Tag Archives: HMO

Implementing the Immigration Bill

The phone rings late one night last week.  It’s Erica, sobbing hysterically down the phone in broken English that her new husband, Harry, had been taken into custody and she didn’t know what to do.

Harry and Erica married last month; she’s Polish in her late thirties and he’s Indian in his mid twenties.  She swears to me it’s mad, impulsive, passionate love and he just smiles and nods in agreement.  They’re hard working, quiet, pleasant and an asset to the house and, quite frankly, anyone who can put up with binge drinking Tom and not moan to me about it, becomes a star tenant.

The story goes that Harry and two friends had been walking down the street that night. On spotting a police car, they pulled their hoodies over their heads and dashed into Ladbrokes.  The police watched as the men wandered Continue reading

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Benefit Tenants – The Reality of When It Goes Wrong

You may remember a few months ago I told you the story of Joe who turned up on the doorstep, courtesy of a friend, with pennies in his pocket and a cat called Bill.

His accommodation story has now ended; after being awarded the local housing allowance of £67 a week and various promises of being able to afford the £33 a week top up, Joe received his benefit and managed to spend the lot. Various texts, telephone conversations and letters ensued to which he replied with protestations that he’d been to the bank and paid up. He progressed to a raft of excuses relating to poorly relatives and his own mental health issues, ending up at the “nobody likes me any more, I have nothing to live for” attitude. Eventually, he admitted he’d spent the lot.

But what on? He didn’t look like he was into drugs, drink or gambling but consistently never had any money. Eventually, even the cat got fed up of him and left the house last week and hasn’t been seen since. His housing worker and friend finally persuaded him to give up the room, leave the telly I’d bought and the keys and take up a work offer abroad before I submitted court papers under a Section 8 notice.

On clearing out the room I found out what he’d been spending his money on – SHOES! Pairs and pairs of shoes but none worth having despite us having the same foot size.

Eviction Looming

The current case we’re working on is that of 3 friends all claiming LHA who moved into a 3 bed house. Within a month they’d fallen out with each other (having been friends for over 20 years) and one of them left after the fixed period; they couldn’t find a replacement because they weren’t talking to each other and can’t leave because no other landlord wants the remaining two. They now have their Possession Order dated for next week and their benefit payments have been stopped.

I recently watched an interesting interview with Vanessa from Property Tribes and Kent landlord, Fergus Wilson. He said in one of the videos (you may need to watch both) that he doesn’t believe it’s up to the PRS to house the poor and needy (or in my case, mentally needy). At first I was shocked but after listening to his reasoning and based on my own experience, I’m actually starting to agree that the majority of the PRS landlords are simply not geared up to handle the social issues which accompany those tenants who don’t have a support network and are not mentally or mobility impaired enough to qualify for Supported Housing.

Those landlords like me who are happy to take a chance on someone claiming Housing Benefit are left out in the cold. When Joe’s rent was eight weeks’ in arrears I followed procedure and applied to the council for his benefit to be paid directly to me. At the same time, I emailed the council to find out whether they would act to home the 2 sitting tenants upon receipt of the Possession Order, the expiry date on the Order or when the bailiffs turn up to evict them. To date I have received absolutely no response. (But I’d rather say “Sweet F.A.”.

So, what will bring the plight of those not bright or able enough to hold down a tenancy in the PRS to the attention of the Government? The councils are fully aware of the scarcity of housing and prioritise need based on a banding system but even those people at the top of the waiting list spend their days with their fingers cross to find a secure base to call home. We’re based in Eastbourne and are lucky to have numerous promenade shelters and benches overlooking the sea . Perhaps when these are full and the octogenarian tourists from Up North, on their morning constitution, trip over the unfortunates and their empty cans of Special Brew, someone may raise a cautious hand in protest.

Keeping The Faith

Will I take a chance on a housing benefit tenant again? Of course I will. I like diversity in the HMOs and someone needs to be at home to put out the bins, let the plumber in and give a damn about the house. In fact, I’ve just offered a tenancy to a lovely 28 year old girl with a muscular disease who is currently sofa surfing which exacerbates her condition. She used to work in an office, shared a flat with a friend and was then struck down with this ongoing illness. Suddenly no one wanted to offer her a tenancy after her friend sold the flat. She’s ill enough to qualify for a PIP (Personal Independent Payment) and ESA (Employment Support Allowance) but not ill enough for Supported Housing. Talk about being caught between a rock and a hard place – that goes for both of us.

