A landlord has spelled out to EYE just how devastating the consequences of a blanket licensing scheme will be if it goes ahead.
She will have to sell her property and the tenant will lose their home. The landlord may also well risk being criminalised.
The landlord, a pensioner, has a one-bed studio rental property in Croydon, where the council is planning to bring in mandatory licensing for all properties on October 1.
She said that her property brings in £450 per month, compared with a £750 licence fee which would last for five years, but is payable up-front.
The landlord said: “I literally cannot afford it. But in any case there are no issues with small landlords such as myself who look after our properties and our tenants.
“I will have no option but to sell up.
“I have a very good tenant, but one who is on average earnings.
“If I raise the rent to cover the cost of the licence, the tenant would have to move out and then I would probably get someone less good who may think they are over-paying on rent and not treat the property with the same respect.
“I bought the property six years ago as a boost to my pension and I am sure there are many like me.”
The landlord said she had only found out about the licensing scheme through the local newspaper.
She said: “Maybe the larger landlords were informed by the council of its plans, but not the smaller ones.
“I understand that as well as paying a licence fee, I would also have to book myself on a course and ask my current tenant for a reference. To me, that seems quite humiliating.”
She has now put £50 into a fighting fund being raised by Croydon Property Forum Ltd, which has been set up by landlords and agents to fight the council’s proposals.
An application for a Judicial Review is set to be heard on August 4.
If the case is not resolved by October 1, would she buy a licence? “I honestly don’t know, because I just cannot afford it, but if I don’t, I would be criminalised.
“At the same time, I want to be completely fair to my nice tenant. I would go and talk to them about the situation and give them plenty of time to find somewhere else and move out.
“It would then probably take me at least three or four months to actually sell up.
“The problem for small people like myself is that we simply don’t have a voice.”
She expressed the hope that agents and landlords may contribute to the fighting fund. Croydon Property Forum has so far raised just under half of the £60,000 it wants to mount its challenge.
The Forum website is here
A spokesperson for Croydon said that there is an earlybird discount of £350 that is valid until the end of September.
First off I do not agree with the blanket licensing, I think it’s a lazy way to raise revenue whilst they ignore their current powers.
BUT if you cannot afford £750 maybe you should not be a landlord? What happens if you have an unexpected repair at the property? Does the tenant have to wait until you save up?
I feel sorry for the landlords of Croydon but this argument does make you think.
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It sounds as if this lady is too kind and cares for her tenant too much. I guess that is where she is going wrong; a one bed in Croydon should make £700 pcm?. She really needs to double the rent. If her tenant can’t afford the rent let Croydon pay housing benefit. Furthermore one has to question if Croydon has consulted properly if she was unaware of their latest money grabbing scheme.
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HEADLINE
Rogue Council penalises pensioner.
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Rookie landlord should use an agent who could likely obtain better rent pcm to increase revenue and off set increasing running charges.
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??? add 12% to the rent to cover the Agency charge plus another £14 to cover the licencing charge just so central government can mis-manage the economy, Great solution Trevor; that will help fund the Peers’ £200 per day coke and slapper allowance
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Mr May. Secondary properties allow end of year tax off sets – like the agents bill.
I don’t know any properties that wont attract some ongoing repair costs.
Other readers have said the rent also seems low. The landlord said if increased the tenant is likely to go. So why not accept an agents fee that can be part offset and gain higher rent.
Too many DIY landlords whinge about the bits that go with the territory.
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It still puts the bill up for tenants, this is a stealth tax on tenants to bring in revenue HMRC refuse to collect!
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If every council collected £12.50 per tenancy per month (750/60) they will bring in £51.25 million for all 4.1 million tenancies
If HMRC knew who all the landlords were they would be able to tax an estimated additional £19 billion;
Assume 25% tax on 20% profit about £950 million. (Oh BTW Mr. Toon this is where all the cash is being laundered)
Someone needs to pull their fingers out of their ears and listen!
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Sorry forgot the multiply the licencing tax by 12, read that as £615 million; still only 65% of what they would be collecting if they had thier house in order
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Some good (or at least less bad) news for the landlord in this case – if she applies for a Croydon selective licence by 30th September, the application fee is reduced to £350. The higher £750 fee only starts on 1 October. Free information available at http://www.londonpropertylicensing.co.uk/croydon.
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If they can do it for less than half price for a pre-October application then that suggests to me that their true running cost of the scheme is around £400 per property less than their standard tariff.
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If your a landlord and can’t afford £12,5 a month or £2,88 a week, then you should sell NOW!
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Whilst I understand and accept most of the points made here, it really is wonderfully refreshing to read about a non-greedy, compassionate landlord. I’m sure her tenant is very happy with her abilities and her fairness, and, as she says, goes very much out if his way to reciprocate.
Of course, I could have posted about how I could have got her a “good” tenant at market rent, and how even after my fee she would have still been better off, but I don’t see that as being what this story is about.
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