Wanted - Slow and Expensive Tradesman

As landlords we are all equally guilty – how cheaply can you fit a kitchen? Can you get the bathroom done next Monday/Tuesday? We never say, could you take a little longer and do it better or, OK that sounds good but what if I paid a bit more? So it is our fault that very few trades people have the time to take pride in the quality of their work or go the extra mile to do a better job. But does it matter as long as it is good enough you ask? Well, yes it does,you could save money if you ask for a better job. Let me give you some examples….

Decorating

You can have cheap paint applied quickly and repeat the operation in 18-24 months. The cheapest paints tend to have a higher water content – great for a mist coat on fresh plaster but terrible for a high opacity, long term finish achieved with fewer overall coats.

From one of the Facebook landlord pages this month: "Hi, I have recently painted throughout with CovaPlus Blue Zephyr paint. After a few weeks the walls in communal hallways are ruined as the paint marks badly just by touching with clothes or hands. Gets worse if you try to wash😡"

Or you can pay for proper preparation and decent paint and find not only does it last 5-7 years but also, you can wash it down between tenants and make it look as good as new.

Do the math – paying £20 for paint or deciding to pay £40 and get the good stuff. Difference £20. Paying a painter for a days work to paint the room now, £150. Avoiding having to do the same again in 18 months as you paid £20 more for paint – net saving £130. The numbers will vary from job to job, but you get the idea.

Too simplistic an example, then let's look at kitchens. 

Kitchen Fitting

It never ceases to amaze that the old kitchen disappears in just a few hours however sturdy it may have seemed and after a day of 1st fix electrics, plastering, etc the kitchen fitters work their magic and the new kitchen is completed in 2-3 days. How do they do it so quickly?

Well, typically, the speed is honed over a long series of kitchens picking up short cuts on each and applying them all to subsequent kitchens – you could say this is great news, if I can pay 2 guys for 3 days labour to get a kitchen, why would I want to pay them for a week each instead?

Well for a start, labour tends to be one of the lowest costs when you refit a kitchen – units, appliances, electrics, worktops are all likely to cost more than labour so doesn't it make sense to pay a little more and get a better kitchen?

Next time you have a kitchen installed – have a look at the fittings, fixings and panels which are left over. The kitchen manufacturers don't throw in lots of extras just in case – the designer comes up with a design which you agree with and then the factory provide all of the components needed to build that specific kitchen – so how come you have so many bits left?

Here are some questions to ask:

• When you have a rodent problem in 3 years time and you pop off the plinths to check under the cupboards, why didn't you ask the fitters to seal all of the holes they made in the wall (waste pipes etc), the floor (electrics) or the skirting
• When you have an infestation in the kitchen and check under the cupboards,why all the sweepings of sawdust, wood off-cuts, bits of electrical wire, builders rubble. There is no need for any of this and it ought to be clean even if it is unseen
• Kitchens come with instructions. Each range from each supplier is different. Integrated appliances have their own instructions too. Yet rarely will a fitter read any of them, let alone follow them. So you have to ask that they do, and you need to as well – and in advance, you have to make sure it is understood that is what will happen and you expect everything to be installed in accordance with the detailed instructions and that needs to be included in the price.  And you need to check – there should be no fittings or fixings left over and with integrated appliances, watch the install videos most manufacturers produce and make sure that is the process that the fitter uses.  Yes it can usually be done quicker, but will it be done as well as the manufacturer designed it to be?  And will it still be working in 5 years' time as a result?

 

• That nice tall tap on the sink. It looks lovely but have you seen how it wobbles and how the sink flexes? You know that before too long you will be replacing some element of that setup due to the broken seal around the sink or some other issue. Why didn't you check the fitters had fitted a kitchen tap support bracket or brace ? (See picture right)  At a cost of less than a tenner you would have avoided all of this – but no 'normal' fitter is going to spend 40 minutes fitting a tap with a brace if he can do it in 10 without – so you have to find the ones that spend more time or ask them to do so

 

