house in multiple occupation Archives

Marketing May 12, 2018 No Comments

Planning application for student flats at former Debenhams building withdrawn

A planning application to build student flats at the Castle Hill Arcade in Bangor (the former Debenhams building) has been withdrawn by developers.

Bangor City Council had objected to the development on the grounds that it would be an over-development and that additional student accommodation in the area is unnecessary.

Previous plans to build 65 student flats at the site were rejected by Gwynedd Council after concerns about the amount of student housing in Bangor.

The new plans would have retained the ground floor of the building as retail units with the 49-bed student accommodation to the upper floors and an extension at the rear of the building.

The developer, John Sutton from Manchester, had said the project would help free up housing for local families and boost the city centre economy.

The planning statement said: “It is considered that by providing purpose built student accommodation, the housing stock which has been converted into Houses of Multiple Occupation (HMO) and occupied by students can be returned back to their original purpose and be utilised as singular residential dwellings on the open market.

“This will contribute towards meeting the overall general housing need in Bangor, upgrade the quality of accommodation for students and agglomerate student accommodation reducing the sporadic pattern of units which occurs at present. This can ensure that the facilities students require can be provided in close proximity to their living quarters as they rarely rely on the private car.”

EXISTING STUDENT ACCOMMODATION

The planning statement also assessed the amount of existing student accommodation in Bangor, estimating that Bangor University has approximately 3,650 bed spaces available in Bangor at the official halls situated at Ffriddoedd Village, St Mary’s Village and Neuadd Garth.

The private sector currently supplies approximately 800 student bed spaces at site like Ty Glyn, the former British Hotel and former Plaza Cinema.

656 houses in Bangor (9.9% of housing stock) are registered with the Housing Department as HMO (housing definition).

809 houses in Bangor (12.3% of housing stock) do not pay Council Tax (not all can be confirmed as students – but students are exempt from Council Tax).

453 houses in Bangor (6.8% of housing stock) are both in multiple occupation and do not pay Council Tax.

The total housing stock of Bangor is 6,597. Therefore a high percentage of the housing stock is taken up by HMO/housing not paying Council Tax.

Source: The Bangor Aye

Marketing May 11, 2018 No Comments

Government urged to hold parliamentary debate on minimum room sizes

Letting agent groups are warning that the private rental sector is set to lose vital stock as the Government presses ahead with plans for minimum room sizes for Houses in Multiple Occupation.

The National Approved Lettings Scheme (NALS) and ARLA Propertymark have both said they understand the changes but have questioned whether they should go ahead.

HMO landlord Dhugal Clark has launched a petition calling for a parliamentary debate on minimum bedroom sizes that are set to be introduced in October through the the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018.

He warns that the changes – which sets a minimum bedroom size requirement at 6.51 square metres for a person aged ten years or over – will reduce the number of rooms available for tenants and mean those living in bigger properties will end up paying more council tax as well as higher rents.

David Cox, chief executive of ARLA Propertymark, said the proposals had been consulted on since 2016 and warned it was too late for a parliamentary debate but said the trade body has written to the previous housing ministers to question these changes.

He told EYE: “We have made verbal and written representations with the Government.

“We understand where the Government is coming from. They want everybody to live in good quality accommodation but a lot of older properties have boxrooms.

“There are always people willing to have a smaller room to save money on rent, this is going to take away those rooms and means the costs are shared by fewer people.

“People happy to live in a box room have to pay increased rent to live in a bigger room.

“Why does the Government feel it knows better than an individual making an informed decision based on the size of a room?”

Isobel Thomson, chief executive of NALS, added: “NALS would like to see more parliamentary debate over minimum room sizes in HMOs.

“While we understand Government’s aim is to improve some specific types of HMO accommodation in the sector, it’s important that common sense prevails. As it stands, the proposed changes will remove councils’ discretion to assess a property on its own merits, as they can now.

“This means we’ll lose much-needed accommodation from the PRS in what are otherwise decent and safe properties.”

