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Councils treat landlords like cash machines says mortgage chief

A mortgage chief has accused local authorities of treating private landlords like cash machines.

Justin May, chief executive of EHF Mortgages, makes the claim in comments about the government consultation on council tax applied to HMOs. The consultation closes at midnight today.

Under the current rules, the Valuation Office Agency has the discretion to split an HMO up for council tax purposes, creating multiple bills for one dwelling. Under the current rules, if a landlord lets a property by the room - even if the rooms are not self-contained in any way - the VOA will usually have enough to justify creating multiple council tax bills. 


May says this system is unfair and driving landlords away.

“This is another example of Local Authorities seeing landlords as some kind of cash machine to support shortfalls elsewhere in their budgets” he claims. 

“With such a heavy reliance on private landlords to provide adequate housing for people on benefits, as well as private tenants, why drive these landlords out of the market and make that environment unattractive for investment? For HMO investment, the mortgage deals in this market are not a million miles away from the early 2022 costs, but increasing other taxes and associated costs just makes the effort unrewarded” he adds. 

Another finance company managing director - James Vince of Castle View Finance - adds: “HMOs are being treated differently from one Local Authority to the next, and now that's happening in taxation and banding. This issue is not a new challenge for landlords, it's a battle that has been going on for years in some areas, with lengthy appeals and legal challenges. 

“These costs are ultimately passed onto the tenant in the form of rent increases at the worst time for both single-unit tenants and landlords under pressure from rising interest rates. Landlords are already being tempted away with more lucrative property strategies, such as service accommodation, putting more stress and strain on the entity that needs single-unit availability the most: the Local Authority.”

The government's current consultation proposes amendments to the council tax regulations via two options, each of which will see HMOs taxed as a single dwelling for council tax purposes with exceptions only for properties physically split into distinct self-contained units.

The first option involves changing the Council Tax (Chargeable Dwellings) Order 1992 so that listing officers must treat an HMO as a single property unless there are exceptional circumstances. The second option is that the government would, by an order, declare that all HMO properties are one singular dwelling for council tax purposes. 

Both of these solutions are seen by many in the industry as improvements on the current system but the National Residential Landlords Association recommends that the latter option is preferred as it would be the quickest way to make all HMO properties pay one council tax bill in the future. 

The consultation, for changes which apply only to England, closes tonight and you can see it here.

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • George Dawes

    He’s not wrong

  • Jason Flicker

    Ha ha ha ha! Dear oh dear. LoL!!! Perhaps you small time landlords should leave it to the big boys... Such as the large corporations who actually do a far better, more professional and efficient job. The right to buy a home should be a right for all and not based on "credit worthiness" then we wouldn't have this problem. If tenants didn't pay the mortgage they would be homeless. Residential landlords would hardly exist and if they did, they would be the exception to the rule. This country is obsessed with being a "landlord" as though stuck in some old Victorian bygone era. Landlords deserve to be squeezed just as they have tried to squeeze tenants. When the councils left you alone, you were still just as greedy, and so now you're only reaping what you've sown. Don't be surprised if you're now being fleeced when you've been fleecing the tenant for decades. It's time to cough up and pay.

    George Dawes

    If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.


    Do you rent or own? Are you honestly that naive?


    I might be wrong, but Jason sounds like a very bitter, jealous and aggrieved individual with an axe to grind. I wonder what his situation is and how he ended up in it. It’s regrettable he clearly doesn’t understand the workings of the property market and the lenders’ criteria requiring borrowers to be able to afford their mortgage. In the late 80s/early 90s it was a painfully time for many that had to go bankrupt and walked away from their homes before they were repossessed due to sharp interest rate rises. The lenders don’t want the same to happen again.


