Oxford City Council looks to be the first local authority to introduce blanket licensing for HMOs in its area, under new powers granted in April.    The new scheme will apply to every HMO in the city (apart from a few self contained flats) and will come into force on 25 October.

Oxford, a university city, has about 5,000 HMOs which is one of the highest in the country (only the large conurbations have more). According to the Local Authority web-site:

They form an unusually high percentage of houses in the city with 1 in 5 of the resident population living in an HMO. The House Condition Survey 2005 reported that HMOs provided the poorest homes in the city and that 70 per cent were unsafe.

HMOs generate over 2000 service requests/complaints a year to Oxford City Council and the number of complaints have risen steadily over recent years, despite surveys indicating many problems go unreported.

They are also associated with issues that affect the neighbourhood such as rubbish and anti social behaviour which can occur because of poor management of the property.

Many three story HMOs are already licensed under the existing licensing rules.  However,  Councillor Joe McManners, Board Member for Housing said:

Local residents in Oxford have told us that the Council needs to do more to control the impact of HMOs and we’ve listened to what they’ve had to say. We’ve tried using all our existing powers but they haven’t been enough to make the difference that is needed. We believe that additional licensing will provide us with those extra powers that we need and that it will have a really positive impact.

Our aim is to improve the living conditions for tenants within HMOs as they provide the worst accommodation in the City.

The cost of HMO licensing

At about £591,931 per year, the scheme will be quite expensive, although the Council are adamant that it will be covered by the licensing fees.  However others are not so sure.  Jan Bartlett, owner of Cowley Road firm Premier Letting, speaking in the Oxford Mail said that the cost could be prohibitive if landlords don’t pay the license fees:

The scheme will be difficult to police and bad landlords just won’t sign up

She suggested that the Local Authority save money by using local letting agents to police the scheme instead of hiring new staff.  Although presumably she is not suggesting that agents perform this public service service for nothing.

Do you live in Oxford?  Do you have any views on this?  Will it, in your opinion, solve the problems HMOs cause in the city?

Note: Since publishing this post, Pain Smith have indicated through their blog that the the scheme has potential to be challenged, and that they would be prepared to act on such a claim on a no win fee basis.  Any landlords wanting to take advantage of this, can contact Pain Smith here.

My second ‘Notable Property Person‘ is Kate Faulkner, a well known property person, particularly for her books for the consumer organisation, Which and her association with Channel 4. Here are her answers to our questions:

1. Please introduce yourself. Say a bit about yourself and your company

I live and breathe property both at work and home and I bring a refreshing change to the property market by offering practical, down to earth advice that really helps people carry out their property projects successfully. I write daily on property, and help people successfully carry out their own property projects via my own website: www.designsonproperty.co.uk and blog: Facts Not Headlines. I have written six property books, including four for Which? (Buy, Sell, Move House; Renting and Letting; Develop your Property and the Property Investment Handbook) and articles for magazines and newspapers as well as appearing on TV, and radio.

My property experience is part personal, having bought, sold, renovated, rented and invested in property and business. I have also worked in relocation, launched the National Self Build and Renovation Centre in Swindon, set up a property portal, carried out part exchanges on behalf of developers and worked in lettings and carried out contracts for property investment companies and specialist property market research for social housing.

My business www.designsonproperty.co.uk is a portal for anyone to find out how to carry out property projects and access the very best property services from legals (such as Tessa!) to property tax or even an electrician.

2. How did you first become involved in property?

My brother, sister and parents all bought in the summer of 1989 and then my brother and sister both went into negative equity and mum and dad’s house dropped in value. I decided I didn’t want to be in that position, so started to research hard to find properties at a discount in areas that would grow in value. After 10 years of working with Unilever and the likes of Sainsbury I decided to transfer my business skills to work in property full time, set up a property portal and a business growth consultancy for property companies.

3. What do you think is your greatest achievement so far?

It’s hard not to say getting the National Self Build and Renovation Centre fitted out and launched. It’s certainly the biggest thing I’ve ever been involved with being built as it’s 67,000 square meters. I am very proud of the Centre and the fantastic team I worked to secure the monies to fund it.

4. Do you or your company have any exciting plans for the future?

Yes we do! We are about to launch two new services. The first is a comprehensive, independent ‘Buy to Let Pack’ for investors who are about to or want to run the best BTL business. The second service provides people with a choice of the best services we can find from mortgage advisors to tax and EPC providers.