• When the sink started leaking the tenant either never noticed or couldn't be bothered to tell you and unfortunately the 1st you know is when the tenant leaves and you realise the sink unit is on the verge of collapse. Why is that? Well – kitchen units come in various grades, from thin/cheap covered chipboard to thick/waterproof MDF but they all tend to be built structurally strong and designed to last. However, much of that structural integrity comes from its fixings. The legs go on in a specific way so that the weight of the sides is supported by the legs, not just the base – many fitters just fit them without regard to their orientation. Not really a time saving but can make a big difference.  Also, if the sides of the unit are tight to the wall and securely fixed to the wall – this provides rigidity and maintains the strength. However, kitchen walls are rarely straight – so to ensure that each unit is in line with the rest, yet also tight to the wall requires that the back be 'scribed' (a process of marking the precise contour of the wall onto the back of the cupboard and then cutting the back of the sides of the unit such that they follow this contour and fit tightly to the wall). Scribing takes time and with units on each side all screwed together, the extra strength is rarely needed (until you get that inevitable leak) so the quick solution is to cut off 95% of the back of the sides of the units, leaving just the bit that touches and is screwed to the wall – this allows fitters to get each unit installed in around 20 minutes as opposed to 40-60 if they scribed it. Again, go back to how much more the labour would cost to have it done properly such that even with an ignored leaky sink, the structural integrity of the units is such that damage is slight…

Bathroom Fitting

Bathrooms are another great example. Most of us have realised that having to replace mastic between baths and tiles (or panels) every 2-3years is a chore and having a bathroom tiled is not only expensively, but it also adds re-grouting costs to the 'replacing mastic' cost just mentioned. That is why so many of us opt for wall panels these days – a whole wall in 2-3 panels, no visible joins, no grouting, cheaper than buying and fitting tiles – it is a no brainer.

But firstly, not all panels are the same. Some are totally waterproof and others are faced plywood, plasterboard or MDF, none of which fare well if they get wet.  So there is a cost debate here as to how much to spend on boards – when looking at spending £100 or £200, do compare that potential £100 saving with the knowledge that with one you probably have a solution that will last 15 years and with the other, maybe only 4 or 5.

The next thing to consider with panels is how they join. Leave it to the bathroom fitter in a hurry and he will butt boards together and leave them 1-2mm above the bath and run a bead of mastic around the top of the bath. Not only does this give you the exact problem you were hoping to avoid, of having to replace the mastic every 2-3 years but it may actually be less than that if there is any ingress between the boards.

I have known fitters avoid the more expensive boards which interlock where they join as it was 'too hard' compared to butting cheaper boards together with a bit of mastic. Their time-saving (and money saving) preference is really a false economy if you want something that will not leak in 3-4 years and will not need re-grouting or mastic replacement.

Take a look at the video on the right – this is the instruction video for the trim that goes between the boards and the top of the bath of one of the more expensive boards. Having watched it, ask yourself the following questions: if anyone follows those instructions, how could it ever leak? With that amount of mastic sealing every element of the join, how did they manage to do it in a way that means I will never get visible mouldy mastic or need to replace it? Is there a bathroom fitter anywhere who would do all of that when he could save a couple of hours with just a bead of mastic? So the answer is clear – you have to specify what you want and make sure the cost of it is covered in the quotation given.

If a fitter knows he will normally do a bathroom like yours in 4 days but because you asked for various additional elements, he has priced the 6 days he thinks it will now take, he will happily take the time and do it the way it was designed to be done and you will be better off as a result. And if it means your bathroom last 8-10 years instead of 4-5, it is not just the cost of buying and installing a bathroom that it saves you but also the lost rent while it is being replaced and the reduced rent when it looks tatty...

Electrics

 

You may think that an electrician who is any good is one who knows the current regulations and gives you a neat, tidy installation that meets those rules when you need it for a fair price.Largely, you will be correct but there is more to a good electrician than that.

Look at the socket on the right.I asked the electrician to install it in one of my conservatories – surface mounted was fine as not worth the extra effort and mess of chased in cables and with painted brick walls, it would still be visible.

The 'average' good electrician would have run some trunking up from the floor into the bottom of the socket.In this case, the electrician ran the trunking up the door frame (much less visible - look carefully and you can see it) and then drilled through the brickwork to run the cable into the back of the socket. End result, a very neat and tidy installation with no obvious trunking and probably a safer installation as a result.Extra cost – probably none.

 

By comparison, look at the kitchen extractor on the left. A different electrician this time with much the same brief – can you install this extractor on that wall there, surface mounted cabling will be fine as with tenants in, I don't want the mess caused by chasing in cables, plasteringand redecorating.What did he do? A perfectly safe and acceptable installation which meets all electrical requirements, but it has plastic trunking running from the extractor up to near the ceiling, then parallel to the ceiling 2-3 foot into the corner, then another 2-3 foot over the doorway and then down 7 feet to the plug socket from which he took the electrical supply.Given my spec, what did he do wrong?

