Updating post from Reddit.
Richmond is my council and I’m wondering whether it’s worth using their scheme and hopefully getting the property into the hands of those that need it. Would appreciate any insight from those who have done this at their local council.
Yes. I have an ex-council flat in the borough of Richmond but actually rent it to Hounslow through its private Sector Leasing scheme because when I did this in 2012 Richmond said no. Let's assume Hounslow and Richmond scheme's are similar if not the same. Also I am assuming you rent to them and not a third-party, if its a third party like Axiom avoid like the plague as its my long story below but worse.
TL;DR
If you like your property then avoid, if you have a property that you probably can't rent on the open market or sell then consider it but if you you are sentimental about the place it will be heartbreaking after your first visit.
Long bit:
My ex-council flat is in a rough estate but it was where I grew up, I paid off the mortgage in the mid 00's from when I bought it off my mum when she could not sell it on the open market and I had a sentimental attachment to it. I wanted to keep the property as part of an emergency plan to ensure I always had a place to live after I moved out in 2010 so I kept it empty and visited it occasionally. Someone told me about the PSL scheme so I put my flat forward and they informed me of all the work needed to get the place fit for habitation. This was about £10k of work and included replacing the heating, a new kitchen, flooring, full a repaint, new electrics and wired fire alarm system.
All work done and PSL signed, rent was below market rate but I knew I could not get market rate because the estate was not good. 3 years later I am told I have 28 days to refresh the property if I want to renew. I visit and its a mess, internal doors were missing or broken, so many holes in walls as it seemed no one liked a central TV location. Bathroom was covered in mold. Paper ripped from walls in a bedroom and the kitchen. Kitchen floor destroyed. Bathroom tiles had hairline cracks on them. I got the place back to scratch with the bare minimum of work and then put out to rent for another 5 years at a slightly higher rent. Agued about a missing kitchen door which I got the council to cover. A few years later another call to make things right or contract will be cancelled mid term in 28 days. This time tenants had let the bath leak for what seems like months causing artexing in the ceiling to peel, this lead to an Asbestos scare. I pushed back heavily on the council this time as a leaking bath should have been handled by them, I had to cover the cost of an asbestos test which thankfully came back negative but they did put the damage right eventually. About when it was time for renewal COVID hit and they seem to forget about renewing, they had also suggested they were going to stop renting directly so I kept my head down. During covid they left the property empty for 2 years and during that time an external water tank bursted causing damage that cost £3k to fix on a budget. They didn't discuss renewal, I didn't mention it either. About 2 years ago another 28 day notice message, this time stating the fire alarm system needed to be upgraded to new regulations, this was expensive. Neither side mentions renewal. About 3 months ago they finally asked about renewal and even paid me a bonus to extend, any conversation about them not doing this themselves seem to have died out post covid. I have renewed for another 5 years and all I had to do was provide so much paper work regarding the fire alarms, insurance personal liability, British Gas home care 400, EICR and Gas safety They also wanted me to replace some blown double glazing panes but I argued that away until after new tenants moved in and assumed they would forget for a while which seems to be the case, I will replace but they pointed out 1 in their inspection and I told them what about the 4 other. In my experience the council inspections only pick the really big things and are not that thorough.
This may sounds bad so why did I renew? since May 2012 rental has brought in £140k in income against £40k in expenses. Every payment made on time, no void periods even when it was empty for 2 years that I know off, I've never had to deal with the tenants directly. The certificates I have to get I do through a third party and it goes relatively smoothly.
If anyone has read this far I expect I might get some heat for renting an ex-council flat back to the council for profit. I have tried to sell the property back to Richmond & Wandsworth twice, I almost did but COVID happened and this time around they straight up said no. The PSL was sold to me as ethical renting and I liked that, it did not realise it meant it was rented to short term homeless families who will not treat the property well. Ia also never realised it would be as lucrative as it is. It is still part of my emergency plan but if I had to move my family back into that flat it means so many other emergency plans have failed.
I think I have gotten off relatively lightly, the person who suggested Hounslow PSL to me decided to try Axiom a few years later and it was a nightmare, there have been years of arguments over non payment and repair to damage that is above wear and tear. That person has not made a profit.
This is my story, others may have better, others may have worse. my TL;DR sums it up.
Edit: spelling
Crikey. Thank you for the very interesting and comprehensive reply, much appreciated.
So my place is in a perfectly nice part of the borough and I’m putting about 40-50K into the renovation, extended the top floor rooms, new walls, new ceilings, insulation, new floors, complete rewire, plaster, new bathroom, new kitchen. I could easily rent out on the open market.
The Richmond schemes are listed here, for anyone else reading, and it does look like there are other - better? - options for residents but certainly your experience is enough to make me back off somewhat as it’s the place I grew up as well.
https://www.richmond.gov.uk/landlord_lettings
I am still curious so I’m going to contact them anyway, I would expect 17-1800/month or more which would be closer to £260K over 12 years ignoring inflation, as that is the housing allowance for the postcode.
