My PropCo OpCo strategy

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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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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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