Well, in the bedroom above, there isa socket directly above the extractor. A quality installation would have involved pulling up 1 floorboard to tap into the electricity supply to the upstairs socket plus a couple of feet of trunking from the ceiling down to the extractor.Probably a cheaper solution – much less trunking to install, a quicker solution and a safer one too. 

Plumbing

Final example – a boiler is a boiler and it takes 2 days to install, whoever I use, so what difference does it make and why should I worry?

It is true it is even harder to tell an excellent plumber / gas fitterfrom a good one than it is to do the same with electricians. Let me give you one final example – this final photo shows two radiators, one fitted by a very good plumber and one by an excellent one.In both cases, an old radiator was replaced by a new one of the same size – but the fittings were different so the existing pipework had to be altered to fit the new radiator. The 'lounge rad' has been done with a single pipe on each side, symmetrically bent so that they balance and match and the only joint on either is below the flooring.

By comparison, the towel rad has multiple joints and no attempt to balance or match the 2 sides.

The more elegant lounge rad probably cost less (fewer expensive joints), was quicker (fewer joints to cut, clean and solder) and will last longer (fewer joints at risk from passing vacuum cleaners) – but what would your plumber do unless you asked him/her to take a little longer?

 

 

Conclusion / Recommendations

The common theme in all of these examples, is that most tradespeople like to think they do a good job but typically feel pressured to do it quickly and as a result, they rush in, get the job done and then get out and onto the next one. If you can make them slow down just a little, and give them time to think about HOW they might do it,you and they will be surprised by how clever and imaginative most trades people can be when encouraged.

Apart from the fact that this will save us money in the long run and leave us with better functioning and more elegant solutions, over time – as long as enough of us encourage it – it will start to become more normal.Just because new house builders think standards are unimportant, does not mean we should too.

Student Halls Avoid Even More Taxes

It has long been the bane of local student landlords that our taxes have increased annually every year since George Osborne 1st became chancellor in 2010, while at the same time, encouragements for student halls providers have reduced or removed their taxes in almost equal proportion, creating a very unfair playing field. It is now apparent that student halls providers have found a new ruse and many don't even pay Corporation Tax.

Student hall providers are not doing anything illegal – they are simply using the rules that have been put in place to encourage investment in property development to their advantage. This article puts this in context by explaining the underlying mechanics of our tax system and how it is used to drive behaviours, how this has worked against small landlords and in favour of big corporate ones, what a REIT is and how they are used and the article ends with a recommendation of what the government needs to do to focus REITs on what they were designed for and to raise more taxes from some of the areas where they currently operate but were not intended to do.

The Way Our Tax System Works 

The main reason for taxation is to raise funds to meet the government's spending commitments. In its simplest form, a country with 100 residents and a spending plan of £1,000 would tax everyone £10. This would be fine if everyone in the country earnt sufficient that they could afford £10 – but no country is that equal, so different taxes have been introduced in the past to try and ensure that sufficient funds are collected in a way that most people believe is fair (else they would not pay) and in a manner that does not disadvantage too greatly those who do pay. Taxes on income, sales (VAT), wealth, land value, death and other attributes have all been tried somewhere at some time.

Apologies for the simplistic definition of a tax system – but the other reason for taxation in the modern world is to encourage behaviours. When a government wants citizens to smoke less, it will typically embark on a strategy of ever-increasing taxation of cigarettes, with the aim of reaching a level where most people decide the benefit or joy obtained by smoking is insufficient to justify the cost. If the government does not do enough, they will not get the desired outcome and if they go too far, they will encourage the criminal element of the society to create a black market in that product (counterfeit (tax free) cigarettes in this example).

The other aspect of our tax system which is worth commenting upon is that frequently, when a government wants to raise new funds, it will look to increase or create a new tax in some niche where the number of people affected is quite small – in this way, especially if the niche in question is an unloved one, objections to the increase will be limited.

So, for example, the chancellor gets far less pain reducing allowable pension contributions (which only affects top earners) than raising the same amount by a small increase in income tax rates.

