Property118 Landlords Association – should we?

Property118 Landlords Association – should we?

15:44 PM, 3rd May 2016, About 7 years ago

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Property118 Landlords AssociationHaving raised over £500,000 to take West Bromwich Mortgage Company to the Court of Appeal it has been suggested by numerous Property118 members that we should become a Landlords Association.

Sentiment appears to be that a group with courage to take legal action against rogue mortgage lenders and poor decisions made by Government is seriously needed in the UK Private Rented Sector.

Subject to levels of interest this is something that we are willing to consider further.

Towards the bottom of this article you will find an expression of interest form. The ideas we are considering are:-

  1. Membership fees of £10 a month – list of potential benefits further into this article
  2. Incorporation and offering shares to members
  3. Regional Property118 committees and regular meetings

The growth of Property118 has been tremendous over the last five years as can be seen from the statistics below. This year we are projecting in excess of 5 million page views.

Property118 Growth – 1st Jan 2011 to 31st Dec 2015

Property118 stats Jan 2001 to Dec 2015

Property118 Stats – 1st Jan 2016 to 10th April 2016

Property118 Stats - first 15 weeeks of 2016

Whilst there is no guarantee that we will convert Property118 into a Landlords Association it is something we are seriously considering. A decision on whether to progress will be made based on the responses to this article. Here are some of our thoughts to date ….

Property118 Landlords Association Member Benefits

  1. Fee free direct access to a barrister to discuss legal problems and solutions. Maximum free telephone consultation is 30 minutes. Service to be provided via Cotswold Barristers Limited.
  2. A guarantee to beat any ‘like-for-like’ landlords insurance quotation. For many members, this alone will more than cover the cost of membership.
  3. Questions submitted to Property118 by members will always be answered within 48 hours. All responses will either be via email, telephone or the publication of an article on our discussion forums to elicit opinions and responses from other members.

Points of difference

The existing Landlord Associations have a track record of being shy of litigation.

Property118 has a track record of raising funds and seeking justice through the Judicial System. Ombudsmen and lobbying have their place but rarely achieve much more than publicity for a particular cause. If we progress this ideas and Property118 Landlords Association is launched we may not always be successful in litigation but we will pick our battles wisely and ensure that in every case the minimum outcome will be far greater awareness of any issues affecting UK landlords which to choose to tackle.

What could membership fees be used for?

  • To support the infrastructure
  • To promote awareness Property118 Landlords Association
  • To facilitate the sharing of best practice amongst UK landlords, letting agents and tenants
  • To fund research and PR campaigns to improve public perception of UK landlords
  • To promote fund-raising campaigns to fight for justice for UK landlords, e.g. the legal battle with the Government over finance cost relief for individual landlords
  • To provide ongoing research into tax efficient structures for landlords and the promotion thereof
  • To launch and promote regional events – never to be sponsored and never to include a sales pitch!
  • To provide investors with a return on capital – target 35% of income generated

How It Could Be Achieved

Transparency is key. We are capitalists at heart which means that we believe that success has to be rewarded; for our members, for ourselves and for those who back us financially. We have discussed the possibility of implementing a similar structure to that of Shelter and becoming a registered charity but we do not feel this would be right in terms of our core objective for transparency.

Property118 already owns 26% of the shares in as well as having revenue sharing agreements with many of our website sponsors. If we were to create a Landlords Association we would do so whole heartedly. In other words, all of the existing business arrangements that Property118 has (which for the avoidance of doubt doesn’t include our private property portfolios) would be incorporated into the Landlords Association.

The founders of Property118 value the goodwill of the current business at £5 million. If we were to incorporate our existing business and transform it into a Landlords Association then we would want our members to own part of it and to be as financially committed to it’s success as we are. To achieve this shares could be sold. This initial share capital would be the foundations upon which Property118 Landlords Association is built and would also provide us with confidence that we are doing the right thing.

If we decide to go ahead our first objective would be to recruit 50,000 paying members within 5 years. This would produce circa £6 million a year of revenue, i.e. £10 per month per member X 50,000 members =£500,000 per month.

To enable members to own a stake we could initially offer 1% of shares via a crowdfunding platform for £50,000. The minimum investment could be just £10. Over-funding could then be considered, e.g. if there is enough interest to raise £500,000 then 10% of the shares could be made available and so on.  Whilst such a structure would decrease our personal shareholdings it would also provide funds to facilitate a more rapid growth in terms of membership recruitment.

To provide some assurance to both members and investors that we wouldn’t simply draw all profits from the business ourselves we would be prepared to commit to capping all directors emoluments to the projected 2016 earnings level of £225,000. That would be the maximum that all Directors collectively could take out of the business in terms of salary, bonuses etc. Any additional income for the Directors would then rank on par with that of the shareholders from dividends.

