A landlord’s stark warning to tenants on legislation impact

A landlord’s stark warning to tenants on legislation impact

9:50 AM, 28th March 2024, About 3 weeks ago 44

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A landlord has warned that “tenants will suffer the most” if new legislation and regulations get the green light.

Mick Roberts, one of Nottingham’s largest landlords told Property118 about the harsh realities facing both sides of the rental divide.

He also says selective licensing is causing chaos for landlords in Nottingham.

Help tenants find a place to live

Mr Robert’s journey as a landlord has led him to become one of Nottingham’s largest landlords accommodating benefit tenants, though this wasn’t his original plan.

He explained to Property118: “I officially started in 1997. The first house I purchased was for a friend who was struggling to find suitable accommodation for his family.

“They were living in a cramped flat, so I decided to buy a house and rent it to them.

“The mortgage amounted to £150 a month, and I charged them £300 a month for rent. That’s how I got my start in the private rented sector.”

He adds: “It wasn’t initially my intention to house benefit tenants. Tenants were desperate, and I gained a reputation for accepting anyone.

“Before I knew it, my tenants were spreading the word to their friends. I also related to the tenants because we were on the same wavelength.”

Mr Roberts decided to stop buying any more houses in 2004 but got coerced to buy more houses in 2008 by letting agents.

He explains: “I originally didn’t want any of the houses I bought in 2008 but the letting agents were begging me to buy them.

“The agents couldn’t sell them because of the financial crash in 2008 and just could not give houses away. The agents were selling for half price, so I decided it made financial sense to buy them.”

Landlords have had enough of licensing

Mr Roberts says he has now stopped buying houses to help tenants since Nottingham City Council introduced its first selective licensing scheme in 2018.

He told Property118 that many landlords in Nottingham have been selling up because of selective licensing.

“Since the licensing scheme has been introduced it’s been making me go crackers” he said.

“It is true that the licensing scheme has found some bad houses. However, the majority of houses have now got worse as landlords are spending the funds they did have on the licensing scheme.”

He added: “A lot of landlords have had enough now and are selling up because of licensing. It’s not rocket science if you’re faced with spending £900 on a licence fee or needing to invest £3,000 in renovating a tenant’s kitchen, you simply can’t afford to do the kitchen because the council takes the money.

“That’s what we’ve found out about licensing it’s more paperwork and made landlords more selective when choosing tenants.”

Licensing forced retrospective changes

He adds: “The problem is licensing has forced a lot of retrospective changes on tenants when they’ve already lived there for 20 years.

“For example, I’ve got a 68-year-old tenant who has been with me for 21 years but licensing now says I must inspect the property. Why do we have to do that – is she not trustworthy?

“What licensing should do is say to landlords, ‘Any new houses you buy or any new tenants you get, you will be subject to these conditions’ rather than it being retrospective.”

When approached by Property118, Nottingham City Council claimed that the licensing scheme does not generate any profits.

“We had to make an evidence-driven case to the government over selective licensing which was firmly based on the legislation and guidance.

This was approved by the Secretary of State to run in certain areas of Nottingham. Selective licensing is not income-generating – councils are not designed to make a profit. Licence fees solely cover the cost of setting up, operating and delivering the scheme in the city.”

Negative stereotypes of landlords are not helping tenants

Mick also told Property118 that the negative stereotypes of landlords by the media are not helping tenants in the private rented sector.

He explains: “It’s self-programming, isn’t it? You automatically think of Mr Bad Landlord. However, when you cut a landlord’s choice away then many landlords are simply going to say, ‘I’m not going to give you the home in the first place’.

“Since 2015, when George Osborne introduced Section 24, it’s snowballed as many landlords are simply not making a profit.”

He adds: “Why are tenant groups like Generation Rent and Shelter calling for legislation like the Renters (Reform) Bill which is going to ban Section 21?

“This is obviously going to cut supply as landlords will leave and tenants won’t be able to get anywhere. People need to stop assuming that all landlords charge a fortune because a lot of us aren’t.”

Mr Roberts adds he wishes to sell many of his properties but is unable to due to his tenants.

He explains: “I wish to sell a lot of my properties but can’t as, my tenants can’t get anywhere. Some of us have morals and a conscience, but also I’m not going to last forever.

“During my interview with Radio 5 last year, the discussion revolved around the basic human right to have somewhere to live. While I acknowledged this right, I raised the question: should it solely be the landlord’s responsibility to ensure everyone has a home?”