There are two downsides to this approach to taxation – firstly everything becomes very complex. The UK tax code (the set of documents which define tax rules) is 17,000 pages long. Hong Kong have a 276-page equivalent. The UK tax code is 12 times the size of the King James Bible and contains 10 million words. This is why UK accountancy bodies have over 350,000 members – that is more than 1/3 million intelligent people doing nothing more productive than helping people work out how much tax to pay… No wonder we have such low productivity in this country.

The other downside is that as a result of the complexity – every time a new rule is added, someone somewhere will scrutinise it and look for the loophole that lets them avoid the tax or the workaround that it allows – so more and more people spend more of their time looking at ways to legally reduce their taxes than they do focussing on increasing their revenues knowing that whatever they earn will be taxed equitably and fairly. So for example, many small landlords have moved to 'serviced accommodation' or 'holiday lets' as these are treated as a business rather than an investment and these are treated more equitably from a tax perspective – so the governments underlying assumption was that increased taxes on Buy To Let would reduce the number of rental properties but free up those properties for 1st time buyers and thus reduce the pressure in the housing market. However, the actual result is the net total of housing available has been reduced and rents and house prices have been forced up as properties leave the housing market and move into the 'holiday sector'. There is another example of this phenomenon of tax avoidance strategies leading to unexpected outcomes which is letting many student halls, known in the trade as Purpose Built Student Accommodation (PBSA's), completely avoid the main tax on businesses.

Increasing Tax Burden For Small Landlords

 An issue for small landlords is that the government has never found a way to differentiate between an investor and a business in this sector. So on the one hand, an investor would be someone who has some money and decides to invest it in a property which he or she then hands to a property manager or letting agent to rent and to manage and the landlord receives a 'net income' in return for his or her investment after the agent/manager has paid all associated expenses. This arrangement is not wildly different to having invested the money in stocks or shares or put it into a savings account and any income is taxed accordingly.

On the other hand, we have the professional landlord – they buy the house, pay all of the expenses associated with letting the house and spend their time managing the property, showing potential tenants around, collecting rents, resolving issues, arranging repairs, etc. If the business is big enough, it is worth 'incorporating' (setting up a limited company) which will then allow you to treat it as a business, pay yourself a salary, deduct all appropriate expenses, etc before calculating how much profit is made and thus how much tax is due. The issue is that the typical professional landlord does not have 50 properties – the average is 1.2 according to some measures and the cost and overhead of incorporating for a property portfolio of this size is just not justified.

Therefore, most landlords fall into the gap between hands-off investor and small business and for tax purposes, the government lumps them all together as investors. This was not ideal but was generally workable with some disadvantages until the then chancellor, George Osborne, decided to use the tax system to reduce the size of the Buy To Let sector. Since then, the burden has increased annually to the point where very few landlords can make a decent return on their investment. Finance charges (for example interest on mortgages) are now taxable – so a small landlord with a £100,000 property and an £80,000 mortgage will have made a £30,000 investment (£20K difference plus buying costs and fees). His mortgage will cost him £4,000/year and his rental income might be £5,000/year – so you would expect him to be taxed on the £1,000 profit. However, he is taxed on the full £5,000, so for a 40% tax payer he will owe £2,000 even though his profit on his £30,000 investment is only £1,000. Compound this with the changes to stamp duty which make it much more expensive for small landlords to buy and capital gains which means we lose much more of any gain when we sell, and it is not surprising so many landlords are leaving the sector and rents are increasing owing to the reduced supply.

For student landlords the situation is even worse as during the same period, what was once a property that was exempt from Council Tax is now being billed for every day that the local authority can argue it was unoccupied or occupied by someone who was not a student on that particular day.

Reducing Tax Burden For Student Halls

We have long complained that we are not treated fairly when compared to student halls (PBSA – Purpose Built Student Accommodation). Someone, somewhere obviously decided the country needed more student halls as planning rules were changed such that PBSA did not need to pay business rates and any developments were not subject to the Community Infrastructure Levy. Also, as they would be occupied by students, they would also be exempt from Council Tax.

Thus developers all over the country with city centre land to develop looked at the available options and quickly concluded that if a block on that site was going to cost £xM regardless of what it was used for, then the best way to make money was to opt for the solution which had no CIL charges, thus reducing the developers costs and no council taxes or business rates as that would make it more appealing to customers as costs of operation would be lower.

So we have far more PBSA units around the country than we need, we have a shortage of affordable housing and city centre office accommodation and hotels all driven by government encouragement (rightly or wrongly) through the tax and planning system which has led developers to choose to build PBSA at the expense of all other alternatives.

