Portsmouth based peer-to peer (P2P) lending platform, Lendy, which lends money to property developers has collapsed after intervention from the Financial Conduct Authority. Lendy was setup in 2013 and was one of the bigger P2P property lenders with around 22,000 investors tempted by advertised returns of up to 12% and assurances that they could hand over money with “complete peace of mind”.
This is a blow for the city – we create too few new jobs as it is, especially in the high growth areas where the UK has a lead such as FinTech, AI, etc. but unfortunately, it would appear this promising star was badly managed and has paid the price.
A thriving private rental market that provides choice for tenants hinges on landlords having confidence that they can regain possession of their property in a timely and efficient way. At present, only Section 21 repossessions provide that certainty. It should be kept unless and until a new system is in place that provides landlords with the same level of certainty. The other routes currently available for repossessing properties do not meet this test.
To welcome visitors? Or to huddle in our insular security? Portsmouth is very much an Island City both in geography and mentality. It is both what makes us special and hinders our progress. Whatever you view our place, it is a one-off location. This month I share some views from fans of our City, Pride in Pompey is strong and after 25 years here I am almost a local.
Having won our 1st appeal (over an adequately sized room that PCC believed to be too small) last month, this month the next 7 cases came to court. We hope the decision of the 2 judges will be available in the next few weeks and when it is, we will share it.
In the interim, some observations and recommendations for all concerned.
As we move into June, those of us with student tenants know that in the coming days and weeks, exams will finish, leaving drinks will be imbibed and then in the 4-5 hours before moving out, our tenants will attempt to clean the house and to clear their stuff out. Historically this has led to piles of bin bags for the dustmen to collect, often several days before they are due and much complaint to local councillors on the matter from local residents. (OK, most tenants are better than this - but it only takes a few...)
This year is going to be harder – firstly, we have new black bins, once they are full, that is it, nothing else will be collected. Secondly, local councillors are really keen to avoid the problem rather than hear about it on the doorsteps as they talk to their constituents. So, what can you do?
Hopefully members saw this article when the RLA published it this month, but if you did not, the RLA's biggest ever survey of more than 6,500 landlords revealed more than 46% plan to sell and another 40% are waiting to hear more details of planned changes before they make decisions on their ability to provide homes to rent. We know many of our members participated in this survey, and the results fit with our anecdotal experience - thank you for participating.
The net is closing on short term lets, are you in or out?
The RLA published an article this week regarding short term lets ‘There has been a massive growth in short term lettings and landlords are moving properties from long-term to short-term lets due to Government tax changes….Disincentivising residential stock …and promoting short term holiday lets does not increase the supply of homes.’ (Dr Tom Simcock).
Hardly rocket science but what does that mean for we landlords here in Portsmouth?
If you are a local landlord, we encourage you to attend some of the training courses we have scheduled this year – many of us became landlords as an investment but those of us who have been doing it for a while will have realised that you either outsource everything to an agent or you treat it as a profession and for that, you need training.
(And even if you outsource, you are still legally responsible for the actions of your agent – so if you are better educated, you can better judge whether the agent is doing what the law requires he/she do for you).
You may have seen the articles in The News this month summarising the dismay (and often unfounded and ill-advised ranting) of those on the Portsmouth Planning committee as HMO’s have been allowed on appeal after the Planning Committee went against the advice of planning officers employed by the council and rejected applications for HMO developments that met all of Portsmouth’s very stringent local rules….
The consultation on Portsmouth’s proposed Homelessness Strategy ended this week – there were some issues as the email address for responses does not exist, but hopefully all those who wished to participate found alternative contact details.
The PDPLA’s response is below.
In the first of the current string of appeals against PCC licensing decisions to come before a Tribunal, PDPLA member Lucy Fryer has won her appeal against PCC’s judgement on what constitutes a small room.
The legal requirement for a bedroom in an HMO is that it be at least 6.51 sq m. That is small, but subject to layout and furnishings it can be quite acceptable and it avoids wasting the small bedroom that was added to many Portsmouth houses when they were built in the 1920’s and 30’s. They are popular, as landlords tend to offer them much more cheaply than larger rooms and when living with a group of friends, having a small room and low rent, but still having access to the rest of the house is often seen as a very desirable solution.
The room in question was larger than required, it had a sloping ceiling, two Velux windows and ensuite facilities. The Council wanted the latter removed. The Tribunal decided this "would be a waste of time, effort and money which would not serve any statutory purpose.”
We have at least 7 more appeals coming up starting on the 8th May and will update on those in the next newsletter.
The tribunal made some interesting observations, read on for a summary of their key points.
The PDPLA has input to discussions by the APPG (All Party Parliamentary Group) who have been looking at the impact that poor housing has on health. We have long argued that HHSRS is not fit for purpose - allowing council officers across the country to 'appear to be doing something useful' whilst in reality, having little impact on health or safety.
We are hopeful that this APPG will come up with something better. Read on for an interesting graphic of their findings so far including details of the £2.5Bn cost to the NHS of poor housing and the £18Bn social and economic cost.
The answer is obviously, no - tax is periphery and everyone pays it, so while you should take care to only pay what is due and not overpay, happy tenants, safe houses and stable finances are more important.
If only it were that easy though. Britain's 'tax code' which defines which taxes are due, runs to 17,000 pages - the longest in the world (the average bible is 1,200 pages, Lord of The Rings (all 3 books) is about the same). So in a way, it is not surprising the average landlord seems to spend far too much of their time trying to work out how much tax they need to pay. It also explains why there are 200,000 working accountants in this country - just think of all the useful things 200,000 people could do if they were not wasting their working lives worrying about other peoples taxes...
There follows a summary of current tax changes from the Federation of Small Businesses, a link to one of HMRC's webinars (which are well worth attending as the 'onscreen chat' gets you answers to specific questions far quicker than their telephone helpline) and a reminder of our forthcoming PDPLA tax education sessions running through May and June - do make sure you book your place.
The government have been swayed by pressure from Shelter and others and have decided to stop landlords regaining possession of their property using Section 21 notices. What will replace it is unclear and there will be consultations before anything is finalised, but you can rest assured that the PDPLA will be articulating the impact upon its members of any of the proposed alternatives.
We received extensive coverage in The News when our Vice-Chair, Alwin Oliver focussed on the fact that currently, many mortgage lenders depend on the availability of the Section 21 when offering finance and one unexpected outcome could be that mortgage cover requirements could rise considerably, making funding much harder to acquire.
Have you ever used a Section 21 to get your property back? If you have, we'd like to know why as if the 'Shelter perspective' is inaccurate, we need to be able to show evidence of that. Read on for member comments and our press release explaining more of our concerns
We know many of our members do not trust banks or financial institutions and attempt to fund their pensions by buying and letting property. This may make sense, but with increasing regulation and also, the high cost of maintaining property to a good standard and the significant overhead of either managing your tenants or paying someone else to do so, sometimes we wonder whether it is worth it.
To present a contrarian view, we publish an article originally published in the Financial Times by columnist and Money Week editor, Merryn Somerset Webb.