Stay tuned for further feedback and thanks again u/nibor good luck with your place.
This is the Hounslow equivalent.
https://beta.hounslow.gov.uk/private-landlords/letting-property-us
It is Private Sector Leasing not public, I will correct my original post. Public sector leasing stuck with me because when I first looked into this around 2011 they made a big thing about being a public service which I eluded to. I see that is scrubbed from the latest documentation which is similar to Richmond.
Reading both of these statements after 13 years of practical experience makes me realise there is so much that is hidden between the lines that I’m not surprised it looks attractive, I recall Hounslow being more obvious the scheme was for at risk tenants when I first started but you’d be excused for skipping over the fact they are doing this to meet an obligation to house people who can’t get private renting and there is no social housing available.
While I do believe the PSL team had real trouble finding people for my flat due to its location and I was genuinely happy it was being used to help families at need I truly underestimated how much damage they would cause. I had a biased, we were given the housing when I was 2 as an at risk family and treated the place as a home which is why my mum bought it in the first place. I should not have expected that from other purely based on my own experience of other long term tenents in my estate.
If you live in a nice area then go through open rent and manage yourself or via a letting agency with a higher fee to cover day to day management. I could not do that and am happy with the arrangement but if it was a nicer property or area I’d go open market..
Thanks for the response. My main motivation was less for reliable rent and more for reliable tenants but that has been turned on its head. My other house in Richmond has only had two tenants, the first of whom I knew personally and were friends, so I don’t have a realistic sample of how to evaluate tenants well. I do use Open Rent and I like it, so I will default back to that, but the question remains open, probably for all landlords, on how we reconcile fair rents with good tenants and checks, all with the new Tenants Rights’ Bill on the horizon.
The Hounslow site was a tad clearer about things and more helpful with explicit requirements. As there’s no mortgage on the property I feel that it’ll become a guaranteed problem to go via the council than not.
🙌🏽
I rented a flat to a council in willesden for a few years. At first the council paid the rent. Later that changed and the tenant got different benefits meaning they had to pay the rent themselves.
Tenants stopped paying rent shortly after and it ended up costing thousands and many months to evict via the courts. Council didn't care.
As a bonus, they trashed the flat. It's now sold and I will never rent again.
This is what I came to say as the same thing happen a lot.
Council starts paying, then the tenant gets benefits and have to pay directly. Then the council doesn't care and they will tell the tenant NOT to go until evicted.
I'm short, don't do it.
I did this for 2 years with barking and dagenham . I agree with everything r/nibor has put. They used my flat for temporary accommodation , and with that you get a lot of troubled people ( nicest way I can think of to put it). My place required a lot of work , mainly cleaning ,carpets ,redecorating, pest control ( running alive with cockroaches)council wouldnt help , I would have had to sue the council and I could be bothered, so I would say NO
From what I’ve read and I’m sure every council is different. The council take the property for a minimum of 5 years, pay below market rate but do guarantee income and repairs.
Thanks for the feedback, this sounds like an overwhelming no so far.
Out of the two things Richmond offer below (there’s more but not relevant right now) does either sound a better option than the one you had?
> Private Sector Leasing
> We can let and manage your property, guaranteeing your monthly rent and taking care of inspections and general repairs or maintenance.
> A dedicated officer will assist you through the letting process and your lease with the Council will last three-and-a-half years.
> Private Rented Sector Service
> You can find a short-term and hassle-free tenancy for your property and agree rent based on the Local Housing Allowance.
>You will benefit from us finding a suitable tenant for your property, with direct payments being requested to the landlord. Rent in advance and incentives are also payable.
The incentives would have to cover more than just maintenance- damages would have to be covered. New kitchen new bathroom, flooring, decorating etc…
Better rent privately but at a lower rate. Hopefully will get a better tenant.
Like most have said the councils used to be good deals but most use them as a dumping ground for problems tenants.
It’s a ruinous situation and bad for everyone concerned especially the communities these people live in.
u/nibor nails this on the head, I think. Don't expect model tenants, but then if you own the property already, or can buy one cheaply, the council will take it off your hands and it doesn't necessarily need to be top of the market condition, and you'll end up making some (relatively) hassle-free money. Just make sure you're prepared to do a big refresh number on it every now and again.
Obviously this is no excuse to rent out a slumlord property, but as long as it's capable of being warm and dry, you don't need to feel bad about the carpet not being plush etc.
One thing I would say is, consider who they'll be putting in there, and how this might impact your neighbours. I have one of these houses a few doors down from me, and the current tenants? Never see them. Not a noise, it's almost too quiet.
The tenants before them? The police put the door through twice in the space of a couple of months. Quite the difference.
We did this on one of our properties, years ago - never again.
If you do, you've got no control over who they rent it to. I did similar, and the tenant's drug dealer smashed all the windows and doors, because the tenant owed him money.
Don't do it!!!!! I did.
Terrible - it's a conflict of interests from day one.