Letter: Landlords of Student Lets Should Pay Council Tax

Published on: 13 May, 2016
Updated on: 13 May, 2016

From Bernard Parke

I notice in the national press that villages and towns across the country are trying to ban the sale of new homes as second homes. Although, under the Localism Act of 2011, it was never intended to block such ownership, if this did become possible it would go some way in providing the mythical affordable homes that we so urgently need.

Here in our borough we see many such properties suitable as homes for first time buyers being bought up for renting by speculators. There are now approaching the figure of 1,500 homes in this sector where no council tax is paid at all.

These are mostly all student lets. The cost of such speculation is increasing year on year.

Guildford Park Avenue is a case in point where most of the houses are now little more than student dormitories. Beds are offered on a weekly basis.

In a former council house sector of Guildford Park beds alone are offered at the exorbitant rate of £140 per week. There is of course more that one bed in a room. Further income can be obtained by letting out parking for cars.

If the Council Tax band “D” is assumed as an average, i.e. £1,645 per year, and multiplied by the 1,500 the loss to the local authorities is in the region of £2.5 million per year. This is probably a conservative estimate as the number of such lets are increasing and many houses are above the D band.

Many such properties are a burden on GBC services due to the constant monitoring of rubbish which when carelessly left encourages vermin.

The government is pledged to reduce the revenues support grant placing an even greater burden on Council Tax payers.

We all appreciate that students of all kinds are under a heavy financial burden but to the speculator they are a profitable source of income.

Landlords tend to have many properties and it could be said that the council tax payers are subsiding what is, in reality, a commercial business.

Surely it is not unreasonable for central government to adjust the present legislation and so make these landlords contribute to local authorities costs by paying council tax themselves?

Responses to Letter: Landlords of Student Lets Should Pay Council Tax

Neville Bryan Reply

May 14, 2016 at 8:26 pm

Wishful thinking with this council perhaps, but should we ask the University of Surrey to pay the student HMO fees?

It is likely that landlords would just pass the increase on to the students, and at the end of the day the landlords are responding to a need which should not be there. It is the university which has failed to build the student accommodation – while, incidentally, managing to build a £47 million vet school.

As I’ve said here before, in 2003 our nice University promised to build in effect a student accommodation place for every additional educational place. Yes one for one.

At that time, they had 8,000 students, and around 3,500 accommodation places. Since then they have built less than 1,500 additional rooms/places, while, last I read, they have taken on over 6,000 full time additional students. They have effectively pushed thousands of students off campus, and as a result, turned parts of Guildford into a dormitory town.

Perhaps that was their intention after all it is increasing housing demand which allows them to promote their Blackwell Farm scheme for vast profit.

If the the university had to pick up the cost, perhaps this would change and we residents can have our town back to provide homes for local families.
George Potter Reply

May 14, 2016 at 11:00 pm

I think Bernard Parke is exaggerating. I’ve looked at renting a room in Guildford Park in the past, as a young professional, and I certainly don’t remember any house having more than one bed in one room.

It’s also worth remembering that many people renting rooms in shared houses are people like myself – young people who are working and paying Council Tax but who are unable to afford to rent an entire property.

And let’s not forget that many of the students renting in Guildford Park are students at the ACM, many of whom are aged between 16 and 18 and therefore wouldn’t be liable for Council Tax wherever they live.

I absolutely agree with him that there are far too many unscrupulous landlords making huge amounts of money from poorly maintained accommodation but the reason for this isn’t that students are in Guildford and not liable for paying Council Tax but because there’s been a major lack of housebuilding in Guildford and England, as a whole, for the past forty years.

However, rather than hoping for Council Tax to be levied on these properties as another expense to pass onto tenants who are already short of money, a better solution might be to build more purpose built student accommodation or to make the landlord licensing scheme mandatory and increasing the scope of it.

But none of this will change the fact that Guildford is the home of a university which brings huge amounts of wealth to the local economy and revenue to the council. Part and parcel of having a university is students and the cost of houses they live in. Not paying Council Tax is more than offset by the wider economic benefit they bring.

The real problem is the housing shortage (not that I’m in favour of concreting over the green belt). And, unfortunately, no amount of extra tax on students is going to make that housing shortage go away.

It’s all very well to suggest knee-jerk reactions to certain problems but I personally think it’s better to give a little more thought and then try to tackle the cause of the problem, not the symptom.
Bernard Parke Reply

May 16, 2016 at 8:19 am

Of course, Council Tax would be an unacceptable additional charge if it was levied on students who live here on a temporary basis.

Those permanent residents amongst us on low incomes, and living on state pensions, suffer greatly from this tax which increases each year.

Indeed, this seems to be the policy now adopted by the chancellor.

I was approached by a pensioner who said that he had read relevant comments in The Dragon and he finds that council tax payments account now for nearly half of his state pension.
George Potter Reply

May 16, 2016 at 12:15 pm

It’s worth noting that:

a) Anyone on a low income is entitled to claim Council Tax benefit which would cover its cost;

b) The state pension has risen by a minimum of 2.5 per cent a year over the past five years while Council Tax has risen by a maximum of 2 per cent a year in Surrey.
Bernard Parke Reply

May 16, 2016 at 5:11 pm

Some of these people are too proud to ask for what they believed to be charity.

Council tax has increased by the maximum allowable (without a referendum) two per cent over the last few years. This last year alone it has been increased by four per cent as the rules were relaxed.

How much will it increase next year?

This is present government policy to cut back on the revenue support grant from central government to local authorities to help the chancellor balance his budget.
John Perkins Reply

May 17, 2016 at 9:59 am

It used to be a principle that those who could not afford to do so were not required to pay tax.

With Council Tax almost everybody has to pay regardless of ability. Only those who can prove they cannot afford it are allowed to ask for some of it back.
Peta Malthouse Reply

May 17, 2016 at 2:40 pm

Does Mr Potter know what the State Pension amounts to? £10 pw less than the rent of a room on Guildford Park.

Those of us who paid into a pension with the state for 45 years think this is rather poor return and the 2.5 per cent was offered against a background where year on year, historically, the pension was allowed to dwindle against original value. In other words pensioners are still playing catch up and will do for a long time yet to come.

Aside from that, Guildford Park was once an estate of affordable homes for the people whose families came from Guildford and cleaned our streets hospitals drains and stores. they served in Debenhams and Harvey’s and collected our waste and nursed us at home and in the hospital.

The family homes are now no more as a result of Mrs Thatcher, they are now in the ownership of landlords who have converted 3 bed houses into 6 roomed HMOs for students.

The University of Surrey has always promised to house their students but instead of using their land wisely they are using Manor Farm and now Blackwell Farm, both in the green belt for housing developments to add to their coffers.

Sadly their priorities have never included the promised student accomodation. They have increased the number of courses at the university and attracted a large proportion of students from abroad.

They expect us to pick up the cost however and are not good neighbours to the people of Guildford, in my view.