5. What do you think are the greatest problems facing the private rented sector today?

• Not all properties will grow in value over the next 5-10 years.
• Lack of understanding by mortgage lenders of who are the ‘safe bets’ to support during the credit crunch.
• Too much, and some ridiculous, legislation by the government eg ‘trip advisor’ style website for tenants to rate landlords
• Property investment clubs taking people’s money upfront with the promise of making people millionaires within months on ‘no money down’
  or properties supposedly at 25% below market value.

6. What do you think are the greatest opportunities?

The market is set to double in the future, so demand will be huge. However you need to buy the right property in the right place to take advantage of this.

7. We have a general election coming up – what would you like to see in the winning parties manifesto as regards the private rented sector?

• No more regulation until the government can implement what it’s already introduced and the current legislation actually impacts on rogue landlords
• 100% clarity on the legality (or not!) of no money down deals
• Independent ruling on additional licencing
• Ruling that all BTL landlords must have independent financial advice and specialist property tax advice
• Ruling that mortgage advisors must be specially trained in BTL
• Tax breaks for landlords that are signed up to the local authority landlord accreditation scheme

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

I do, but we are very careful not to let it take over our lives. Our Blog and Twitter is used to distribute our own daily articles and I like LinkedIn from a professional perspective. I haven’t quite got my head around the role of Facebook, but I’d better be quick as apparently more people used it than Google in the States! I think Q&A forums for landlords and tenants are great, but not ones where you can be too personal and ones that aren’t run by professionals. It would be great if it they could be used to better educate tenants (and some landlords) on how to make sure tenants use good letting agents and landlords rather than rent from rogues.

9. What is the most important lesson you have learned during your time in property?

That there is no ‘one property market’ there are thousands, so property price reports and media headlines on them should be ignored. Also no one property project is the same. Property is complicated stuff and you need expert help to do it well.

10. What advice would you have to someone thinking of entering the property industry today?

Get to know the ‘good guys’ who think it’s good to abide by the law and see property as a long term investment, not a ‘think yourself rich’ scheme. There are so many jobs in the property industry from relocation to self build, agency work, surveying, part exchange, new build, refurb etc you can have variety for the rest of your life. I love the property industry and have tremendous respect for most of the people in it, I just wish the media would start reporting the ‘good news’ stories about property professionals rather than treating them like second class citizens.

If anyone wants to email me a question about any of the above, we run a free Q&A service, just email: enquiries@designsonproperty.co.uk

*******

Thank you Kate.  There are some very interesting points there.  What do readers think?  If you have any thoughts, please do leave a comment.

Kate Faulkner’s Books: For those who are interested in buying Kate’s books, here are some Amazon links:

• Buy, Sell and Move House (“Which?” Essential Guides)
• Renting and Letting (“Which?” Essential Guides)
• Develop Your Property: A Complete Guide to Managing, Building and Funding Home Extensions (“Which?” Essential Guides)
• The Property Investor’s Handbook (“Which?” Essential Guides)

Time is money – an article about Time Banking and how it can help communities come together. Time banking is a system of people exchanging skills, which is explained on the web-site www.timebanking.org.uk. Apparently there are 122 timebanks set up in the UK and another 89 in the pipeline

Backs to the wall – an article about how over a million householders are using their credit cards to pay their mortgages, and the horrendous debts that can be run up as a result of this

The right to buy – a debate on whether it was a triumph or a disaster. Peter King (reader in Social Thourght at De Montford University and author of Housing Policy Transformed: The Right to Buy and the Desire to Own) thinks it was a great policy, Nicola Hughes, Policy Officer at Shelter, thinks it has done lasting damage

The gentle touch – a report on the Roof conference on private renting where the governments proposed ‘light touch’ landlord licensing was discussed. The views of landlords, such as Susanne Chambers that “tenants in privately rented accommodation have never had it so good” were vigorously opposed by tenants such as blogger and journalist Penny Anderson. There seemed to be general agreement that the regulations we already have are not properly enforced, the question is, is anything more needed? I liked Green Councillor Bill Randalls comment “you need a license to clip a poodle in this country, but you don’t need a license – unless you’ve got an HMO – to be a landlord”, which puts it in perspective.