“Why should I continue to be a charity, I’ve had no holidays and worked 16-hour days for many years as a landlord trying to do my best.”

Government should listen to landlords

Mr Roberts adds the government needs to listen to landlords to help them stay in the private rented sector.

He said: “We are the ones supplying the houses for the market. The government should be coming to landlords saying, ‘What can we do for you because you are all selling up?

“I would say to the government ‘come and talk to my tenants and ask them what they would like’. There’s no communication from the government at all, they just listen to a few groups who think all landlords are bad with bad houses when in reality we are not.”

Mr Roberts says he would like the government to change Universal Credit. He says he has now stopped accepting benefit tenants because of the UC system.

He said: “I’ve stopped taking benefit tenants now not because of them but because of the Universal Credit system.

“Universal Credit is great in many ways, but the direct payment is a massive problem. If a tenant hasn’t paid, then there’s a safety net to say the tenant is in arrears.

“Very often they are just reverting payment back to the tenant and it’s making people homeless.”

A Department of Work and Pensions spokesperson told Property118: “Claimants on Universal Credit are expected to pay their own housing costs out of their monthly Universal Credit award. This helps to reduce welfare dependency by mirroring the world of work.

“Direct payments are considered for claimants who are unable to manage their single monthly payment, and as a result are at risk of financial harm. Once set up, direct payments can only be removed at the request of a claimant if it is deemed to be in the claimant’s best interests.”

Skewed perception among renters groups

Mr Roberts highlights that organisations like Citizens Advice tend to receive a one-sided narrative from certain tenants.

This can result in policies, like advocating for EPC C ratings for rented properties, which may not address the needs of all tenants.

He told Property118: “Citizens Advice are generally really good but they are misunderstanding the situation for some tenants.

“The good tenants, enjoying a cosy home with a new boiler, have little reason to reach out to Citizens Advice. This creates a skewed perception among renters groups, as they primarily hear from those facing issues.

“Then suddenly, tenants are told: ‘We’re tearing apart your nicely decorated home to install insulation in the walls and floorboards, saving you £30 per month on gas and electric bills.’

“Citizens Advice don’t realise that a tenant’s original cheap rent of £600 will go up to £900 just to save a tenant £30 on their utility bills.

“Citizens Advice think that all tenants are being ripped off as they only hear from the aggrieved ones. The government are forcing retrospective changes on us when in reality the majority of tenants don’t have a problem. “

Tenants will suffer the most

Mr Roberts says the future of the private rented sector looks set to get worse.

He said: “I think it’s either going to get worse for another 10 years or it’s going to take 10 years to turn it around.

“Landlords are just not trusting anyone at all now, and at the end of the day it will be the tenants that suffer the most.”

To find out more about Mick Robert’s thoughts on selective licensing and what he thinks will happen if a Labour government is elected, watch the video below.


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Comments

Cider Drinker

9:41 AM, 28th March 2024, About 3 weeks ago

Absolutely spot on.
It’s not enough to claim…
…𝘵𝘩𝘢𝘵 𝘵𝘩𝘦 𝘭𝘪𝘤𝘦𝘯𝘴𝘪𝘯𝘨 𝘴𝘤𝘩𝘦𝘮𝘦 𝘥𝘰𝘦𝘴 𝘯𝘰𝘵 𝘨𝘦𝘯𝘦𝘳𝘢𝘵𝘦 𝘢𝘯𝘺 𝘱𝘳𝘰𝘧𝘪𝘵𝘴.
What is clear is that it (like many Council services) does not generate any added value. At least, not enough added value to justify the £900 cost. Just because Councils are so wasteful that they can spend £900 per property on nothing tangible doesn’t justify Selective Licensing.
Give my company £1million and I’ll pay staff £1million. In return, I’ll do nothing other than claim I’m not making a profit.
Selective Licensing looks like a scam, walks like a scam and quacks like a scam.
And it is tenants that (quite rightly) pay for it in the end.

Monty Bodkin

9:59 AM, 28th March 2024, About 3 weeks ago

I've sold up in Nottingham, a major reason was landlord licensing.

Keith Wellburn

11:16 AM, 28th March 2024, About 3 weeks ago

Reply to the comment left by Cider Drinker at 28/03/2024 - 09:41
City of York Council whinging they need to save £11m to avoid bankruptcy - then tell me nearly £1,400 is good value and ‘“only covers costs” for an additional licence for a 3 bed HMO.