We have long argued that 100 students living in 25 small HMO's in the city is far preferable to the same number living in a PBSA because apart from the fact the students become part of the community, their costs are lower and thus their overall debt is reduced, their landlords live and work in the city and the rent thus goes into the local economy and is spent supporting local shops and tradespeople rather than being managed by some 'out of city' company and leaving the local economy completely.

But it is actually worse than that, due to a new tax avoidance ploy being adopted by many PBSA providers.

What is a REIT?

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Initially introduced in the US in 1960 and legalised in the UK in 2007, REITs pool the capital of numerous investors. A REIT allows investors to buy shares in commercial real estate portfolios—something that was previously available only to wealthy individuals and through large financial intermediaries.

Properties in a REIT portfolio may include apartment buildings, data centres, healthcare facilities, hotels, infrastructure—in the form of fibre cables, cell towers, and energy pipelines—office buildings, retail centres, self-storage, forestry and warehouses.

This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves and as REITs are publicly traded on the stock exchange, they are liquid assets that can be bought and sold without delay, unlike property which can take years to turn into cash.

This is another example of UK government encouraging investment in a certain area (commercial property) and using the tax system to optimise desired outcomes.

A Good REIT

Gunwharf Quays is a great example of a REIT at work. Land Securities is the largest commercial property development and investment company in the UK. It raises funds by selling shares to retail and institutional investors, pension funds and the like on the stock market and then uses that money to buy land and develop sites as it did at Gunwharf Quays.

The distinction between 'investment' and 'business' works in this example. Gunwharf is home to over 90 stores plus 30 restaurants and bars – each operated by a business which files its own accounts and pays Corporation Tax on any profits. To make this all possible and to allow the industry to find sufficient funds to invest in ventures such as this, the UK government allowed some companies to become REIT's and as a REIT, there are certain rules that need to be followed but one of the benefits is that as a financial vehicle designed to raise funds to help other businesses, a REIT is not liable to Corporation Tax. There is some logic to this – if all of Land Securities tenants at Gunwharf have paid Corporation Tax on their profits, asking the REIT that provides the premises for these companies also to pay Corporation Tax risks double taxation which would mean the model does not work as intended.

This is an argument that can be argued the other way – double taxation is fine in so far as every pound is taxed each time it changes hands, either in VAT or income tax, so double taxation is not necessarily a bad thing – but it is seen as a disincentive to investment in property if both the landlord and the tenant are paying corporation tax.

A Bad REIT

The problem is, there are companies which chose to become REIT's solely to reduce the amount of tax they pay. Unite Students Limited operated from 2007 until 2016, prior to that, effectively the same company had traded since 1991. Most years they managed to avoid paying Corporation Tax by setting off their profits against various allowances (2008 example: £35M turnover, £2M profit, £0 tax paid). However, in 2016 they reinvented themselves as The Unite Group PLC, a REIT – this gave them access to much more money without having to borrow, so they could ramp up their schedule of PBSA developments – one of which was Greetham Street here in Portsmouth.

The bad news is that as a REIT, in 2018 with profits of £245M Corporation Tax (@ 19%) of £46.5M would have been due – but nothing was paid as this is an 'investment vehicle' and not a 'functioning business'. Had they been investing in property and managing business tenants, business rates and corporation tax would have been paid by the tenants justifying the REIT status (encouraging investment in property thus allowing other companies to grow). However, as all of their tenants are individuals who pay no tax, managing PBSA developments in a REIT is a great way to make a lot of money and pay no tax.

Please note, Unite Students is just an example as they have local property – many PBSA developers use the same ruse to avoid taxes.

What Government Needs To Do

Based on our research locally, the average private sector 'small landlord' pays around £500 per year per HMO room in income tax and an additional £200 in Council Tax. From what we can work out, it would appear the average student room in a REIT owned and operated PBSA pays no Council Tax at all (although PCC have stated that they will start to apply the same rules as they apply to us) and around £200 per room in taxes other than Corporation Tax.

So with approx. 9,000 student halls rooms in the city, the local council are losing out on an estimated £1,800,000 council tax and central government £2,700,000 – this is replicated across the country so the national numbers are significant with the UK student accommodation market valued at more than £50Bn by Knight Frank.