Property118 currently operates on a profit margin of circa 35%. Assuming this figure is maintained and assuming the membership target of 50,000 is achieved then shareholders earnings would be £2.1 million per annum. This equates to gross annual earnings per £10 share of £4.20.

Now some people may say that a 42% ROI based on an initial target of recruiting just 50,000 members from a pool of what is said to be around two million landlords just isn’t right and that the returns are too high. Well that’s capitalism folks. Once this target is achieved the value per share will not be £10 either!

Some will ask, what if Property118 doesn’t grow and what if Mark Alexander were to die, so I will address those points now. I post less than 2% of all comments and articles on Property118, the rest are posted by our members. On that basis, why should Property118 stop growing, are landlords likely to face no challenges in the future? Nobody is irreplaceable or has a monopoly on good ideas. Nothing that has been achieved by Property118 has been achieved by one person alone. It has been the vision and engagement of a growing community of landlords that has brought us to this point. The question for us all now is this; where should we take it from here?

Membership growth is projected to be achieved organically, as has been the case for page views to date. This is because existing members share their interactions with Property118 and their positive experiences with other landlords. Momentum is continuing to accelerate, as can be seen from the stats, and we have every reason to believe this will gain further pace once we have proper funding and infrastructure to campaign and appeal against other injustices against landlords and back our challenges with legal action as neccessary and commercially viable. Furthermore, a broad, growing and solid financial and membership base combined with increasing revenue streams will provide additional opportunities to fund increased PR and brand awareness campaigns. Given that there are believed to be around 2 million landlords in the UK we would like to think the initial objectives we are considering should be realistic. What do you think?

Existing monetisation projects will continue unchanged, save for the fact that all income and profits will accrue to the new company.

We would also apply for EIS relief on shares. This has significant tax benefits – details here >>>

Expression of Interest - Property118 Landlords Association

I am interested in the following ....
  • If you are interested in purchasing shares please indicate the £ value of the investment you might consider based on the information provided to date. This is neither an offer nor a commitment on either side.
    Please enter a number from 10 to 50000.
  • For example; Devon

Share This Article


Mark Alexander - Founder of Property118

9:21 AM, 5th May 2016, About 7 years ago

Reply to the comment left by "Landlord Lucan" at "05/05/2016 - 01:52":

Ha ha ha

I take it you're saying "I'm out"?

Seriously though, I own 30% of the business that owns Property118. Why would I, let alone all the other shareholders, even consider transferring the shares of all those businesses into a Landlords Association for next to nothing and then continue to run them without payment?

It's a rhetorical question, no need to answer.

Mark Alexander - Founder of Property118

9:40 AM, 5th May 2016, About 7 years ago

Reply to the comment left by "Landlord Lucan" at "05/05/2016 - 01:52":

PS I see this was your first and only comment under this account.

PPS don't under estimate landlords. West Bromwich Mortgage Company did that. More than £500,000 was raised to take them to task. I didn't get a penny of that money. Win or lose, that case has shown them in their true colours. I remain optimistic that justice will win at the end of the day. Property118 and it's members will also do everything possible to ensure that Chris Cooper and Steve Bolton achieve their goals too. we have every faith in them.

mark smith

11:40 AM, 5th May 2016, About 7 years ago

Reply to the comment left by "Mark Alexander" at "04/05/2016 - 23:15":

On 18th May 2016 Jamie Paterson of London Apartment Solutions will appear at Camberwell Green Magistrates' Court charged with frauds on landlords who engaged his company to manage the lettings of their properties across London. This is a private criminal prosecution, organised and funded via p118 and conducted by Cotswold Barristers, where victim landlords found each other on this forum and united themselves to take this action.

Sean Graveney

11:45 AM, 5th May 2016, About 7 years ago

I was just catching up on the West Brom case... did you not receive any money for loss of fee earning time as per this article...

Mark Alexander - Founder of Property118

11:53 AM, 5th May 2016, About 7 years ago

Reply to the comment left by "Sean Graveney" at "05/05/2016 - 11:45":

Nope, not a penny, but several members have promised to "see me alright" if/when we win.

I also paid into the fund just like everybody else and incurred several personal expenses which have not been recovered.

Sean Graveney

13:31 PM, 5th May 2016, About 7 years ago

Reply to the comment left by "Mark Alexander" at "05/05/2016 - 11:53":

Well that is very commendable as is the campaign.Thanks for the info. I hope they follow through with their promise.