I’ve been in business and a landlord for decades and now nearly out, being lectured about value for money by those that, as a group, couldn’t run a cake stall at a church fete and come out with a profit is just about the final straw.

roger radford

11:25 AM, 28th March 2024, About 3 weeks ago

I have two 1-bed flats that I let. In the first, there is a 60-year-old on UC who has suffered two minor strokes and has diabetes and other ailments. Although I now get his UC paid directly to me, he initially fell into 4k of debt. He applied for council hardship
allowance twice but was turned down. The council
said he should apply for PIP, which he has now done, and pay it to me in order to maximise his monthly rental bill. They said he should then re-apply for the hardship allowance. Don’t hold your breath. In the second flat, I have a married couple on UC. There were no children when they moved in; now there are two. The council licensing authority at first said the flat was now overcrowded (which it is). I issued a Section 21 even though my tenants (not the cleanest, and the wear and tear is excessive) have always paid the full rent on time. The council then retracted and said the two children were still under the age of eight, so it was no longer regarded as overcrowded. The tenants, who want a 2-bed council flat, told me the council told them they would have to force me to issue a s8 eviction order (at great cost to myself) before they could consider re-housing. “Sit tight and stop paying the rent. Force him to act,” they quoted the council as telling them. Ah, such beautiful ethics. The tenants haven’t done so….as yet.

richard fuller

11:25 AM, 28th March 2024, About 3 weeks ago

listen to mick run my portfilo simiar tenants how to you tell 80 years olds who have been tenants on fair rents. for over 20 years made it their home,paying 6.94 % 14 rate rises and the crazy section 24 cant keep loosing thousands .got to sell agree with every thing mick says.

Michael Johnson - Amzac Estates

12:24 PM, 28th March 2024, About 3 weeks ago

I have a lot of respect for Mick Roberts as he certainly is happy to have UC tenants. As a company we would not entertain UC claimants and in fact as Welsh regulators have become increasingly hostile to the PRS we have reduced our exposure to residential property from 89% of our portfolio to 45%.
However there is no sentiment in business and whilst Mick is acting with the best of intentions Nottingham local authorities could not care less about his feelings or the tenants. Once their skewed ideology takes hold a group mindset takes hold and nothing will change their behaviour. We have seen the same behaviour in other cities where rent controls have been introduced and its dysfunctional policies take hold. As I understand there are no perfect solutions there are only trade offs and the current authorities are trading off ideology against homelessness. Ultimately you keep attacking the small PRS landlord and you will end up with much larger landlords who only care about return on investment

Ian Narbeth

12:38 PM, 28th March 2024, About 3 weeks ago

Reply to the comment left by roger radford at 28/03/2024 - 11:25
If you can prove the Council employee said this and if the tenants stop paying rent, you might have a claim in the tort of interference with contractual relations against the individual who said it and the Council.

It might be worth sending a letter to the Council recording what was said and asking them to confirm or deny it, without initially mentioning tort,

Cider Drinker

12:43 PM, 28th March 2024, About 3 weeks ago

We should convert to AirBnB and help to make the housing crisis worse. Just 15 weeks occupancy at £350 per week would see my 3 bed make as much as it being rented to tenants.

James Sim

13:34 PM, 28th March 2024, About 3 weeks ago

If only anyone other than landlords actually read this!

I keep being told that the PRS is growing? I don’t know who is growing it, because it’s certainly not me. I’m shrinking mine and will eventually sell up entirely, which is a pity, as I’d class myself as a good landlord and carried tenants through the mortgage rises in negative equity, only raising the rents as they could afford them. Which was the opposite of the banks, who just put mortgages up every six weeks with no thought for the damage they were doing - all in the name of there spread sheets.

I’ve had enough, the so called charities are doing more harm than good, as are the stupid councils.

I keep saying it, but no one listens, deal with the bad landlords and give the good ones something worth investing in. Only then will things get better, but right now good landlords are being driven bad, and bad landlords are getting away with it - it’s madness!

Mark Alexander - Founder of Property118

14:56 PM, 28th March 2024, About 3 weeks ago

Excellent interview. All that was said needed to be said and needs to be heard.

I am requesting all Property118 members to share this article onas many Social Media groups as possible and to add @highlight and @everyone in the comments to help it go viral.

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