In this week’s video, Property Investor Samuel Leeds is joined by Chris Harrington and Russell Leeds. They discuss the all-important new HMO rules and regulations. The colleagues express their perspectives of the changes, and whether they believe they will have a GOOD or BAD impact for professionals working in property, whether it be for construction companies, property sourcer’s, letting agents or property investors.
Chris explained what the new legislations entailed. The main changes signify that every 5 bed HMO or 4 bed HMO with more than 4 occupants needs to be licensed. And, how now, all properties will need fire doors, smoke alarms and compliance to get licensed.
Samuel and Chris both reveal how they are excited by the changes. They state they are feeling optimistic by the new laws and think the implementation of them have a lot more pro’s than con’s.
Russell, on the other hand, expresses his disappointment to the new legislations. From the point of view of letting agents and sourcing companies – he thinks as HMO’s are very profitable now, will slowly become less and less.
“I don’t think it’s a good thing, not so much the licensing but the extra rules, like for example the sound proofing, it’ll cost more money, I think the government are just hitting landlords left right and centre at the moment and this is just another thing making it harder to run a HMO, it’ll be more expensive.”
The discussion went on to look at the multiple factors of these legislations, highlighting the good and bad impacts it can have on different viewpoints.
“I don’t think the government are trying to get more money out of landlords, they’re just trying to get rid of the BAD landlords”, in which Samuel agreed.
Chris later added to the debate stating how paying more money towards the licensing, safety standards and overall experience of the property for the tenants will bring in more money long term for investors,
“If the investors are putting in more money, getting a higher quality finish, and a better product – it will get a better tenant and a better tenant will pay the better rent”.
The talk later identified how the costs of these new laws could reach an average of £8,000 as opposed to the current average lower figure of £4,000 to cover the safety and compliance. Not only this, the new sound-proofing laws, which are also discussed, could make the cost reach even higher.
Chris, Russell and Samuel later began to think about how long they believe it’ll take before the councils begin to implement the same laws and legislations on licenses for 4 beds, and how this could impact the future of HMO’s.
Samuel Leeds emphasised,
“The only figure that matters is what you put in and what you get out, that’s the most important thing. The key as an investor, is to get educated, find out what you need and make the most out of the situation.”