Source: Property Industry Eye

Marketing May 7, 2018 No Comments

HMO and multi-unit landlords have highest rental yields

Landlords with houses in multiple occupation (HMO) and multi-unit freehold blocks (MUFB) in their portfolio are reaping the highest rental yields, according to research by Precise Mortgages.

Yields on houses in multiple occupation were typically 7.1% in the first three months of 2018, 1.3% higher than the market average, the study carried out by BDRC Continental showed.

Multi-unit blocks were found to yield 6%, compared to 5.8% across all property types, over the same time period.

However, average yields dipped slightly in Q1 2018 to 5.8% from 5.9% in the last quarter of 2017 and are now at the same level as Q1 2017.

Smallest landlord portfolios have lowest yield

The highest average yields of 6.7% were achieved on portfolios of between 11 and 19 properties, underlining the continued rise of the professional landlord.

By contrast those with just one property achieved yields of 4.8%.

On a regional basis, landlords with portfolios in the North West reported the highest rental yields at 6.7% while central London portfolios produced the lowest average yields at 4.8%.

Precise Mortgages managing director Alan Cleary noted that experienced landlords were looking to rebalance their portfolios given changes in the market.

“As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets and rental income is more secure even if one tenant leaves a void,” he said.

Source: Mortgage Solutions UK

Marketing May 3, 2018 No Comments

Make the most of HMO regulation changes

Regulatory changes have been a consistent characteristic of the buy-to-let market in recent years and 2018 is proving to be no different.

At the beginning of April, new minimum energy efficiency standards were introduced for privately rented property and the government is extending the scope of licensing for HMOs this October.

At present, a mandatory licence is required for properties with three or more storeys that are occupied by five or more people from two or more households. From 1st October, a licence will be needed for HMOs occupied by five or more people from two or more households, regardless of the number of storeys. The Residential Landlords Association claims this change means that an additional 177,000 HMOs will become subject to mandatory licencing, and there is no limit to the potential fine for renting out a qualifying HMO without a licence.

Licences are issued by the local council and valid for a maximum of five years. Landlords of licensed HMOs must make sure the house is suitable for the number of occupants and that the manager of the property – which could be the owner or an agent – is considered to be ‘fit and proper’. This excludes people with a criminal record or a previous breach of landlord laws or code of practice.

Owners must also send the council an updated gas safety certificate every year, install and maintain smoke alarms and provide safety certificates for all electrical appliances when requested, as well as any other conditions imposed by the local council.

In addition to these requirements, the government has also proposed a minimum room size for bedrooms in licensed HMOs. At the moment, some local authorities prescribe minimum room sizes, while others set out advisory standards, and this new approach will dispel confusion with a standard approach to all licensed HMOs.

Landlords must ensure the following:

• single bedroom to be used by one person over 10 years should not be less than 6.51m2
• double bedroom to be used by two people over 10 years should not be less than 10.22m2
• single bedroom to be used by one person under 10 years should not be less than 4.64m2.

Where there is a breach to these minimum bedroom sizes, local authorities may grant a period to rectify the situation, although this will not exceed 18 months.

So, there is plenty to think about for owners of HMOs in the coming months, and this provides you with a great opportunity to revisit your database of HMO clients to make them aware of the upcoming changes and their responsibilities.

Some may need to fund renovations to ensure they meet minimum standards and room dimensions and, even if no renovations are needed, this change in regulation provides you with a chance to make contact and discuss their other funding requirements.

Marketing April 30, 2018 No Comments

Massive extension to HMO licensing comes into force

CHANGES to Government rules mean a huge expansion in the number of HMOs requiring licences. Until this month an HMO (house in multiple occupation) only required a licence if it had three storeys and was occupied by five or more people, in two or more separate households while sharing kitchens/bathrooms.

The new regulations remove the three storey requirement, and Bournemouth council estimates it will have to license an additional 2,500 properties out of an estimated 3,000 previously unlicensable properties across the borough.

