A planning expert has highlighted that new class order legislation calling for property investors to apply for  consent when opening a new house in multiple occupation (HMO) may be a misinterpretation of the rules and planners may not have the right to refuse the proposal.

Read the full story

Local councils are maintaining a confidential database on private shared housing landlords across London, Property Investment Expert can exclusively reveal.

The information classes a landlord as “good, bad or average” and is the basis of decisions of whether the landlord is a fit and proper person to get a licence for managing a house in multiple occupation (HMO).

Other councils outside London are also adding landlord information to the database – and the database could become a countrywide tool for councils to track HMO landlords.

Existence of the database is just one of several pieces of previously behind-closed-doors HMO information revealed in a document published on the Communities and Local Government Department web site called Evaluation of the Impact of HMO Licensing and Selective Licensing that is free to download from the CLG web site.

New laws imposing stricter licensing and planning controls on shared housing start from April 6, 2010.

In commenting on the database, the document says: “A London authority promoted a database for recording information about landlords. It is a London based database that records whether a landlord is ‘good or bad or average’. The benefits of such a database are that it accepts that landlords may have properties across a number of London boroughs.

“Many landlords may have properties in locations across England, this database is now being populated by some authorities from outside of London, and the extension of such a database could provide some assistance to local authority officers assessing the fit and proper status of landlords and managing agents.”

Precise details of the information kept on the database is sketchy, but councils check several details about a property owner or the person they elect as the manager before granting an HMO licence.

The council will run a background check on the proposed HMO licence holder to check out if the applicant:

• Has convictions relating to violence, drugs , sexual offences, or fraud.
• Has breached housing, landlord, tenant or unlawful discrimination laws
• Has contravened any HMO code of practice as the owner or manager of any other HMO

Property Investment Expert editor Steve Sims uncovered information about the database when researching a guide to new HMO regulations available from the web site.

“Good landlords have nothing to fear from a database,” said Steve Sims. ”The problem in this case is the councils are keeping sharing this data behind closed doors and no one has any redress to check the data held about them or to question how a council officer rates tham as a landlord.

“This database needs to be brought out in to the open so anyone who is listed has a right of reply. The councils swapping information need to prove they have proper security and access controls in place as laid down in the data protection act.

If this was a database that rated tenants – and there might well be one for all we know – all sorts of groups would be making a hue and cry about breaching rights. Landlords have the same rights as tenants and in this case, a right to know what is recorded about them in secret. ”

Click here for more details or to buy and instantly download the HMO licensing and planning rules guide for just £12.99.

Making sure a tenant pays the last month’s rent before leaving is often a problem for landlords, so here are four tips from the experts at Student Landlord Magazine to help get that missing money.

1. Never match the tenant’s deposit to the rent.

Deposits should never be the same as a month’s rent or a multiple of weekly rent.

For example, if you have a shared house with four students in and you charge each £60 a week for rent, the deposit should never be £260 (£60 x 52  weeks divided by 12 months)

Rounding off the deposit like this lets the tenant make the mental leap that the rent equals the deposit.

Set your deposit as an odd number that is not divisible in any way by the rent, like £295 or £287.

2. Don’t set the rent as 12 monthly payments

Students are paid loans and grants in instalments – at the start of the three academic year’s terms. That’s the time to take your rent – when they are flush with money.

This also gives you better cash flow and cuts administrative costs.

If you can’t get three payments, use the 10 over 12 system like the council charges council tax. For our £60 a week student, that’s £60 x 52 weeks divided by 10 = £312 per month.

3. Check your tenancies don’t end over the summer

Most tenancy agreements run from July 1 until the end of the following June. Don’t let your agreements expire over summer because students away on holiday have little incentive to pay.

4. Add a guarantor to the agreement

Reference guarantors so you have someone you can find, like a close relative, if the tenant skips without paying.

Councils load HMO licences with “onerous, unreasonable and unnecessary” conditions, reveals a shared housing licensing report to the Communities and Local Government Department.

The report accuses some overbearing councils of losing the confidence of landlords and is the latest of a line of exclusive shambolic HMO revelations about incompetent councils from Property Investment Expert (Click here for related stories – opens in new window)

An example is one landlord with five mandatory licensed HMO properties who successfully appealed to a residential property tribunal (RPT) against a number of discretionary licensing conditions.

The three main issues were mandatory membership of an accreditation and tenant vetting scheme, allow the fire service to carry out an educational visit with tenants and the annual service of fire extinguishers.

The council officer in the case noted that the RPT stated that these conditions were “too onerous” and while some elements of the original conditions remain they have been “watered down”.

The report detailing the criticism of HMO licensing, called Evaluation of the Impact of HMO Licensing and Selective Licensing is free to download from the CLG web site.

“Conditions which are considered unnecessary are those that are already covered by alternative legislation concerning tenancies or the requirement to provide a rent book if the rent is paid weekly,” said the report.

“Onerous conditions require the landlord to do something additionally time consuming to achieve little benefit, like one case study in the north west that stipulated the [landlord's] requirement to provide each occupier with a printed copy of government legislation. “

The report also criticised some councils for having too much of a preoccupation with safety standards.