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No Home Comforts for Those on Housing Benefits

I’m reluctant to publish guest posts, but this excellent article written for me by Alex Murray of Safesite Facilities neatly encapsulates my experience on the front line of accommodating housing benefit tenants. There’s an additional, heart warming story at the end to prove landlords aren’t all inflexible, greedy sods.

No Home Comforts for Those on Housing Benefits

When “non-smokers only” started appearing in property-to-let listings in the UK, it was widely acknowledged as positive action which directly reflected the attitudes of British society and its wish to be free from the stench and alleged ill-effects of smoking.

Fast forward to 2014.  Although “non-smokers only” still appears, another two words, which first crept in during 2008, have begun to take prevalence.  Again, two little words which are accommodation-ad specific, but once more seem to represent the attitudes of a society  seeking to free itself from something seen as negative, pervasive and pernicious:

“no benefits.”

Sadly though, this advertisement addendum is far from a positive reflection on 2014’s British landlords and society.

How did it come to this?

Since the coalition came to power, the days of government and public benevolence or relative even-handedness towards those claiming benefits have been numbered.  Along with the government, much of the British media have stood in line to condemn benefit seekers as “lazy” or “scroungers” whilst fly-on-the-wall documentaries such as Benefits Street seek to demonstrate to the remaining public who display a live-and-let-live attitude towards others that they might be misguided in not jumping on the judgement band-waggon; after all, an alternative programme title might have reflected the difficult cycles some vulnerable families find themselves trapped in, but no, Channel 4 chose Benefits Street.

After the frosty reception which greeted their plans for the Bedroom Tax and the on-going disability benefits and ATOS Work Capability Assessments (as in don’t give ATOS) debacle, the government then rolled out its Universal Credit scheme nationally in October 2013.  This scheme replaces, amongst others, the long-standing housing benefit and involves making single monthly payments directly to claimants.  From this, claimants are expected to make their own rent payments direct to their landlords.

Government Assurances – for the Landlords

Although the government is adamant that Universal Credit gives landlords greater protection from tenants who fail to pay – review of payments kicks in after just one month of arrears – this hasn’t been enough for landlords.

A recent survey, conducted by SpareRoom.co.uk, revealed that landlords have lacked confidence in the government’s systems for handling benefits, largely since the introduction of Local Housing Allowance (LHA) within the housing benefit system, in 2008.  This change, which also allowed payments to go direct to tenants, was identified by 88% of landlords as having a negative impact on their businesses, through late payments and damage to their property.

With their confidence, revenue and portfolios already shaken from LHA, 6 out of 10 landlords (57%) state that they now refuse to accept tenants on benefits.  Of those landlords still willing to take housing benefit claimants as tenants, over half plan to will stop when Universal Credits become fully functional (around 2016) and several large property investors, including Kent property tycoon Fergus Wilson, have already served eviction notices on current benefit-claiming tenants, as reported by the BBC.

Assurances for the benefit claimants?  Anybody?

With low levels of social housing stock, eviction notices in hand, the “no benefits” banner across the rental sector and the benefit shakeup generally causing unknowns for those finding themselves claiming benefits (including reliable, responsible, hard-working families and pensioners), what hope is there for those relying both on benefits to make ends meet and the rental sector for a roof over their heads?

In truth, not much.

Whilst the landlords can gain the same (if not more) money by letting their properties on the open market, housing benefit claimants have no alternatives, just further belt-tightening.  This is inevitable as any landlords still willing to rent to them increase rents to match their own increased “risk” and to pass on their additional buy-to-let mortgage and insurance costs, which have risen considerably for landlords renting to the benefits sector, as many buy-to-let lenders also coin in extra cash from others’ misery.

As Matt Hutchinson, the director of SpareRoom.co.uk reflects: “the rollout of universal credit is set to make the situation even worse.   With rents rising and the welfare budget suffering from further government cuts, the outlook for tenants reliant on housing benefit is getting bleaker.”  Not only that, but thanks to the divisive “no benefits” mentality pervading the rental sector, the outlook for our prospects as a cohesive, empathetic society looks pretty bleak too.

