Tag Archives: HMOs

A call to convert 66,000 student HMO’s back to family homes? Latest Articles, UK Property Forum for Buy to Let Landlords

I have been having a catch up on my on-line reading over this weekend and I have just come across an article which, in my opinion is very ill-informed. A call to convert 66,000 student HMO's back to family homes

Housing supply in many UK cities is being restricted by the conversion of family housing to student lets and local tenants are being prices out, according to new research. International real estate adviser Savills estimates that 66,000 properties or Houses of Multiple Occupation (HMO) now occupied by students could be freed up for conventional family housing through the delivery of more purpose built student accommodation”

The first thing that I would say is that only students want to live near students and the last place I would want to bring up my family is in an area that is highly populated by students.  I love my students tenants but they do not keep regular hours and often return late at night in a happy and noisy mood. There are other issues too but I won’t go into those, most of us who let to students will know what I mean.

For me, the most important point that has been missed is that the cost of converting a family home into a student HMO is colossal and this, coupled with the purchase prices in popular areas, means that landlords have invested a massive amount of money in their properties – will families really want to pay the prices that would cover this investment and also convert the property back to a family home?

In my book “Will You Survive the Mayhem”, I talk about the future of the student market where student numbers are reducing in many areas and there is an oversupply. I have given my predictions of the future of the market and I have warned landlords that we may need a plan “B”.  Plan “B” must, however, take into account that many landlords have big debts on their properties and could not afford to use them for family lets because of the reduced income. There are other markets for which these properties could be used which are realistic and would help to increase supply but Savills are dreaming if they really think that building more purpose built student accommodation is the answer to the shortage of family homes.  They have also overlooked the fact that students can’t wait to get out of “institutional” accommodation and share little houses, at least for their middle year, and there are many empty rooms in purpose build student accommodation in areas where the student population has receded since the increase in University fees.

The article goes on to say

The result is a double whammy for local non student tenants and aspiring home owners. Not only do students price other tenants out of many family housing areas in major UK towns and cities, credit conditions post downturn have favoured landlord investors rather than less equity rich potential owner occupier buyers. ‘Local council coffers would also gain. We calculate that reinstating these student HMOs to homes for non student residents would boost council tax returns by around £1.5 million per town or city, since student only houses are council tax exempt,’ said Savills research analyst, Neal Hudson.”

All local authorities get increased Government funding to cover the cost of Council Tax exemptions for students, the local authority would not be better off if these properties were converted back to family homes, they would in fact be worse off because they would lose the additional “automatic” income and would have to recover it from the families who live there.

The one statement I do agree with in this article is this

“Article 4 of the Town and Country Planning Act proposes restricting new HMO supply which could push students and associated landlord demand into smaller properties, pricing out other occupier and tenant groups.”

I also talked about this in my book because Article 4 Directions are ill-conceived and, in my opinion, will soon sigh and die.

Finally the article says

“For the institutional investor in student housing the UK market offers a mature, counter cyclical investment opportunity”.

Wrong again, I have given a lot of evidence in my book that shows how the student market will continue to recede in all but the Red Brick university areas, many of those are already building campi in the most popular sending countries, and many investors will catch a cold by investing in purpose built student blocks in the next few years.

I am struggling to understand why investors are not being encouraged to put their cash into funds to build more family homes, since we all agree that this is an area of increasing demand and it is very unlikely that the demand will do anything other than grow year on year?

Am I missing something, do Savills know something that I don’t know?

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My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

HMO Landlady’s casting couch story Buy to Let News, Guest Articles, Guest Columns, HMO's & Student Lets, Landlord News, Latest Articles, Property News

If you’ve been reading my blog posts or run an HMO yourself, you’ll already know that the quest for affordable rooms is on the up.  This is partly due to the changes this year in LHA for people aged 25-35 whereby councils will only pay for a room in a shared house and, over 35 years old they can claim for a one bed flat (if they’re lucky enough to find one at the LHA rate!).  The increase in demand is also, in my opinion, due to tenants electing to have a life rather than work themselves to death to afford self contained accommodation and all that comes with it – Council Tax, utility bills, telephone, insurance, etc. Continue reading HMO Landlady’s casting couch story

Student landlords face planning postcode lottery Buy to Let News, HMO's & Student Lets, Landlord News, Latest Articles, Property Market News, Property News

Inconsistent planning policies for student landlords are making some cities no-go zones for property investors.