The details were discovered by Property Investment Expert editor Steve Sims while researching a guide in to new HMO planning and licensing regulations that came in to force yesterday (April 6) available from the Property Investment Expert.

“These councils are making HMO property investors jump through hoops for no good reason – and are abusing their powers,” said Steve Sims. “They either don’t know the law or don’t care and it’s about time someone spoke up against bullying councils on behalf of demonised landlords who are often the victims too scared to speak up in fear of losing their HMO licence and their livelihood.”

Click here for more details or to buy and instantly download our HMO planning and licensing guide for just £12.99.

Today is the day local councils take up wide-ranging  planning and licensing powers to control shared housing in England

H-Day – short for HMO Day -  means investors have to apply for planning permission to build or convert a property in to a house in multiple occupation or HMO.

Properties are also subject to mandatory licensing that encompasses any residential property shared by three or more tenants who are not related, which brings any home let to students, friends or work mates in to the HMO net.

Although mandatory licensing still applies to properties governed by the old rules, the new legislation applies to any property, like flats, bungalows and two-storey houses.

Besides planning changes, councils can apply selective licensing to neighbourhoods they consider blighted by shared housing offering poor conditions to tenants or where they think tenants are the root of antisocial behaviour caused by rowdy parties, parking problems and rubbish dumping.

In these areas, councils can apply special licensing conditions aimed at restricting the number of shared houses.

Councils in Cardiff and Weymouth have already announced their intentions to invoke selective licensing – and Gwynedd County Council wants to make the whole county subject to extra licensing controls.

Little information is available for HMO owners about the new planning and licensing regulations, so Property Investment Expert has produced a special in-depth guide outlining the legislation plus details of councils abusing their HMO licensing powers and how to appeal poor council decisions that affect multiple letting businesses.

Click here for more details or to buy and instantly download the guide for just £12.99.

Shocking revelations about councils wrongly applying shared housing regulations that can cost private property owners thousands of pounds without redress have led Property Investment Expert to start ‘naming and shaming’ the culprits.

Property Investment Expert will investigate problems and ask the councils for an explanation to publish online and in the public domain.

The aim is to raise council awareness of HMO regulations and to encourage them to apply standards and licence conditions in a uniform fashion.

Councils were given new planning and licensing powers to control shared housing by the government from today.

Property Investment Expert has uncovered that councils often make mistakes in applying the law, according to reports on the Communities and Local Government (CLG) web site.

These include:

• A landlord spending £400,000 on upgrading 150 shared houses with new wash basins to meet government standards – only for the council to say they were not needed a year after the work was completed
• A council employing six officers to enforce HMO licensing on all HMOs in the area only to find only a small number required a licence by law
• A landlord winning a tribunal forcing a council to retract over onerous HMO licencing conditions

The CLG document also confirms councils and the government do not know how many unlicensed shared houses are operating in England.

Also revealed is information about a confidential database maintained by an unnamed London council that rates shared housing owners as “good, bad or average” landlords -  and landlords have no right of redress or access to what the database says about them.

“Clearly poor advice and training in often under resourced councils is costing property owners thousands of pounds,” said Property Investment Expert editor Steve Sims.   “Something needs to be done to stop this continuing, so we will investigate complaints from property owners and name and shame council publically if they are found to be overstepping their powers.

“Landlords have to be taken to account and the government is intending to let tenants rate them on a web site, so I don’t see why rogue councils should not suffer the same fate.”

Download your copy of our guide to the new HMO Planning and Licensing rules now

Student landlords don’t need to have a degree in mathematics to work out the figures for multiple lettings give bigger profits for the same house than letting to a family.

This is at the heart of the current battle between government and landlords. The government want to regulate multiple lets or houses in multiple occupation (HMO) after creating the market inn the first place.

Because the house price crunch and growing number of students has eroded capital growth, landlords have turned to monetising their property investments from rents.

For many in university towns and cities, the ready flow of tenants with a need for somewhere to live has turned in to a tsunami flooding the area with cash. How does multiple letting work?

A landlord has a three bed roomed home with two receptions, a kitchen and bathroom and wants to maximise the rent.

• Option A is move in a family on an assured shorthold tenancy agreement for about £650 a month, giving a total rental of £7,800 per year at full occupancy.

• Option B is move in four students by converting one reception in to an additional bedroom. Each pays £70 a week for 35 weeks a year, giving a total rent of £9,800 per year.

• Option C is just putting three students in at £75 per room per week, for 35 weeks, giving as total rent of £7,875 per year.

The landlord’s strategy is a no brainer until April – the last options give the same or better return for less work. After April, the government is taking a share of the extra rent, if not all of it as planning and licensing costs.

As businessmen and women, landlords will tot up the costs of an HMO and revert to family lettings to save the expense of meeting stringent house in multiple occupation (HMO) compliance.

At a stroke, the government has appeased residents and councils by removing students and the related noise, rubbish and antisocial behaviour problems from neighbourhoods and created an army of homeless students.

In reality the government moves to reform the student housing sector will just reduce the availability of letting property to students – unless there’s a loophole like letting to a managing student as a housemaster who takes on the responsibility of subletting to mates.