Thank you, Alex.

55p and a Cat Called Bill

A couple of weeks ago, John contacted me through a friend.  An eloquent, skilled barber who had numerous men’s grooming awards under his belt but, following a breakdown, had been forced into sofa surfing whilst trying to get to grips with his own recovery.  How easy is it to recover your self esteem when you’re sleeping on a lumpy sofa in someone’s living room, with no privacy or hot water?  His only stable, trusting relationship was with Bill, a nonchalant black and white cat who clearly has no idea he holds his master’s wellbeing in the pads of his paw.  All John had to offer was 55p in his pocket and a promise that Bill wouldn’t pee in Jim’s newly planted containers.  All I have to do is to help him fill in the forms, wait around 5 weeks for the claim to be processed and I will hopefully have 2 very happy, contented, mentally stable tenants for a long, long time (and I get to stroke one of them).

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Subletting – A Perfect Storm

Experienced landlords among you may have discovered a tenant subletting all or part of the property (with or without your permission), but as this blog seems to be attracting more first time landlords and investors I want to draw reader’s attention to this increasingly common practice.

In the nine years I’ve been investing it’s not something I’ve had to deal with in any great depth till now.  There was the chap who handed his room keys over to “a bloke in the pub” a couple of years ago but he only managed a couple of nights before I changed the front door lock due to a breach of security.  He never did contact me to retrieve his holdall and grubby Y fronts.

But when you hear that six Somalians, with false names, were discovered in a two bed flat in a small, sedate seaside town like Eastbourne, you know that it’s common practice everywhere else.  In the last 3 weeks I’ve received no less than 4 requests from tenants to move in their boyfriend and, in some cases, for their entire families to join them from abroad.  All requests have been refused based on the maximum comfortable number of people and facilities ratio.  This didn’t stop Bruno, however, who has moved his sister into his room and no amount of Google Translate can make him see that it contravenes his tenancy agreement. Her very sweet smile clearly indicated that she doesn’t give a s**t either.

Landlords and particularly HMO landlords: I urge you to make regular checks on your properties.  Some tenants will see a room in a shared house as their home and castle, others will view it merely as a cheap convenience to invite their mates over and have them all bunk down on the floor, particularly if they see this as normal practice.  Waldemar was forced into asking me if his friend, just arrived from Poland, could stay after Tom found him one day in the kitchen.  Tom likes to know who is coming in and out of the front door particularly if he’s had a skin-full and doesn’t want to assault a legitimate tenant.

And that’s the point – Tom’s drinking habits are a pain to all and sundry: the police, the tenants and me when the fire alarm call point gets mistaken for the light switch.  But we put up with him because, without him, the house would be mayhem.  Having one bossy, house proud, person per HMO means they are your eyes and ears, particularly if they’re home all day.  It doesn’t take long for a house to earn a reputation for taking in all and sundry. You start to understand why those fabled landladies of the Seventies wouldn’t allow overnight visitors.

I treat each comment made by these “house wardens” seriously, and work with them to resolve concerns.  This gives them the confidence to protect their home and not be afraid to stick up for themselves and the other paying tenants knowing they have my full backing.  It’s in their interests to know who they’re going to meet on the way to the bathroom and they value being able to sleep soundly knowing the house is secure and quiet.

What do you do if you discover an unknown person in the house?  You can’t serve notice if the tenant has abandoned the property and I don’t believe you can claim they’re squatting if the subletting tenant has keys.  Therefore, I suppose the simplest resolution is to assume the tenant has abandoned the property, follow procedure and change the locks leaving a clear message detailing the landlord or agent contact details for re-entry.  If the tenant is still in residence, it’s a Section 21 notice or a quiet word in their ear to get their guest out immediately.

If one of my tenant’s requests a guest to stay over, I impose a £25 per week charge, a maximum of two weeks’ time frame with a specific end date and expect them to introduce their guest to the other housemates.  I will also let everyone in the house know there is an extra person temporarily.