    Why do you think you have a right to buy and not based on creditworthiness? If you need to borrow you need to look like you will pay your lender back. Otherwise the lender ends up with a dosser on benefits who’s not going to pay the mortgage back a bit like my tenant atm with the rent. Then some silly lefties saying that’s fine they don’t have to pay anything. You’d be better spending your time working hard and saving for a deposit than writing stuff like this 👆


    The end user pays every time, sounds like that might be you Jason, ha ha


    Why not stick to the Daily Mirror


    Hahaha - but everybody does have the right to buy a home. They just don’t all have the means. Mortgage companies have a right to decide who they lend to - and credit worthiness is a huge indicator as to whether the borrower will keep up their payments.

    You can resent landlords all you want, but there are many who can’t afford to buy and need to rent. Like it or not, renters need landlords. So if you are a renter, be careful what you wish for because squeezing landlords out means less choice and higher rents.

    As for the big boys - so far they are only interested in the premium end of the market, so good luck with that.

    • B L
    • 31 March 2023 14:04 PM

    On the contrary, the private landlords are not the landlords in Victorian times in terms of
    finance ability. Most landlords have mortgages and lots of expenses to pay, many run loss to keep the business afloat. You will be surprised how many business and income rely on private landlords. All legitimate business should be treated equally fair. All consumers have their choices. What is really wrong is our moral standard in this country is dropping and lack of respect and consideration for others. People pay taxes for their protection of safety and welfare, not for being squeezed. If you want something, you work for it, and you will be rewarded. No such a thing as a charity show.


    Is the Jason Flicker that lives in 311 Main Road Harwich and is a security guard for Wrestling League Ltd - Do you own your house in Harwich Jason? Quick look at the Land Registry will tell us.... I wonder why you are so bitter and twisted??

    Ken Anderson

    Sorry Jason, but you should know your place. Being a landlord is much more than a shrewd investment and an important public service, it is also something that requires a great intellect, something which you lack. Landlords provide one of the most valuable services to society and yet we are the most victimised group in society, demonised by communists like yourself.

    Landlord Lives Matter. Yours doesn't.

    PossessionFriendUK PossessionFriend

    But its not the landlord that will pay, its the end user- customer ( general principles of business. ) Without all the lower cost accommodation [ compared to houses or separate dwellings ] where are all the HMO tenants going to live. ?

    Have you heard about the shortages of housing, such that tenants are out-bidding more than the asking rent to secure rentals in dire lack of supply - much because of views like yours.


    The vast majority of ‘progressive’ and modern European countries rent…from private landlords. Owning is quite a (relatively recent) British thing.


    Be careful what you wish for Jason. It is private landlords the provide competition to the big boys. Why do you think S24 was introduced?? It was to drive up rents and reduce competition to make it more attractive for the BTR companies, two in particular. They have no interest in you, just taking your money.

    As for the council tax on HMOs, before aggregation it is paid by the landlord. After the VOA does its stuff and creates multiple dwellings from one property it is the tenants that pay all those council tax bills. And you think that is a good thing apparently?


    Jason you live in Disney world. The number of tenants I've tried to sell my properties to (discounted from market price) and they simply don't want to know. This government has created an environment of dependency, where lazy people have no ambition to do anything in life. As a property owner, i want more people to buy their own homes, I want them to own, I don't want people aspiring to have a council house for life, I want them to aspire to own their own home. The private rental sector is not there to accommodate tenants for years on end. That has only happened because of this incompetent government and the last. Private tenancies are supposed to be for older people cashing in on their house, young couples trying out their relationship before a long-term committment, students, people divorcing, people trying to live an independent life/saving for a deposit before a long-term mortgage, or simply people out of work in a poor financial situation. There's a multitude of reasons. Don't be so bitter and understand we are not the enemy.

    Finally you think big cooperations are the answer? That's just laughable, these build to let properties which are 2 or 3 times more expensive than my rents, so don't be so deluded. If you're referring to the council, those guys run everything else like garbage including housing which is why all their tenants always ask me to buy them a house to rent. We're just more capable and better at running houses than plebs working for the council. Deal with it pal and try to emulate successful people instead of whinging.

  • icon

    Jason reveals what is the attitude of the pressure groups behind the Rental Reform legislation. Is it any wonder that rental supply is down and rents have increased!

