Today's blog is by Richard Tacagni of London Property Licensing, specialist in helping residential landlords make sense of London property licensing.
Southwark Council is the latest borough set to implement new licensing schemes for private rented homes.
On 21 July 2015, the Council’s Cabinet approved borough wide additional licensing plus a network of smaller selective licensing areas spread across the borough. Both schemes will go live on 1 November 2015.
According to the Council, Southwark’s private rented sector has seen rapid growth and about 70,000 people now live in private rented homes – about a quarter of all residents.
The Council says that whilst much of the sector provides decent accommodation and is well managed, there are problems associated with parts of the sector arising from poor management, poor property conditions and issues of anti-social behaviour.
The Council says that their enforcement activity involving multiple occupied properties has increased by 289% over the past 5 years, leading to a 500% increase in the number of HMO prosecutions over the same period. Research by London Property Licensingplaces Southwark in the top five London councils when it comes to taking housing prosecutions.
Additional HMO licensing
The additional licensing scheme will extend House in Multiple Occupation (HMO) licensing to all HMOs in the borough. Every private rented property shared by three or more people who are not all related will need to be licensed – an estimated 10,000 properties.
In certain parts of the borough, a new selective licensing scheme will extend property licensing to all private rented homes – including houses and flats rented by an individual or single household.
The scheme designation says it “…includes but is not limited to Walworth Road, Camberwell Road, Camberwell New Road, Camberwell Green, Coldharbour Lane, Denmark Hill, Camberwell Church Street, Bellenden Road, Southampton Way, Old Kent Road, Meeting House Lane, Queens Road, Rye Lane, Evelina Road, Lordship Lane (North), Lordship Lane (South)”.
Yet further investigation by London Property Licensing has found that the selective licensing scheme is far bigger than at first appears. The scheme extends across seventeen distinct areas including 134 streets and is estimated to include up to 5,000 properties.
This is one of the most complex licensing schemes to date and landlords and letting agents will need to study the arrangements very carefully.
Whilst the selective licensing fee has been set at £500 / property for up to five years, the additional licensing fee for HMOs has been set at £250 / bedroom, making it £1,250 for a five-bed shared house for up to five years. This will become one of the highest additional licensing fees in London.
Landlords who apply within the first six months will receive a 20% discount, with a further 20% discount offered to accredited landlords.
The council says there will be an online application process and all properties will be inspected before a licence is issued.
Councillor Richard Livingstone, cabinet member for housing at Southwark Council said:
"With the rapid expansion of the private rented sector in Southwark, it is vital that we’re on the side of private sector tenants and those responsible landlords who provide a good standard of housing, particularly where children are concerned. We just want to make sure this is the experience of everyone residing in a private property in Southwark.
"On its own licensing will not solve the issues created by poorly managed private rented accommodation. But it’s a step towards ensuring that rogue landlords are held accountable and curbing anti-social behaviour."
The current average value of a property in Clapham currently stands at £851,200, so what will the recent increase in the base rates at 0.75% do to the local property market (especially property values)? In many of my articles, I talk about what is happening to property values over the short term (i.e. the last 12 months or the last 5 years), but to answer this question we need to go back over 40 years, to 1975.
The average value of a Clapham property in 1975 was £41,208
However, since 1975, we have experienced in the UK, inflation of 807.5%.
Back in 1975, the average salary was £2,291 and average car was £1,840. A loaf of bread was 16p, milk was 28p a pint and a 2lb bag of sugar was 30p. Inflation has increased prices, so comparing like for like, we need to change these prices into today’s money. In real spending power terms, an average value of a Clapham house in 1975, expressed in terms of today’s prices is £374,011.
That means in real terms, property costs a lot more today, th…
There is good news for Clapham buy to let landlords as ‘top of the range’ well-presented properties are getting really decent rents compared to a year ago however, this rise in rents is thwarting many potential first time buyers from saving for both a deposit and money for a rainy day. On top of this, there is also a shortage of Clapham homes coming on the market thus adding fuel to the slowdown and affecting not just Clapham first time buyers but also those going up the housing ladder.
Whilst it is true that the Government’s initiatives, targeted at improving the supply of homes built and helping first time buyers obtaining necessary funding, are starting to work (albeit slowly), I also believe that to boost more existing home-owners and their properties onto the market, we as a Country, need to see a better focus placed on those looking to downsize (i.e. the mature generation).
If we took away some hurdles to home owners downsizing, such as removing stamp duty for those downsizer…
The average asking price of property in Clapham dropped by 5% or £43,919 compared to a year ago, taking the current average asking price to £830,517 compared with £874,436 this time last year.
The overall drop in asking prices is being put down to sellers being more realistic with their pricing and looking to benefit from the impending mortgage interest rate rises later in 2018. This is great news for first, second and third time buyers in Clapham starting their property hunting in the usually active spring market this year facing the opportunity of paying less for the property of their dreams. Even better news is that whilst first time buyers also have to pay less for their property, they also have the bonus of the Chancellor stopping Stamp Duty being paid by first time buyers!
Looking at the different sectors of the Clapham property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices …