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?

 

 

Post Nativity Update - Visit of 3 Wise Men from the Council

Good news from Buckland, here in Portsmouth (aka Bethlehem), tenant Mary & her new baby are doing very well and partner Joe has praised their new landlord for finding somewhere for them to live when others would not help. 

Not such good news is the visitation of 3 wise men from the council. 

First, a chap from planning commented on the change of use from agricultural to residential use and issued an enforcement notice as it was not within permitted development rights. 

Then the chap from Housing Standards complained about housing animals and people in the same space and issued a repair order as he considered the straw floor to be a category 1 HHSRS hazard. 

Finally, the man from Revenues and Benefits arrived and told the landlord he was responsible for Council Tax as in his view, this was some odd form of HMO. 

As a result the friendly innkeeper has had to issue a Section 21 to Mary and Joe and they have to find a new home, while the innkeeper faces up to £20,000 in fines for not having an HMO licence plus other charges for the other issues. 

If only these people would realise that we are offering a public service and treat us accordingly.

The Green Deal - Great Concept / Corrupt Implementation

The Green Deal is a typical good idea turned into a costly piece of legislation that takes money from the poor and gives it to everyone in the supply chain.

There has been lots of noise in the UK about the ECO contribution in domestic energy bills and as a result, that will be reduced by around £50 per household next year, but that still leaves 4-5% of each bill going into this bucket - and what does it get spent on?

I had assessments on several of my houses last year and one, to use as an example, was by the NLA (National Landlords Association). A typical pre-war terrace with rear extension, double glazing and old gas central heating. To improve energy efficiency, cavity insulation on the main house, external wall insulation on the extension and on the flat roof of the extension plus a new boiler and more modern controls would have been worth considering and the assessment reflected that. There is an issue in that the Green Deal is covered by the consumer credit act which applies to an individual so it cannot be used in a landlord/tenant situation where the landlords house gets the benefits and the tenant pays for it in his/her energy bills but that is likely to be rectified by Parliament in the new year. This situation does not apply to the house in question as I offer it ‘fully inclusive’ and as such, am the landlord and pay all of the bills.

I chased the NLA to point this out and they got back to me and stated they could do all of the works for £8,433.39p.  I commented that that was a surprisingly accurate estimate from someone who only had the Green Deal EPC and Occupancy Assessment to work from and who had never seen the house. I also commented that I believed I could get the work done for less than £5,000. She then asked if I had any tenants on benefits as if so, they would qualify for ECO funding and the works would get done free of charge.  I do not so then she said she’d be back in touch after the consumer credit issue was resolved. I re-iterated that this was not an issue in this case at which point she admitted that the NLA did not have a solution in place yet other than for ECO customers….

So this is the scam that the industry has cooked up, bamboozling a well intentioned but incompetent government department in the process:

-          5-8% is added to every domestic energy bill in the country. This takes between £50 and £200 from families, the vast majority of whom can barely afford it

-          I don’t even want to speculate how large a pot of money this creates (but it runs to hundreds of millions of pounds)

-          This gets focussed on ECO customers, so a landlord who has the money to buy a house who happens to have tenants on benefits, gets a free boiler. Why? If the house needs a new boiler the landlord should buy one – maintaining houses costs money, even HMRC notices that and allows 10% against rent to cover it.

-          The industry focusses on ECO because no one asks questions:

o   The landlord gets a new boiler (and all the rest) free of charge

o   The plumber gets paid for an expensive installation (£8,433 for less than £5,000 of work in my example and that is at retail prices)

o   The boiler manufacturer gets to peddle lots of new kit and charges for 2 or 5 or even 7 year warranties as part of the deal

o   The DECC (Department of Energy and Climate Change) get to claim they have improved the country’s housing stock and reduced energy usage by spending xxx million pounds

o   And everyone can overcharge as long as it meets the Golden Rule – so you work out what the maximum savings could be, that determines the maximum cost, which becomes the estimate (£8,433 in my case), all the contractor has to do is ‘some stuff that costs less than that’…

My NLA example is just one element of the chain, I have had plumbers tell me they can get me a free new boiler (if I have benefits tenants), there just has to be something wrong with the existing one and they have never found one that did not have something  wrong yet (and have a hammer to ensure this is true on the few examples that are in perfect working order….).  

