houses and easing pressure on our housing services.

“To achieve this goal, the council is developing affordable housing through various options using land and buildings in council ownership, engaging with private sector landowners, land agents and developers and utilising Scottish Government AHSP funding to assist in the delivery of much-needed affordable houses throughout Fife.

“This new Landlord Partnership will make sure that more families will soon have access to safe, secure and affordable housing in various locations across Fife.”

Members will benefit from a supportive network

She adds: “Every new property we secure makes a real difference for families waiting for a house that meets their needs.

“We know property owners want reassurance, reliability, and a straightforward service. This new Landlord Partnership aims to offer exactly that, while also contributing to the availability of safe, quality homes for people in our communities. We encourage owners across Fife to get involved.

“Working in partnership with Landlord Accreditation Scotland (LAS) members will benefit from a supportive network committed to improving standards and strengthening the private rented sector across Fife.”

Practical approach to tackling homelessness

Scottish Association of Landlords (SAL) chief executive, John Blackwood, tells Property118 the scheme will help tackle Scotland’s housing crisis.

He said: “We are pleased to be joining with Landlord Accreditation Scotland in partnering with Fife Council on this innovative and practical approach to tackling homelessness, particularly for vulnerable families.

“By working together, we can help some of the most at-risk people get into safe, flexible homes and find new tenant customers for our members.

“Scotland is facing a housing crisis, and it will only be resolved with all stakeholders, including the private rented sector, playing their part through initiatives like this.”

Landlords can find out more about the scheme by contacting Fife Council’s Housing Access Team.

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Government ramps up campaign to prepare landlords for Making Tax Digital

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Property118

Government ramps up campaign to prepare landlords for Making Tax Digital

The government claim they are working with the software industry to make Making Tax Digital (MTD) compatible products available for landlords.

In answer to a written question, the government claim they are ramping up their campaign to inform landlords about Making Tax Digital.

Under the controversial scheme, from April this year, landlords earning more than £50,000 will be required to keep digital records and submit quarterly updates to HMRC using authorised Making Tax Digital-compliant software.

Making Tax Digital will help landlords keep on top of their tax affairs

Independent MP James McMurdock asked the government: “What steps HM Revenue and Customs (HMRC) is taking to ensure that sole traders and landlords impacted by the new Making Tax Digital for Income Tax rules are aware of their obligations.”

In response, Labour MP Dan Tomlinson says the government is working to inform landlords of their obligations, claiming Making Tax Digital will help keep landlords on top of their tax affairs.

He said: “The government is undertaking a range of activities to ensure those needing to use Making Tax Digital (MTD) for Income Tax from April 2026 are ready and able to do so successfully.

“This includes targeted media campaigns, awareness letters, developing guidance, and working with the software industry to ensure a broad range of MTD‑compatible products is available, to suit different needs and budgets. Free options will support those with the simplest affairs.

“MTD will help businesses and landlords keep on top of their tax affairs. It places small businesses on a more digital footing, with digital tools helping to reduce errors and making annual tax returns easier.”

The government has published guidance to help landlords find the right software for MTD, including a list of approved software providers.

Alongside this, a new online search tool has been launched, which asks a series of questions tailored to sole traders and landlords, before generating a personalised list of compatible MTD software options.

No real benefit

However, as previously reported by Property118, despite the government claiming Making Tax Digital will help landlords, an accountant says this is not the case.

Simon Misiewicz previously told Property118:  “There’s no real benefit beyond maybe streamlining some of the work you already do,” he says. “Does it help with tax returns and submissions? The truth is, I can’t see how.

“There’s no advantage for the individual in submitting quarterly returns, because HMRC doesn’t do anything with them until the end of the year. You don’t pay your taxes any earlier, and there is no real cash-flow benefit for the government”.

The government admitted in the Making Tax Digital impact assessment that landlords earning £50,000 could incur an average transitional cost of £285 and an average annual additional cost of £115.

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Labour-run council hires extra staff for selective licensing crackdown

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Labour-run council hires extra staff for selective licensing crackdown

A council has doubled the size of its staff to deal with selective licensing.

Westminster council claims it has recruited 52 new posts to its Private Renters Team to process selective licensing applications and move from “reactive enforcement to a more proactive approach”.

The licence costs nearly £1,000, and an online reporting tool has been launched for residents who suspect a property is operating without the correct licence.

The news follows an announcement by Mansfield District Council recently that it had underestimated how many PRS homes would need to be licensing and recruited two more staff members.

Deliver real change in the private rented sector

The Labour-run council says the response to the selective licensing scheme from landlords “has been far stronger than anticipated” and has received more applications than expected.

Cllr Ellie Ormsby, cabinet member for regeneration and renters, claimed extra staff will help support renters.

She said: “Selective licensing has given us the ability to significantly expand our Private Renters Team, allowing us to move from reactive enforcement to a proactive approach that raises standards across Westminster.

“As new duties come into force under the Renters’ Rights Act, Westminster Labour is making sure the council has the capacity to meet its responsibilities, protect renters, and support responsible landlords. This expanded team gives us the tools we need to deliver real change in the private rented sector.”

Help target enforcement

Westminster City Council claims its Private Renters Team will now focus on increasing compliance across the borough by identifying properties that are not registered but should be licensed under the selective licensing scheme.

The council’s online reporting tool will allow tenants and residents to report a property they suspect has no licence. It claims: “This will help us target enforcement more effectively and ensure that no one gains an unfair advantage by avoiding their responsibilities.”

The council also points out that when a landlord fails to obtain the correct licence, tenants may be eligible to apply for a Rent Repayment Order, allowing them to reclaim up to 12 months’ rent paid during periods of non-compliance.

As previously reported on Property118, selective licensing does more than good, with government guidance suggesting selective licensing should only be used as a last resort.

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Council turns to private landlords to house benefit tenants

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Property118

Council turns to private landlords to house benefit tenants

A council is urging landlords to rent out their properties to tenants in receipt of housing benefits.

Sheffield city council is looking for landlords to lease their properties through its private rented sector (PRS) scheme.

The news comes as last month, Exeter city council urged landlords to fill vacant homes via a free scheme.

Guaranteed rental income

The National Residential Landlords Association (NRLA) reports on its website that the free scheme by Sheffield council is looking for one, two or three-bedroom properties in the Sheffield area.

The council says landlords can benefit from a guaranteed rental income, with the council guaranteeing rent for the fixed term of the tenancy, as well as access to the Damage Liability Scheme, under which the council will cover any damages caused by a tenant in the property.

The council say the tenants who use the scheme are usually in receipt of some benefits, even when working.

Under the scheme, councils will match tenants on their waiting list to the property with a local authority representative organising and attending all property viewings and managing the contract.

Sheffield city council say the landlord will retain full management of the property throughout and make the final decision on offering any tenancy.

To find out more information on the scheme landlords can view by clicking here.

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