A report from the council’s private sector housing team to the communities scrutiny committee states that “2018/19 promises to be another exceptionally busy year”.

“The following key projects and service developments will be delivered,” the report says.

“The Extension to Mandatory HMO Licensing which could mean that the number of licensed HMOs will increase to approximately 2,500.

“The Housing and Planning Act has come into force which will bring further significant changes to our enforcement powers with Banning Orders for rogue landlords.”

Until April, council figures show there were 601 licensable HMOs across Bournemouth and Poole, of which 529 were in Bournemouth.

Bournemouth estimated there were 3,000 non-licensable HMOs in the borough, however in the past officers have often stated that it can be difficult to keep track of unlicensed properties.

Of these, 1,800 were believed to house students.

The new regulations bring in mandatory conditions relating to minimum sleeping room sizes, maximum number of occupants and provision of refuse facilities.

Licenses last for five years.

The private sector housing team, which among its duties is charged with ensuring landlords maintain their properties in good condition, dealt with some 2,600 service requests over the past financial year, according to its annual report.

There were 786 complaints relating to such issues as damp, lack of heating, lack of fire safety and overcrowding.

The team also lodged 11 prosecutions, and by the end of the year had three successes, through which some £2,300 was collected in fines and costs.

Also, the borough’s team has carried out an inspection of the nine mobile home parks in the area to ensure compliance with licence conditions. Together these parks house some 500 mostly elderly people.

One site, which is not identified, was prosecuted for non-compliance and the council collected £850 in fines and costs.

Source: Bournemouth Echo

Marketing April 17, 2018 No Comments

Spike in BTL landlords looking to invest in HMOs

New research from OneSavings Bank has found that, in the last six months, around 51% of UK based brokers have been approached by landlords looking to diversify their portfolios.

According to the data, of those brokers who had been approached by landlords about diversifying, 56% of enquiries were about diversifying into Houses with Multiple Occupants (HMOs). HMOs can generate a higher yield for landlords which will help to mitigate against the additional costs that they now face. Indeed, research by Mortgages for Business found that the average yield of a HMO could be 3.3% higher than a property with one tenancy agreement. However, changes to HMO regulations following a government consultation, due to be implemented from October, could introduce additional regulation in this area.

Landlords are also increasingly diversifying into commercial and semi-commercial properties in the wake of the recent PRA regulations and the changes to tax treatments for buy-to-let properties. The research found 14% of brokers said they had been approached by landlords wanting to increase the level of commercial property within their portfolio. In addition, 9% reported that landlords wanted to diversify into mixed-use properties. Unlike residential buy-to-let property, landlords holding only commercial property will not be affected by the reforms to mortgage tax relief. In addition, commercial or mixed-use properties will not incur the same amount of stamp duty as purely residential buy-to-let properties would.

In addition, 6% of brokers said landlords were looking to diversify into student accommodation. Brokers also pointed to other options, such as holiday lets and serviced accommodation, being brought up by clients.

Recent regulatory and tax changes are thought to be the driving force behind a growing number of landlords moving into new property markets. In particular, reforms by the Prudential Regulation Authority (PRA) introduced stricter underwriting standards for portfolio landlords with four or more properties, whilst reforms to mortgage tax relief have reduced the amount of mortgage interest landlords could offset against rental income. These are in addition to the 3% stamp duty surcharge for second homes that was introduced in 2016.

Adrian Moloney, Sales Director at OneSavings Bank, said: “Landlords are on the hunt for greater yields, and, in the face of regulatory and tax changes, diversifying into commercial property or more complex residential options such as HMOs can offer this. With the buy-to-let market becoming increasingly complex, there is an opportunity for informed brokers to support landlords seeking new niches. However, these brokers must in turn be supported by specialist lenders who can offer the flexible lending needed to finance the growth of these segments of the market.”