I’ve just written an article on the subject of subletting for the RICS (there’s no link as it’s a subscription only site for RICS members) and delivered a speech on the rise of Rogue Landlords for a local Toastmasters Club.  My research on the subject led me to watch Panorama’s The Great Housing Benefit Scandal; what with Ben Reeve-Lewis’ appearance on BBC2’s Rooms, Rogues and Renters earlier in the year and Housing Enforcers presented by Matt Allwright subletting is providing a food mountain for the media and a shed load of cash for the scumbag landlords.

Click on the links above, watch the programmes and it will either inspire you with ideas to adapt your business plan and capitalise on the misery of desperate people or you may hang your head in despair knowing we share the same job title of Landlord.

£600 crappy caravan yielding 1400% anyone? (Watch the Panorama programme and you’ll understand)

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All That Glitters Is Not Gold!

As yet another marketing email drops into my Inbox extolling the virtual virtues of HMO ownership,  I’ve decided I can no longer stop myself from passing comment on the increased hype of HMOs.

The email came from an estate agent I sacked last year for being useless and, eight years ago, actually told me they wouldn’t touch HMOs with a barge pole.  Why then, did they send me and possibly a thousand other property investors on their target list, promises of glittering HMO yields?

The reason, I believe, must be this:  with the rise of online and high street letting agents all scrabbling to secure properties to let, margins are thinner as they compete to offer the cheapest headline service.  However, the fees to cover their operational costs (cars, staff, rates,) HAVE to come from somewhere so they divide and spread their costs.  Here are some examples of fees levied to the tenant and landlord before a let has begun: Continue reading

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Leaking Roofs and A Drunken Call Out

Heed my warning all you new or wannabe property portfolio owners!  You may remember in this post I mentioned that, as the majority of Eastbourne (Sunniest Town in Britain apparently) was built around the latter half of the 19th century, some of the building materials are beginning to fail such as mortar and felt.  Now, on the Sunshine Coast our weather is mild compared to the rest of the country but this year the roofs have really taken a hammering in the wind and rain.  Four, yes FOUR, of my properties can no longer be patched and now require new roofs.

Perhaps more experienced, long in the tooth landlords investigate the roof condition of a potential BTL before considering anything else but from my research of Property Millionaire Courses run by gurus the focus is on the bottom line numbers/profit at no point have I seen anyone flag up what will happen or how it will affect the bottom line when a major repair needs doing which hasn’t been budgeted for.

Which roof do I pick first when looking at £10-15k apiece?  Well, obviously the one that shows the most!  So on top of delving under the stairs to look at RCD, open kitchen cupboards to locate boiler, my advice is make sure you have a good look at how well the tiles are likely to keep the rain off.

I don’t mind the investment as I’m young enough to feel the benefit for the next few decades and I don’t use the profit to live on, but if you don’t have the cash in reserve and cashflow is tight, a major expense such as this will really, really hurt if you haven’t budgeted for it.  After all, there are only so many times you can fob a tenant off with the words Continue reading

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Christmas of Domestic Disturbances

Happy New Year and welcome to a first globally bumpy week of 2015!  The events around the world over Christmas and the last few days have certainly put any trivial issues I have into perspective.

Christmas Disturbance

At 11.30pm on Christmas Eve, whilst digesting the contents of Swedish Christmas Eve dinner and discussing the origins of Elk meatballs, the phone rang to say one of the tenants was locked out.  It was minus 10 degrees where I was so I felt sorry for them, phoned a friend who was holding the keys, organised re-entry only to discover in the meantime the tenant had rung the doorbell and, lo and behold, someone bothered to let her in.  Sometimes, it doesn’t pay to be too reactive.

A few days later, I was enjoying a bit of TV catch-up Downton Abbey by the fire when a tenant called at 10pm which I ignored and they could leave a message if it was urgent.  His persistent ringing punctuated my daydream of owning a team of domestic workers (Downton had THREE nannies, for goodness sake!) and I threw a coat over my pyjamas to head down to the house.  One very cold night, two police cars, four bored policeman, a tenant clutching an arm, another sobbing in her room and a howling, ranting Portuguese called Amaro banging around in the back of one of the police cars.

Amaro’s girlfriend, Kalina, was 30 minutes late home from work and he was waiting for her.  Continue reading

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