The problems arise from ‘article 4 directions’ for small shared rental properties – where three to five tenants share a house. Continue reading Student landlords face planning postcode lottery

HMO landlord fined £5,500 for letting filthy home Buy to Let News, Cautionary Tales, Landlord News, Latest Articles, Property Maintenance, Property News

The landlord of a filthy and overcrowded shared house was fined £5,500 after admitting 23 licensing and management offences to magistrates.

Jan Assakzai 42, of Friars Road, East Ham, London, picked up the fine at Thames Magistrates Court and was also ordered to pay £300 legal costs and a £15 victim surcharge. Continue reading HMO landlord fined £5,500 for letting filthy home

Corporates sink millions into student letting Buy to Let News, HMO's & Student Lets, Latest Articles, Lettings & Management, Property Investment News, Property Market News

Corporate investment in student letting was up 50% to £1.15 billion last year as rents and yields continue to go through the roof.

The flood of institutional money into student accommodation has continued in the first three months of 2012 with nearly £250 million invested, according to property consultants CBRE. Continue reading Corporates sink millions into student letting

Phone-y war – It hasn’t always been like this… Guest Columns

This article ponders on how tenant/landlord communication has changed over the years. It was sparked by a conversation with my daughter’s father over her seemingly rude texts last weekend.

Her: “Don’t forget my £5 next weekend”
Him: “Please don’t be so rude, I have your money and simply forgot to hand it to you on Sunday. Love you. X”
Her: “Sorry”
Him: “That’s OK, I wouldn’t have forgotten or spent it. Have a lovely week at school. Still love you. Dx”

I then received a call from her father asking why her texts were so abrupt and upset him by laughing “Well, you got more words out of her than me! When she responds to my texts it tends to be “Yea, No, Whatever, K (for OK)”” so he backed down and realised that teenage communication is very different from 30 years ago. Continue reading Phone-y war – It hasn’t always been like this…

Landlord fined £1,000 after HMO licensing mix-up Buy to Let News, Cautionary Tales, HMO's & Student Lets, Latest Articles

A landlord who told a court he misunderstood shared house rules was fined £1,000 for failing to licence his property and fit fire safety equipment.

Anton McLoughlin, 47, thought he did not need a house in multiple occupation licence because although six tenants lived there, he had divided the property into three separate flats. Continue reading Landlord fined £1,000 after HMO licensing mix-up

Article 4 Directions – Different Perspective Guest Columns, HMO's & Student Lets

On the 12th January, Councillor Jeremy Moulton set out the Southampton perspective in relation to Article 4 Directions taking away permitted development rights to change the use of single dwellings to small HMOs such as shared houses. The Residential Landlords Association, of which I am the Policy Director, has campaigned vigorously against the use of Article 4 Directions in this way and has called for a return to the old definition of a Class C3 dwelling which includes shared houses such as those occupied by groups of students, young professionals etc. Over 30 authorities have now made such directions, including Southampton City Council. Where these directions are in force a property owner has to apply for planning permission because they can no longer rely on permitted development rights. Often this will be refused. In our view 19 of these directions, including that made by Southampton, are far too wide and contravene Department for Communities and Local Government (CLG) Guidelines. Continue reading Article 4 Directions – Different Perspective

Landlords blamed for buying up family homes Buy to Let News, HMO's & Student Lets, Latest Articles, Property Market News

Councillors are blaming student landlords for a shortage of affordable homes for families that is ‘distorting’ the housing market.

Now, councillors in Chichester, Sussex, are considering planning controls to stop landlords opening new houses in multiple occupation shared by students.

An internal council report claims student landlords cater for around 40% of the local university’s first-year students, when most universities offer beds to all their first year intake. Continue reading Landlords blamed for buying up family homes

Landlord may face jail over HMO arson killings Buy to Let News, Cautionary Tales, HMO's & Student Lets, Latest Articles

The landlord of a shared house where a mum and her three-year-old daughter died in an arson attack may face jail for ignoring fire safety laws.

They died when a spurned girlfriend set light to her former boyfriend’s room in an unlicensed house in multiple occupation (HMO) in Milton Keynes last year. Continue reading Landlord may face jail over HMO arson killings

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