And there are many other examples of the corruption of the system here – all of the ‘free’ wall insulation (that probably achieves nothing given the break neck speed it is installed and the way in which any difficult bit (which tend to be the highest and most wind exposed) get left and also, how it never seems to work in the corners so you get those natural cold spots where the tenants complain about damp and mould when it is actually condensation), the ‘free’ loft insulation which gets laid badly or worse, over boards.

It is time this gravy train was stopped. No more subsidies for energy saving measures, if they are worth having people will pay for them. No more hype about energy efficient boilers or insulation in old houses – when you look at the whole picture, most of these investments are worse than carbon neutral.

NOT IN MY BACK YARD !?!?!

Thanks to Bold Italic for Aunt Anti (Use of) 

Did you hear the one about the man who bought a house overlooking a fishing harbour and then wrote to the local council complaining about the seagulls on his roof?  It is true. He wrote to the parking dept asking them to stop the gulls sitting there…

Or how about the people who bought luxury apartments overlooking the mouth of a busy commercial and military harbour and then raised a petition asking for the nearby car ferry to be moved because they did not like all the trucks loading at 4.15am. That’s true too.

Or the people on a new housing estate squeezed into the corner of a large industrial site who asked for trucks to be banned from the adjacent road which linked the industrial estate to the motorway? Also true.

Then there were the people who vetoed a futuristic monorail as it would obscure their view of the barren and dilapidated Victorian seafront and the ones who objected to the replacement of beach huts as the new ones would obscure the uninterrupted view of shingle for about 100m on the 6km seafront.  All true and all examples from the recent past in Portsmouth, UK – but in any city, anywhere, this resistance to change and imposition of unreasonable expectations about a peaceful idyll in an urban environment exist. Why is that?

Is it related to Maslow’s Hierarchy of Needs? (First we need physiological security – food and water, then safety (shelter and employment) and when we have these we need love (family and friends) and after that we move onto self-esteem and finally, self-actualisation). Being one of the basic needs of an individual would explain the desire for control of the local environment and comfort within it, but it does not explain the resistance to change.

In all other walks of life we celebrate change – those photos of and the excitement associated with babies first steps or first words, the marks on the wall as growth miraculously occurs, the fervent baying on the terraces of fans dreaming of a better performance from their team leading to a move to a higher league or a win against superior opposition, the wish for a better, more expensive car or TV or holiday. Wherever we look, the human race is chasing change and trying to improve and hoping for better until we come to where we live – at which point some deep almost Luddite resistance to change takes over.

I guess it comes down to the old adage, “An Englishman’s Home is his Castle” – in France people volunteer for a new high speed train line near their home as they know they will get better compensation for losing their home than if they sold it on the open market with no risk of nearby trains…  Perhaps we need, as a population, to start pointing out 2 things:

• When you buy the freehold to a property you own that property but the Queen owns the land on which it sits and she is effectively leasing it to you forever, unless she (or her government) decide otherwise 
• When you buy a property, you are buying that property. You are not buying the view or any ability to decide what is built nearby

If we could make these 2 points clear as part of the completion of any purchase transaction and support them within the planning process, I am sure that much of the resistance to change could be seen for what it is and treated accordingly – an irrational desire to attain a Victorian style of life which was not real then and cannot be real now and, if not resisted, will continue to damage our society and hinder progress and the development of our economy.

So if you see a NIMBY, do me a favour and tell that NIMBY he/she is behaving irrationally and their resistance to change is damaging the development of our society.

Conversely, feel free to tell me where I am mistaken and why you, as an individual, expect to be able to exert disproportionate pressure on decisions affecting your local environment.

Additional Thoughts on Technology Obsolescence in Housing

So if you accept my theory that there will come a time when an old house is so much cheaper than a new house as no one will want them due to the associated energy costs, here are a few questions:

•           Can change happen piecemeal?
•          Could I demolish my terraced house and rebuild a nice cosy new one in its place?
•            If I do, would we want it to ‘fit in’ or should we relax planning laws so that we can set it back from the road, build it higher,  add a garage or whatever?
•           If change is piecemeal, how do we evolve from the ‘back to backs’ which worked until everyone decided they needed a car? Or is there a better solution to on-street parking?
•          If change can’t be one by one, how do we avoid the dilapidation and decay stage of the cycle?