Source: Property Reporter

Marketing April 15, 2018 No Comments

Swindon Borough Council To Crackdown On HMOs

Swindon Borough Council is planning a crackdown on HMO investments, with new rules coming into force in October.

The change in regulation will require buy to let property investors to obtain a licence for all houses in multiple occupation (HMOs) which are home to five or more residents. This is likely to result in a five-fold increase in the number of HMOs that require a licence.

The changes have been welcomed by the local council, who have drawn attention to the fact that areas such as Broadgreen and Eastcott are home to many house-shares. Residents in these areas have expressed concerns about problems associated with shared housing, such as anti-social behaviour, fly-tipping and parking shortages.

In the current regulatory environment, HMO landlords only require a council licence for shared homes that are at least three storeys high and are let to five or more people who share a toilet, bathroom or kitchen. The new rules, set to come into force on October 1, will get rid of the height requirement, meaning that many more HMOs will need to be licensed.

There are currently 120 licensed HMOs in Swindon. However, council officers estimate that between 600 and 800 could end up being licensed under the new rules.

Borough housing chief Mike Ash said: ‘Due to the nature of Swindon’s housing stock and market, the great majority of HMOs in Swindon will fall under a licensing scheme following these changes, and this will allow for much more effective regulation of the sector.’

A spokesman for Swindon Borough Council added: ‘When the extension becomes law, the council will look to prosecute any landlords that wilfully fail to apply for a licence. Persistent offenders may also be banned from involvement in renting property, and also entered onto the national Rogue Landlords Database, which is currently being set up by the government.’

Source: Residential Landlord

Marketing April 12, 2018 No Comments

HMO plans for “eyesore” office space in Wrexham

“Dilapidated” and “eyesore” office space in Wrexham could soon be converted into a HMO.

In an application submitted to Wrexham Council it has been proposed that the disused office space at Unit C on Maesgwyn Road is converted into a six bedroomed House Multiple Occupancy.

Previously the offices were home to the Wrexham tram depot before being used as a bus depot. In recent years it has been used as a garage and repair shop. However they have since been vacant for a number of years and have been subject to vandalism.

As a result the applicants state that the aim of the plans is to “ensure this vacant unit can become usable”, with office space located at the front of the building proposed for HMO use.

Documents submitted to Wrexham Council show that the office space on the ground floor would be used for an open plan kitchen, dining and living area, along with a separate kitchenette, bathroom and one bedroom with living area.

A further five bedrooms, two of which would have living areas, two bathrooms and a landing would be located on the first floor.

Further details in the application’s design and access statement adds that the proposed conversion would be “sympathetic to the existing structure”, with the removal / replacement of windows and the creation of a new opening proposed to provide bin storage for the exterior of the building.

The design and access statement concludes: “We feel this planning application should be looked favourably upon as the intention to provide additional accommodation within the town centre ideally suited to young professional’s seeking work or employment in the area.

“The building is prominent to existing dwellings and is currently in a dilapidated state where vandals have targeted windows and walls within the building.

“At present the building is an eyesore to local residents, by allowing this conversion to take place the building will be revamped and be a secure building ensuring vandalism won’t occur.

“By allowing us to convert the existing offices to provide a HMO we are retaining the existing characteristics of the building, reducing its impact on the current parking arrangements and ensuring parking issues aren’t magnified should the unit be refurbished as an office.”

The application will be considered for approval at a later date.

Source: Wrexham

Marketing April 1, 2018 No Comments

What do the new HMO regulations mean for landlords?

Last year the UK government announced plans to review regulations surrounding Houses in Multiple Occupation (HMO) although this was delayed by the snap general election. However, on 23 February 2018 the government announced details of changes to HMO regulations which will come into effect on 1 October 2018. While many of the changes are subtle they will force many landlords to apply for HMO licences and potentially fund changes to their properties.