    It is also what is behind licensing.

    The reality is that many landlords have not passed on their increased costs to the tenants in any way. That is extraordinary at the moment - prices have risen in the shops, utility prices have increased, insurance has increased etc.

  • icon

    Jason, my friend I have been coughing up for years.
    You say everyone should have the right to buy their own home.
    They definitely have that Right to buy their own home who’s
    stopping you.
    I had nothing I had to get my own, now as a landlord I am clobbered with taxes to keep those who can’t be bothered.
    Do you want people to just grant you a property.
    So sorry for ever been a landlord to keep the doss.

  • icon

    Regarding C/tax on HMO rooms this is ridiculous.
    It is applied on some Properties in some areas already.
    It adds about £100. pm to the cost of renting a room.
    The landlord can’t pay it without passing it on and the Tenant definitely can’t afford it.
    This is anti-landlord and anti-Tenant, did they say they want Fairer Renting ? this must be it.

  • icon

    He is right, Councils do abuse the PRS landlords, they will regret it when they have milked the golden cow dry and only Big Business landlords with a lot more muscle and legal team advice than private landlords can access, remains

  • icon

    The point is - the consultation ends tonight! Make sure you have your say!

  • icon

    Selective Licensing is another example of Councils using LLs as cash machines. Nottingham's new scheme will raise £25 million over 5 years to run their housing dept. Oh - that's the Council that managed to lose millions on Robin Hood Energy, spend 'housing money' on non housing related things & only just avoided being taken over by Govt Commissars!

  • icon

    Jason is typical example of an extremely naive UK socialist that is driving landlords out of the market.

  • icon

    I've left the renting market completely. Too much taxation and regulation by the non-productive sector of the economy. I've put my capital to better use elsewhere, out of the country.


    Totally agree. All these rule maker are just messing things up for everyone. May I ask where you have invested? I want to invest outside of the UK. Sadly the Tories are not what they once were and Labour are just a sh!t show for scroungers.

  • icon

    Jason.... you have the right to buy just like everyone else.....why don't you get off your lazy a*se and do a bit of graft to save up for your deposit... No?? I thought not. In that case stop spouting off about a subject which you obviously don't have a clue about. 👍

  • icon

    Based on the number of likes Jason has got, I don't think his view is very popular.


    Hehe. It's a bit like the Daily Mail / This is Money going to the Landlord Investment show reported yesterday. The Dept of Levelling Down did a survey of attendees and it looks like 70% of people plan to invest! Well they would wouldn't they being there! Try doing a survey outside Macdonald's to see what's your favourite food. I think burger and chips will be high on the list and salad will be at the bottom....

  • icon

    I have had situations where the council insist I pay for the tenant because i left them on a rolling contract and the handover report upon the tenant leaving was deemed insufficient. Landlord is always wrong and must pay.


    Quote the ‘continue’ clause on your tenancy agreement. That puts a stop to Council hectoring


    I have had this argument with the council. The local authority has no right to determine the tenancy, it is a private arrangement between landlord and tenant, only they have the right to determine when the tenancy ends.

  • icon

    Ah the Flicker group surfaces again ,in the interests of transparency it would be interesting to know the financial connection between the Flicker group and the "big boys'' are the shareholdings and consultancy fees in the name of the Flickers or as I suspect paid via various off shore shell companies
    As a result of discrimination and the other crimes suffered by small to medium landlords I have sold UK properties and replaced them with properties in Europe this has resulted in many of my tenants who have enjoyed their homes at below market rents for in some cases over 25 years being homeless , a significant number of these tenants have very forcibly expressed a desire to meet face to face with groups such as the flicker group in order to have what they describe as "a frank discussion" on their situation given their bold opinions I feel sure that groups such as the flicker group will be happy to facilitate such a meeting as it would unthinkable for them to hide from those they claim to represent
    Caveat this would be a private meeting between tenants and those who claim to represent their interests I accept no responsibility for opinions expressed or actions taken during that meeting


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