Michael Jones

14:07 PM, 5th May 2016, About 7 years ago

The more 'arrows' we have in the property business the better !
While NLA and RLA continue to provide ' bread and butter ' support , there remains need for engagement in the problem solving on behalf of one or more landlords. Property118 has developed an ideal position to include this role as one of its specialist activities in its support to landlords. The rest is leverage ( e.g. property118 specialists speakers being invited to landlord meetings hosted by NLA / RLA around the country ) !

Michael Bond

17:42 PM, 5th May 2016, About 7 years ago

Lots more good stuff. I think "118 LLA" should try not to duplicate what NLA (and RLA) does although there will be some overlap. I think "118 LLA" might find a valuable role as a more aggressive opposite number to the older orgs, for example: NLA lobbies ministers and civil servant s in Whitehall while "118 LLA" campaigns and gets press and social media coverage and when able and willing fights court cases with plenty of publicity..

Mark Alexander - Founder of Property118

14:55 PM, 6th May 2016, About 7 years ago

Thank you for all of the interest shown to date and of course the comments posted. The majority have been very encouraging idneed and the vision for Property118 Landlords Association is now becoming a lot clearer as a result.

Further thoughts are ....

Perhaps there will be an opportunity to launch Property118 Landlords Association at the #TenantTax Summit?

Sadly I will be unable to attend the Summit personally but I am planning to make a video to be shown in a presentation which will be delivered on behalf of Property118 by Jamie Fraser.

I am hoping to record the video AFTER we've got the result from the West Brom Appeal case.

If we get the result we are expecting it will be incredibly inspiring and motivational for the Judicial Review Campaign and I would also use it as a springboard to launch Property118 Landlords Association, which I believe should have the sole purpose of protecting landlords legal rights.

The other Landlord Associations do a lot of other things well so there's no point whatsoever reinvesting the wheel or competing with them. In time, it would be nice to think they would support Property118 Landlords Association, especially when they realise that it would be complimentary to what they do and not direct competition. The likes of ARLA, NALS, RICS, UKALA and other agent representative bodies will hopefully see the benefits of working with us too, as could TDS and MyDeposits.

My developing thoughts and vision for Property118 Landlords Association is that it would be run by a committee, independently elected by its members. Such a committee would have two clear roles.

The first would be legal action which would have its own budget. An honorary Legal Counsel would be appointed, Mark Smith Barrister-At-Law and Head of Chambers at of Cotswold Barristers has agreed to take on this role "in-principle". His position would be to advise the committee on likely success of cases and associated commerciality, i,e. those which could be cost neutral, best chances of winning and best for the cause in terms of positive PR benefit and membership growth. and would be a benefit to members (already owned in the Property118 family) and we will also be looking into the cost of providing legal fees insurance cover for landlord risks on a "Before The Event Basis". For example, an insurance which would pay out to cover members legal fees if an agent has clearly been negligent and caused losses for a member or abuses his/her position in terms of client money. There would, of course, be restrictions placed on such a policy such as the agent having to belong to a recognised body etc. However, the Committee would also be able to take a view on using the legal action fund budget to take on cases for members which are not insured. A commercial view on such cases would be required, e.g. what are the PR benefits and will it attract further membership. This is just one example thought, others could be for cases such as the one we are fighting against West Brom. I doubt changes in legislation are every likely to be an insurable risk but if there are enough members the legal action fund will eventually grow large enough to tackle this too.

The second role of the committee would be to make decisions in terms of marketing to grow membership. Strength in numbers will be key to success of Property118 Landlords Association, hence the importance of this being driven by a committee as opposed to me. Again budgets would be set. More members = more funds for the legal action.

With sufficient numbers of members the fund-raising we've had assist with to fight clause 24 may never be required again.

As the budgets grow and more cases are won the more members will hopefully join.

Success in legal action will breed success in PR, membership growth, the clearing out of rogue operators and improved awareness of the good that the PRS does for the economy and society.

So far, investment indicated "in-principle" to the core idea in the article leading this discussion is now approaching £200,000. If this materialises it would give the committee a significant budget from day one. My thoughts in this regard is that one third would be committed to reserves and the balance to be shared equally as initial budget between the initial legal action fund and for marketing for membership growth.

Please feel free to critique and add further ideas. Your thoughts are vital at this formative stage.

Darlington Landlord

18:33 PM, 6th May 2016, About 7 years ago

Reply to the comment left by "Mark Alexander" at "06/05/2016 - 14:55":

Hi Mark

Whilst a campaigning property118 would be great, based on experience with my local Landlords Association who are very well informed and provide all the standard stuff plus a lot of local benefits having people balk at a £90 annual fee, I suspect your £120 annual fees and also having to belong to another association to get bread and butter services may unfortunately deter many from signing up.

Best of luck though.

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