SUMMARY OF HMO REGULATORY CHANGES

As of 1 October 2018 the following changes to HMO regulations will apply:

Definition of an HMO property

At this moment in time an HMO property is defined as one which is occupied by five or more people, forming two or more separate households and comprises of three or more stories. The new definition is much simpler and any property occupied by five or more people forming two or more separate households will require an HMO licence.

Floor space requirements

While the vast majority of HMO landlords offer floor space which is more than adequate for single rooms and those sharing, there have been many cases of bad practice highlighted in the press. As a consequence, the new guidelines will recommend floor space of no less than 6.51 m² for a single tenant and 10.22 m² for two adults sharing. At this moment in time it is unclear when this guidance will become law.

Properties previously exempt from an HMO licence

There are many HMO properties in the UK which do not currently require a licence under the old HMO definition. Those that fall under the criteria for the new HMO definition from 1 October 2018 will need to apply for a licence from their local authority. It is also worth remembering that a licence is required for each individual property as opposed to individual landlords.

Impact on landlords

Until the new regulations are brought onto the statute books nothing is actually set in stone but the indications are that around 170,000 additional properties will be impacted by the new HMO regulations. This is on top of the existing 60,000 properties already under licence. Those who fail to comply with the new regulations will be open to potentially unlimited fines.

Additional funding requirements

There is some debate at this moment in time as to whether the minimum room requirements will be guidance or firm regulations when the changes come in on 1 October 2018. It is likely that many landlords will at some point need to make changes to the layout of their HMO properties. Depending upon the type of property this could have a serious impact upon long-term rental income as well as requiring additional capital to fund changes.

PLANNING FOR THE FUTURE

At this moment in time the HMO changes will only relate to England although it is highly likely that Scotland, Wales and Northern Ireland will adopt their own form of regulatory changes in due course. We know for a fact that the definition of HMOs which require a licence will change and at some point the minimum room size guidance will become law. There is still plenty of time for HMO landlords to review their own individual investments and consider how the changes will impact their assets and their income.

Source: Property Forum

Marketing March 27, 2018 No Comments

Rogue landlord prosecuted for the second time in six months for HMO offences

An Oxford landlord with a previous conviction for housing offences was fined £10,000 and ordered to pay the City Council £1,535 in costs when he appeared at Oxford Magistrates’ Court on 20 March 2018.

The City Council successfully prosecuted Mr Imtiaz Gulzar for the second time in six months for failing to comply with his responsibilities under the Management of Houses in Multiple Occupation (HMO) (England) Regulations 2006 at a large HMO on Cowley Road, Oxford.

Mr Gulzar, (41) of Cowley Road, pleaded guilty to:

failure to keep his property in good order and repair;
failure to ensure that all notices indicating the location of means of escape from fire are displayed in positions within the HMO that enable them to be clearly visible to the occupiers;
failure to maintain property in good and clean decorative repair, and
failure to maintain property in a safe and working condition

After hearing the facts of the case and considering a written statement of mitigation, as well as a notice of intention to cite a previous conviction, the Court proceeded to fine Mr Gulzar £10,000 and ordered him to pay £1,535 towards the Council’s costs.

In November 2017, Mr Gulzar was prosecuted for failing to comply with the conditions attached to an HMO licence for a property in Iffley Road, Oxford. In that case, he was fined £2,500 and ordered to pay £1,425 in costs.

Councillor Alex Hollingsworth, Board Member for Planning and Regulatory Services, said: “The City Council is committed to ensuring high standards in the private rented sector and protecting tenants against landlords who do not meet their responsibilities under the law. I am pleased that in this second prosecution of Mr Gulzar, the Court imposed a higher fine than in the first case.

“This is one of the last cases to go through the courts as we are now using the new financial penalty powers that came into force in April last year. These powers allow us to issue financial penalties of up to £30,000 for certain housing offences rather than take up cases to the courts for prosecution. On average, we have issued penalties that are nearly four times what the courts used to fine landlords, so we believe the new powers will provide an even greater deterrent against violations of housing regulations by landlords.”

Source: Oxford City Council

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