Selective licensing working in landlords’ favour

Published on 1st August 2018 by Laura West

Selective licensing to combat antisocial behaviour in areas of low housing demand does have its benefits. Many landlords have viewed selective licensing in certain areas of a borough as another piece of administration to deal with, as well as another financial burden. Professional landlords have to pay for a licence for each property within the licensed area, and also prove that they are fit and proper people to own rental properties. Yet again, another ruling was brought in to target rogue or criminal landlords. However, it was the legitimate landlords who ended up paying the price, with increased bureaucracy and increased costs.

Now it seems that this licensing is changing the face of some areas, which is making them more attractive for buy-to-let investors and tenants. Withington, four miles south of Manchester city centre, is a prime example. Old Moat, just to the west of Withington, historically has had a high proportion of council housing. Manchester council brought in selective licensing in a number of areas, including certain streets in Old Moat, as well as parts of Moss Side, Moston, Rusholme and Crumpsall. These areas were identified as having poor housing stock and, therefore, low demand for properties, as well as high levels of deprivation, crime and antisocial behaviour.

With the selective licensing now in place, landlords have to meet certain standards concerning the property and the way it is managed. Homes4U head of property management, Andrew Harrison, said changes are already being noticed in Old Moat since the licences were introduced. He said it is “fantastic”, because more properties are being maintained to higher standards and the housing stock is improving in the area. More landlords are putting their properties in the hands of property managers who can also advise people on how to be better tenants.

Withington itself is also seen as a good area overall for investment. It has a wide mix of properties which attract students, professionals and families. Within the mix are large Victorian properties and terraces, as well as 1930s semi-detached houses with gardens. Mr Harrison said this selection is attractive to investors and there are many landlords looking at the district with interest, as they seek to increase their property portfolios. He said the ideal property for investment in the area is a House of Multiple Occupancy. These properties offer great scope to extend and expand. If an HMO can be turned into accommodation from four tenants to six or seven, then the yields are greater. This is appealing to investors locally.

A fair few large properties in Withington have already been converted into HMOs or into individual flats. However, there is a limit to the number of HMO properties in Manchester. This is another attraction as there will only be a certain number of HMOs allowed. Keeping the supply restricted means demand levels are kept high so they are a good investment. With its good transport links to Manchester city centre as well as Old Trafford, demand from commuters and students is likely to remain high.

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