So far I’ve kept quiet about all the new tax and HMO minimum requirement legislations our “Dear Leaders” are proposing to throw at landlords over the next few years – I suppose if I didn’t give it any attention, they’d see sense, it would all go away and I wouldn’t look like an idiot for commenting.
It clearly isn’t going away so I’m now going to voice my opinions in a vague attempt to stick up for myself and other landlords who have contacted me for advice over the last few months.
What next for housing benefit tenants, sorry, local housing allowance, no that’s not it, universal credit recipients?
I genuinely don’t mind how a tenant is funded providing we can have a mutually beneficial working relationship. i.e I provide a warm, safe, functioning place to lay their head and, in return they pay the contracted rent and behave themselves accordingly within the law. This is a challenge for some and takes a degree of tolerance on all sides. Some tenants find the PRS too challenging and the following evictions have taken place so far this year:
Alcoholism – being discovered one too many times comatose on the stairs with no control over his bowels;
Weed Smoking – always leads to problems and it is NOT harmless;
Family increase – a couple suddenly discovered they had 2 small children whom they hadn’t declared upon interview or check in believing they would all be happy living in one room;
General Twathead – I was blessed with 2 of these who partied all night, were rude to the other tenants and lived like pigs;
Most went quietly after a Section 21 notice and agreement that they’d be better off elsewhere without a control freak of a landlady who nagged them. However, 2 HB tenants took it to Court Possession Order. Why? Because the council (understandably) didn’t want responsibility of them until they very last moment. I believe they would have left it until bailiffs turned up landing the tenant with not only the £355 court fee but also bailiff costs and, as these were unlikely to be paid, a CCJ against their name. You could argue that pursuing these costs against someone with no money is morally reprehensible, but so is putting the plug in the sink and leaving the kitchen tap to run onto the kitchen worksurface, the open drawers and the flat below. Can’t see anyone fighting my corner on that one.
The lack of support for landlords to house tenants in receipt of HB is growing and this is now another reason I would have to think two or three times before considering another one. I have, however, discovered that PIP recipients appear to be able to claim more than LHA recipients – they don’t know the criteria for the higher payments and, for the life of me, I can’t find them either.
Proposed Tax Changes
How will the tax effects take effect on my business? I’m getting a headache banging my head against the accountant’s office wall on this one. Partnership? Limited Company? Moving to a tax haven? Remortgage to the hilt or sell the children’s vital organs to pay off the mortgages? Big refurbishment projects or squeeze all the rent out you can whilst avoiding repairing that leaky ceiling or malfunctioning boiler?
Until I receive concrete answers I’ve swapped Nurofen for Sainsbury’s own brand Ibuprofen.
Profit vs Income
How can I make enough of a profit it to make it worthwhile? Being an HMO landlord is a thankless task – your tenants really don’t care about the amount of money invested. This week:
Raw sewage flooded the garden after not one tenant reported blocked drains.
Just refurbished a kitchen and re-kitted it for £10,000 and installed a tumble dryer. Not one tenant acknowledged this except to moan that they had to use a launderette for a week.
Cleaning – halfway through the tax year and I’m astounded at my cleaning costs. This led to an overall view of profit for this financial year. More on this below:
Ban of letting agent fees
My husband and I run a letting agency – it’s cost effective, efficient and we work damn hard at it seven days a week. We don’t have targets, flashy cars, a high street presence or branded pens which keeps our operating costs low. One of the major areas of the business is student lets. Now, I understand that some agencies have built their business models on letting fees and indeed friends have told me of the eye watering amounts high street agents charge just to consider a tenant for a property. We charge a £100 fee per person which covers ALL admin tasks – credit checking, ID checking, reference checking, ASTs, check in, check out, a welcome pack, a household instruction folder, a key fob with our contact details on AND informing the council tax and utility companies of a change of occupier. The same price is for students but we have the added effort of not only referencing them but also their Guarantors – the admin for a student let can take months to track down probably because they have to physically print the paperwork sign it and discover how to use the postal service.
So, there’s a ban on letting fees. But what does this actually mean? I can’t find any parameters – does it cover the check in/out costs, deposit scheme costs, issuing ASTs? If you’re going to make something a rule then for goodness sake, give us some flippin’ detail to work to!
The Future of Property
What is the future for anyone in property without the surname Trump or Candy? Most of us have invested as an alternative or top up to our woefully inadequate private pensions we’ve been paying into for decades. How do I advise new investors of all ages who regularly contact me via this blog and have found themselves on the road to believing HMOs are income generators? We have 5 HMOs and, if wealth gurus were to be believed, the income should be keeping us smelling of roses. The reality is that it is ploughed back into the properties through repairs, wilful damage, high wear and tear and utility bills as all of these elements are the Landlord’s responsibility. It’s a business, not a lifestyle.
Another question: How will any of the decisions made by Government solve the housing crisis? Yes, greater control should be applied to ROGUE landlords sticking two fingers up at the law and their unfortunate tenants, but putting in preventative measures to increase the supply and running of rental stock and providing no alternative choices is not encouraging a free market. Their policies are creating unrest, misery and adding letting agents and landlords to the list of Most Hated Professions.
One final question: with the increase of food banks, homelessness and concern over personal debt – where the heck did the UK find £2bn to spend in the shops on Black Friday?!
Over the last few weeks I’ve read opinions, forecasts, proposals, consultations, Brexit-blaming content and online comments but, like a TV with 200 channels to watch and naff all on I want to see, I’m not finding any answers to my questions. Perhaps I’ll have more luck reading my horoscope ………….