The chancellor needs to change the rules on REIT's such that when they are an investment vehicle and their tenants are paying local and national taxes, they are exempt from Corporation Tax but when they are operating a vertically integrated business that includes the provision and management of student accommodation or similar, they pay Corporation and other taxes as their tenants would do on the property management aspects of their business.

Unfortunately this will add more pages to the UK tax code, but until and unless we see a major simplification of the way taxes are levied in this country, it has to be an acceptable alternative to doing nothing and allowing the market to continue to be distorted by a small group of businesses making excess profits at the exchequers expense.

Is It Time To Become SMART?

As we approach the mid-part of the 21st century, is it time to consider providing 21st century properties for our tenants? We know many were built in the time of Queen Victoria, but as landlords each property faces a continual cycle of upgrade, refurbishment and renewal - so as part of that, should we be considering Smart technology, leading edge energy solutions and maybe, even reconfiguring the way people live?

Your 1st thought is probably that if you were building new, of course you would check out all this clever stuff but with an old Victorian terraced house, what can you do?

Your 2nd thought might be that if there was a real need, then housing associations and local councils would be doing this stuff with their properties. They are not, so why should we?

Before we attempt to answer either of those, lets look at something completely different - it is new build, it is commercial and it is nowhere nearby - but it is still worth a look.

"The Edge” is a 40,000 sq ft. building in the Zuidas business district of Amsterdam. It exemplifies how a smart building can leverage technology to help improve all aspects of a company’s workspace – from building management and energy to lighting and security.

Designed according to the “New World of Work” principles, the building challenges traditional corporate organizational structures. The Edge features a glass exterior, large open floor plans for flexible work spaces, and a dramatic 15-story atrium filled with natural light and surrounded by balconies.

So - a pretty building but what is so special we hear you ask? As one of the most sustainable buildings in the world with a BREEAM-NL rating of 98.36 percent, the Edge features a broad range of integrated facility management and energy solutions: an electrical distribution system, IT infrastructure, control devices, and power-monitoring software. Sensors, valves, actuators, and other BEMS-compatible and connected field devices were installed in ceilings and in technical rooms to create a smarter building that makes the Internet of Things  a reality (Internet of Things or IoT, another term that  describes Smart technology).  OK - we probably lost you there - so lets think about what this amazing looking building can do for its occupants..

The Deloitte building in Amsterdam

The building, constructed for the professional-services firm Deloitte, contains some 28,000 IoT sensors that monitor LED lights, temperature, humidity, infrared and motion, among many other internal building aspects. Sensors can alert cleaning staff of the day’s most heavily used work areas, for example, and provide security information via an automated security robot that patrols the grounds at night.

These sensors and other systems also help employees as they go about their work day. Using a proprietary Deloitte app, employees can find a desk (there are no preassigned offices or cubicles), get access to car and bicycle parking and the company gym, adjust the heating in a specific workspace, and find colleagues, among other tasks. In addition, the Edge is a net-zero energy building, producing 102 percent of its own energy via solar panels that line the building’s roof and southern wall. Other eco-friendly features include aquifer thermal energy storage, motion sensor activated ventilation, and rainwater harvesting.

So lets get back to the original two questions. Why aren't councils and housing associations doing this stuff - well to some extent they are, there is a little bit of solar power here and there and the affordable homes Radian built by the bowling green at Copnor bridge use about as much power as it takes to boil a kettle, they are so well insulated. But generally, these providers cater for the less able and are also trying to do so on a budget to keep housing at the low end of affordable, so for them, it is not a priority. Having said that, it is unbelievable that these organisations have not looked at rainwater harvesting, sustainable drainage systems or micro-anaerobic digesters - apart from the cost savings any of these applied to some of our local estates would solve our nitrates problem overnight.

So what can you do to a Victorian terrace? Well, believe it or not, you have probably started without realising - you have insulated, you have upgraded the boiler to a condensing boiler, you have added thermostatic radiator valves on all of the radiators, many have switched utilities to greener suppliers and some of you have also added solar power. So we are all on the path already - the key is to gain an advantage by using these new capabilities where they work for you.  You remember the days of the landlord with a chain of keys, fumbling to find the right one? Now look at the serviced accommodation providers who send a code to the phone of their guests which operates the Smart lock and lets them into the property without the need for the landlord to attend, and stops working at the end of their designated stay.

