Watch: How can landlords succeed after the renters’ rights bill?

Speaker (00:06.04)

First of all, well done for coming in this sauna and probably the hottest day of the year. It shows your dedication, but I have something very cold for you. Because I think if you think of something cold and also if you see a fountain when you want to go to the loo, you know, that’s not a good idea. But I’m hoping that by you looking at ice hockey, you might start to feel a bit cooler.

But there’s a method in me having ice hockey up there. Has anyone actually watched ice Been to an ice hockey match or seen it? Yeah, it’s very fast, isn’t it? Very, very fast. That’s a connection. And what are they looking for? That, the puck. Now, I’m going to hold that thought and come back to it in a minute. But next bit.

I worked in the pharmaceutical and life science industry, including Avcam, and there’s a former colleague here today. And one of my bosses was a Canadian, and he always used to say, skates are where the puck is going, not where it’s been. And so this is when I worked as a solicitor. You can see me a younger, dark, and then me looking slightly more skeptical when I decided it was time for me to leave. So I worked for big companies like GlaxoSmithKline.

And so I gave it all up when I was 51, because I was a bit fed up. I decided I’ll do something different. And I went to King’s College London and studied French for three years and came top, which I was very proud of. And that’s me on my graduation day. And I bought that house amongst others. And no, it’s not an HMO. It would make a lovely HMO, 4.5 meters wide, absolutely huge, two bathrooms.

But I like an easy life, so hats off to all of you who do HMOs. So what I decided to do, I had a bad experience with letting agents. And I also saw that although there’s some fantastic content out there to help you get on the property ladder, to do all your developments and things like that, all the sexy stuff, the mergers and acquisitions, as I call it, there’s not so much on the grunt work, the operations.

Speaker (02:20.607)

I set up the independent landlord. I bought the domain name on the 22nd of July three years ago, so not yet three years ago, and decided to do something that think nobody has done in property as far as I know, almost nobody, and there must be some exceptions, but my website is free. All the content on my website is free. And what I did is I brought my knowledge of having been an in-house lawyer for all of those years, 12 of which were at board level.

and bring it to the private rented sector to help everybody with reliable content and practical content, which helps people actually do this off, even if they use letting agents. So that’s enough about me. Back to the puck. What are the rules of ice hockey? Now, one of them is to look forward. And I know Simon was just talking about this earlier. So you’ve got to be looking, where is the puck heading?

And this was what my boss always used to say, you’re looking at where the puck was, not where it’s going. I can’t do the Canadian accent. And you’ve got to embrace the new rules of the game because the rules are changing. And what counts now is what you do now. Nobody cares about last season. Nobody cares that 20 years ago, as you were mentioning, things were better. And nobody owes us a living. Every single sector thinks they’re persecuted by the government.

It’s not just housing. I say that because I’m new to property. I only bought my first Vitelette six years ago. And so I know that everybody finds, there are very, very few industries that say that they have it easy. And so you’ve got to get to, if you’re going to stay, or even if you’re not going to stay, you’ve got to get to acceptance in the grief cycle and not spend energy on getting angry. And this is what I mean by that.

I did an MBA a very long time ago, and this is one of things I remembered. Going through change, managing change, is not easy. You go through all these different stages. I’ve seen so much anger on social media about the renter’s rights bill. Denial, it’s going to go away. There’s going to be amendments. Reform is going to win, whatever. Resist, people getting angry, et cetera. And then exploring, and then you get to acceptance.

Speaker (04:44.577)

Now acceptance doesn’t mean that you necessarily are going to stay. It just means that you accept the fact it’s happened. The people have spoken. They voted. All of the main political parties had very similar things to the Renters’ Rights Bill in it. This is democracy. It’s going to happen whether we like it or not. And so when I was a lawyer, I never used to spend time saying, that’s data protection at GDPR. I might have moaned about it. And then that kind of disappeared.

But there’s absolutely no point in moaning about it because it’s to happen. And what it is, is an opportunity. And it’s exactly what Simon was saying earlier. And what I’m hoping that’s going to happen today is I’ll help you get to acceptance so you miss out on all that negativity and the waste of energy that’s down below and get straight to acceptance. And then you decide what’s best for you and your business. And if you want to sell up,

then you sell up, it’s fine. I sold one of my properties a few years ago and wasn’t making enough money. And I know that a lot of people with bigger portfolios like Adam, you do that as well. So the next rule is to be adaptable. Think about what are your options? And I know it’s going to be tough in particular for student landlords. And to think about, do you need to change your strategy and keep up to date using reliable sources?

There is so much rubbish out there on the renter’s rights bill. mean, most people, they’ve scraped it off AI. And even the expensive version of CHAP-GBT, the $200 a month one still calls it renter’s reform bill. And it is quite inaccurate. know, because I do actually use CHAP-GBT not to write. But I do sometimes ask for summaries and things. And I’d say 10 to 15 % at the time, it’s wrong.

But often what people do with content is they just copy what other people have done. They don’t understand it themselves. They’re not actually read it themselves. And as a solicitor, I have read it many, many times. And one thing that we do know is stuff will come that we didn’t predict, because that always happens with law. You don’t know how the courts are going to interpret things. So get reliable sources and prepare for further changes, because there will be further changes.

Speaker (07:04.768)

The Housing Act 1988 has been changed many, many times. In fact, the Renters’ Rights Bill changes the Housing Act 1988. So in many respects, this is an iteration of the Housing Act that came into force when I was at university. I remember in the old days, when I was a student, people would actually set up a limited company to take a let of a property so that they didn’t… so that they were outside of the rent tax.