Mutual housing – an article on co-operative and mutual housing groups (very popular on the continent but less common here), looking at a report brought out by the Commission on Co-operative and Mutual Housing. The report shows that this type of housing is extremely popular with those who live in it, and that it fosters a sense of belonging, identity and ownership. The report calls for more mutual housing organisations to be set up.

Direct Pressure – an article on the problems faced by tenants who find it difficult to handle money and who are tempted to spend their housing benefit, which under the current Local Housing Allowance rules, must be paid direct to tenants and not paid to landlords, on other debts. Examples are given by Pastor Pete Cunningham from the Green Pastures Foundation, a leading housing charity which houses vulnerable people, who says that the resultant rent arrears are putting organisations such as his, under enormous strain.

Tenant satisfaction – an article about Giroscope, a community based housing organisation in Hull which buys and renovates empty and dilapidated properties, which are then rented out to those in housing need. It does not ask for deposits or rent in advance and charges a weekly rent based on what people can afford.

Finally, Jacky Peacok in her regular Tenants’ Voice column, looks at how localism can save the planet in the wake of the failure at Copenhagen. She suggests local authorities institute planned inspections of all properties in their area, to identify energy saving measures, and to enforce these. As poor health often comes from poor housing, funding could come from health budgets (on the basis of the savings they would make through the better health of local people) and from the landlords. She suggests that local community groups be given direct responsibility for managing the programmed inspection and enforcement regime. Sounds good to me, although I doubt whether the Health Authorities would agree.

These are just a few of the many excellent articles in this issue.

Note: Sadly, since this post was written, Roof has ceased publication.  A great loss.

Is this your experience?  And if so, do you think that this is really going to solve the problem? Do you think that Council’s already have enough powers under the Housing Health and Safety Rating System (HHSRS), and that the problem is really more one of Councils not having enough manpower? Or do you think that extending the licensing regime is essential, because it means that the bad landlords don’t get away with it, as all landlords have to be inspected?

I would be interested to hear your views.

As regular readers of this blog will remember, mandatory licensing for the larger HMO properties was introduced by the 2004 Housing Act which came into force (in this respect) in 2006.  As the act introduced many major changes, not just licensing, it has not surprisingly taken local authorities some time to get to grips with the basic licensing requirements.  However many, having done this, are now considering extending their reach, including it seems, Cardiff Council.

Cathay ward is a suburb in the North of Cardiff.  It is a traditional  area with a lot of victorian type housing, and very densely populated.  It also suffers from ‘studentification’, as it is close to both Cardiff University and the University Hospital of Wales.

Althouth the Council recognise that many of the student landlords in the area are responsible and provide decent accommodation, many others do not.  The problems it seems are serious and the Council have decided that the best way to tackle them is to introduce mandatory licensing for all HMOs in the area.

Cardiff Council have produced a rather nice pdf consultation document which can be downloaded from here.  From this it seems that the main problems are:

• Lack of proper fire precautions and safe escape routes
• Poor standards with inadequate amenities such as no proper heating
• Tatty exteriors and gardens, with too many ‘to let’ boards
• Problems with rubbish and fly tipping on the streets
• Crime issues (student properties being targets for burglars)

Licensing would help with all of these, as properties will have to be in a proper condition and the landlord or manager must be a ‘fit and proper person’, before the license will be granted.

The move has been welcomed by the Students Union who say

“We are 100% behind the consultation. It’s probably one of the biggest problems students find that we continue to deal with. It ranges from damp, poor quality houses, houses not being finished when tenants move in, not enough security with old doors and windows, making them easy to break into

The licensing scheme looks into fitness of character to rent a property. Checks are done on the landlord before awarding a licence. It will go a long way to solving students’ problems.”

Needless to say, the Chairman of the local Landlords Forum is less enthusiastic, saying  “The local authority has more than adequate powers. It doesn’t need anymore. It has plenty in its armoury to find the bad landlords.”

Maybe the proposed license fee of £500-600 has something to do with landlords lack of enthusiasm.

It will be interesting to see how the proposals work out in practice.  The consultation ends on 15 December, so if you are from Cardiff and have strong views on this, now is the time to tell the Council about them.  It is important that the Council gets the process right, otherwise HMO prosecutions could be challenged in the future as discussed here.

If you are from Cardiff and have any views on this, feel free to post a comment below.  Also if you are  know of any similar initiatives to tackle ‘studentification’ in other cities.