The challenge, as we constantly upgrade our properties, is to identify what will benefit our tenants and thus make our properties easier to let whilst ensuring happier tenants.  Next time the boiler needs replacing, is it a better bet to look at an air source heat pump? If there is a car port, is now the time to add a charger for the car? If you are going down this path, perhaps a battery storage system to store the excess from the solar power units and also, to allow you to get cheap overnight or time of day tariffs for the power usage - one thing ALL tenants worry about is the bills, and if you can give them a home that costs less to heat, has cheap electricity and which can be easily controlled then you are on to a winner.


What about the rest of the Smart universe? Would you be happier if your smoke detectors sent you a message on your phone when they go off? Would voice operated lights and switches be useful to a disabled tenant?  The list of possibilities is endless.

(First published on the PDPLA site - Dec 2019)

As Arnie said, I'm back

Can't believe it is 5 years since I last posted here - if you want to see where I have been, read any of the 400 news items on www.pdpla.com  the vast majority written by me and thus satiated my need to communicate and left this blog fallow.

Going forward, I am going to include the personal perspectives from that website here as I know many will struggle finding wheat in all that chaff.

Enough farming metaphors for one blog - seeing as I am a total townie and get withdrawal symptoms if I cannot see buildings (especially coffee shops!) even though I have relations who farm the land for a living.

Au Revoir.

Falling Student Rents in Portsmouth?

This year there appear to be more student landlords here in Portsmouth with property not yet let than is normal for the time of year, yet the University confirm that there will be an increase in new students (about 1,000) this year and no new halls developments are coming online. How can that be?

Well – one possible solution:  This year we have, say, 12,000 students in private rooms around the city and they are 40% final year, 40% second year and 20% first year (estimate based on the fact that there are halls places for 1^st years and these are always full so we only get the overflow). Next year 60% of our rooms are already taken (current 1^st and 2^nd years moving up a year and staying where they are or moving in with friends in an alternative property). This leaves 40% of rooms empty (4,800 rooms ~ 1,200 houses) some of which will have been taken by the 20% of 1^st years moving out of halls but even if they all had rooms already, that would only be half of the rooms).  So we have between 2,400 and 4,800 empty rooms at the moment and will need 5,000 if the Uni prediction of 1,000 more 1^st years is correct. So we either need 200 more rooms than are in use this year or 2,600 depending on what the current 1^st years have done.

So I’d argue that the letting agent who is advocating reducing rents is panicking and as supply will be less than demand, their action will damage their income and that of their landlords but not affect anyone else and could well result in them losing enough of their landlords to ensure they drop out of the business, which would be no bad thing (just my view).

But there are a lot of suppositions here and when you have rooms empty, it is very hard to sit tight and do nothing until mid-August hoping the rush of 1^st years will be big enough to fill all of your rooms.

In the coming years, I do think the new halls coming in will make it much harder to let properties further out (especially Fratton) and properties that have limited amenities (tumble driers, TV’s, etc) and which exclude many bills – so the alternative to dropping prices is to offer more and that need will increase in future years, so if I had any empty rooms, that is the path I would be considering.

Condensation & Mould in Shared Housing

The local 'Landlord Accreditation Scheme' has been overwhelmed this week with debates about mould, condensation and damp - I think the local council guys were surprised how big an issue this is for most landlords, especially this year.

My thoughts follow:

This is a perennial problem – Portsmouth’s terraced housing stock was designed before central heating and double glazing and even if the knowledge had existed to handle issues such as damp in these houses, it is unlikely they’d cope with 4-5 adults in a house, having daily showers and drying washing.

The houses were built in a time when ‘having a bath’ was a weekly event and open hearths and single glazing ensured maximum ventilation. So damp and condensation would never have been an issue.

However, maximum ventilation equates to cold and uncomfortable from a modern perspective so we have rectified that with blocked hearths, double glazing and central heating. This lack of circulation or the ability for a house to ‘breathe’ is exacerbated by laminate floors, fire doors and particularly with students, the fact that all internal doors are closed most of the time.

You then add moisture to this equation with regular showers and much washing (remember when the houses were built, wash day was once a week and all washing was dried outside) and unsurprisingly, we get condensation and the resultant mould.

I find the worst spots are the corners of walls where the ‘cheap/quick’ cavity wall insulation leaves cold spots and it does not help in student houses that they let the houses get quite cold. One of the reasons more and more of my houses are now ‘all inclusive’.