So a lot’s changed since then. So changes bring opportunities. We didn’t collaborate on themes here, Simon and I, but it is true because there is so many, there’s kind of mass hysteria in the press. And maybe there are landlords who are leaving that should leave because they’re not taking it seriously. They just, they’re treating it like passive income and I’ll get onto that in a minute. But think about how you can prepare your team for change and your tenants as well.

So get ready. My bit of advice from 25 years, as I said, as a solicitor in business, so I’m not a litigator. I’m not someone who makes money out of going to court and letting people think and find things out. Don’t waste time chasing loopholes, unless you want to spend a lot of time with people like David Smith, who’s a wonderful lawyer. But it takes so much time and energy going into lots of detail and all the court process.

It’s not for the unwary. And so for HMOs, I know there’s a lot of people who talking about licenses to Occupy. I’ve done a blog post on this. the short version is, it’s very risky. I wouldn’t do it personally. Robust tenant referencing and tenant selection. This is really hard from HMOs because you have such a high turnover of people. And I know there’s a concern that

Some HMO tenants are going to be treating it like serviced accommodation, move in and move out and that’s hard. But for single family houses such as mine, not, you know, I’ve got Victorian houses, they tend to want to put roots and stay there for a long time. So the Renters’ Rights Bill is not such a big deal for them. Very important to have tenant referencing and to ask, to find out why they actually want to move into the room, are they there for a long time or…

Speaker (09:25.479)

Do you think that they’re only going to be there for a short placement or something like that? student landlords in particular have to adapt to the world with no fixed terms and it’s hard for ordinary HMO landlords because you’re going to have more people moving out. It’s not going to be as predictable. You’re not going to be saying, in six months time that person’s going to be moving out.

they could be moving out in three months notice because they only need to give two months notice. So it’s tricky for student landlords and we’re going to need to have a data driven approach to setting and increasing rents because it’s going to be easier for the tenant to challenge the rent at a first year tribunal. But a good thing and one good bit of news for HMO landlords is that, sorry, investors.

identify as an investor, not landlord such as myself. But anyway, those who own HMOs is that you have good data on what’s the market in your area because you’ve got other rooms in the same house. So you can say, well, that is the market rent because somebody rented that property two months ago and that was the market rent. Because tenants are actually, well, they can now, but no one seems to know about it. But tenants are going to be able to challenge the rent after they move in in the first six months.

up until now they’ve been able to but the judge could increase the rent above the market but the rules are changing so that they can only keep it the same or reduce it. But I don’t think that the vast majority of tenants are going to be, you know, are going to understand all of these rules so much and if you set a fair market rent and you have a good product they’re going to be enjoying their life rather than spending time worrying about, you know, whether they could save a little bit of money on the rent.

And I know that a lot of really successful landlords, HMO landlords, have such fantastic houses that are way like Caroline Patterson. I haven’t seen her here today. her properties are just so amazing that people are happy to pay more than the market. And they wouldn’t be challenging it. And anyway, in that event, they’ll just say, a property of this quality is worth more. And that’s what you’d need to say to the judge. So as a new mindset.

Speaker (11:45.436)

I know that the property gurus talk a lot about mindsets and as I’m talking to people today that are used to hearing about mindset, this is my new mindset for investors. So it’s a mindset of providing a high quality product to customers because they can come and go easily if they want to. And so the how of what we do is going to be more important. And it’s about focusing on attracting and keeping

happy tenants, because if you’ve got happy tenants, they stay a long time and you don’t get any aggravation from them. And that’s all what we want. I know it’s different because I do houses, but they stay for years and years and I never hear from them. It doesn’t take much work at all, which is probably why I prefer singlettes. But a really important thing is that investing in property is not passive income. Because if I put my money in my ICER,

and I get 4 % or whatever, my cash and my ISA, then that’s what I get. It’s tax free. But if I put the same amount of money into, because I’ve got a fair amount in my ISA now, and stocks and shares as well. But if I put the same amount of money in property, there’s all sorts of things that happen. particularly if you’re doing all the work that you need to get an HMO up to spec and to manage it, et cetera.

That is not passive. And if you outsource to other people, that eats into your profit. So it’s not passive income. Sometimes it may feel a little bit passive, but it’s not like having money in your bank. And we can’t wing it anymore. And I know a lot of landlords have winged it in the past. I I did when I first started out, because I didn’t know what I didn’t know. And so we need to take ownership, even if we delegate to agents, because they’re not all good.

And even sometimes you might have a really good letting agent, but the people change or just they’re having a bad day and they miss things and we just need to be involved in it. So I don’t know if any of you remember this advert. It’s the old ology advert. It’s, it’s, Beatty. And she was talking to her, her grandson on the phone who just got an ology in ceramics or pottery or something like that. And

Speaker (14:10.953)

she said to him, people always need plates. And that’s the big, the big message to everybody is, yes, it’s going to be difficult, particularly at the beginning, once we get to know the new rules, and then after a while, we’ll wonder what the fuss is about. But fundamentally, people still need homes. There’s still a shortage of housing, there’s more demand than there is supply in most places, and people will still need homes. And for those that provide a really fantastic product,

particularly those in co-living, HMOs, where it does a fantastic service to get people into renting who can’t afford their own place as well. There will still always be those people as well. So, you know, my advice is to stay informed. There’s a QR code there. You can sign up for my newsletter. The newsletter is totally free. It goes out to 11,000.

every week. Quite a number of you in the audience are subscribers and I write it every Friday morning. I was in bed this morning tippy-tapping, half past five, sending it out and it’s just my take on what’s happened over the week, what we all need to know about and I’m not political. I don’t get involved in all of that because…

I mean, there’s only so many hours in the day. I just want to be able to bring reliable content to everybody. So that’s it. Thank you for listening.