So what can be done? Humidity sensing extractors in bathrooms are a must. Set them to 50-60% humidity.  The surfaces in the bathroom also need to be mould proof – think all surfaces tiled or covered in vinyl, otherwise you will decorate annually. Having fixed the bathroom, the other problem is how to dry washing.  Tumble driers are the ideal answer – but students paying electricity bills will not use them and where I have used them in ‘all inxclusive’ properties they have been overused and bills have been huge, so they have now been removed.

What we need is a low cost alternative to a tumble drier that dries clothes without allowing the moisture into the air in the house. Outside washing lines are good but during the student year, it is often too wet and cold for this to be of use – so they dry on small airers indoors.

Many council maisonettes have communal drying rooms – slatted walls front and back allowing the wind through but coupled with the roof, keeping the rain out. These work well but in the limited space available in the average HMO, are probably not practical unless a loft conversion is planned anyway.

I remember in days past my family used a ‘Flatley’ which was an electric drying cabinet for washing. Not ideal as it did not capture moisture but a modern day alternative based on electrically generated airflow rather than heat would definitely prove popular in all of my houses.

The more interesting question is what happens when current housing stock is replaced with Code 4 or even Code 6 building standards? These will ensure that even small families will experience condensation and mould where today, it tends to be restricted to houses at full capacity.

Contradictory Definitions of Habitable

 

The definition from the Planning Portal is as follows:

“Any room used or intended to be used for sleeping, cooking, living or eating purposes. Enclosed spaces such as bath or toilet facilities, service rooms, corridors, laundries, hallways, utility rooms or similar spaces are excluded from this definition.”

There are 2 areas where I think either the definition or its usage need to be improved,  the first is in relation to HHSRS and the 2^nd is in the definition of Mandatory HMO’s.

I am increasingly seeing EHO’s reporting ‘Category 1 (Risk of Death) Excess Cold Hazards’ in centrally heated houses because there is no fixed heating in the kitchen or perhaps an internal toilet. Whilst we can debate whether a small kitchen with a cooker, hob and boiler actually needs a radiator, my reading of the definition is that toilets are excluded and this hazard is therefore not valid in that case.  Kitchens are definitely included in the ‘habitable definition’ as they meet the criteria of ‘used for … cooking’ so you could argue it is the application of HHSRS which is at fault here rather than the planning definition.

However, I think we can fix the HHSRS issue by removing the word ‘cooking’ from the definition of habitable.  If a kitchen is actually a kitchen/diner or is one with room to sit and eat then yes, it probably will be used as a ‘living room’ in some way and will need fixed heating separate from a boiler or a cooker. This is covered by having the word ‘eating’ in the definition. However, all of those small kitchens with no room to sit and eat which only get used for cooking and cleaning, will not result in a ‘severe risk of death’ (as implied by HHSRS cat 1 hazard classification) simply because there is only a boiler or a cooker for warmth….

Removing the word ‘cooking’ from the definition allows one to distinguish between a room where cooking and eating occurs which needs heating and one where just cooking occurs which, whilst it may be uncomfortable, probably does not need fixed heating to avoid significant (Category 1 HHSRS) risk.

A Mandatory HMO is defined as being  “of three or more storeys and occupied by five or more persons forming more than one household.”  So where does the habitable definition come into this? Well, it doesn’t directly but in recent months I have seen a small uninhabitable cellar which houses nothing other than the utility meters being classed as a 3^rd storey as well as an unused loft space which, whilst boarded and accessible, was no way habitable. I think the ‘3 storey’ element came from fire safety experiences where multi-floor stair wells act as chimneys and greatly increase the risk to people should a fire occur and the damage when it does, coupled with experience dealing with hostels, lodges and the like where the probability of fires is greater. What we have today are EHO’s looking for reasons to include buildings within the definition when they should be looking for genuine fire risk.

 I’d argue that the situation could be improved if the definition were updated to read, “A dwelling with habitable rooms on 3 or more storeys occupied by 5 or more people” Note the addition of the word ‘habitable’ – this ought to exclude the 1^st and 2^nd floor maisonette with a front door on the ground floor being included which is one of the issues today. Also, note, I am assuming my new definition of habitable here, not the original one.

 

Or you could turn it around and go with HHSRS speak and say that because the cellar has no fixed heating, it is not a habitable room and thus there is no 3rd storey...

 

Does this help or am I missing something?