15:44 PM, 3rd May 2016, About 9 years ago
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Having raised over £500,000 to take West Bromwich Mortgage Company to the Court of Appeal it has been suggested by numerous Property118 members that we should become a Landlords Association.
Sentiment appears to be that a group with courage to take legal action against rogue mortgage lenders and poor decisions made by Government is seriously needed in the UK Private Rented Sector.
Subject to levels of interest this is something that we are willing to consider further.
Towards the bottom of this article you will find an expression of interest form. The ideas we are considering are:-
The growth of Property118 has been tremendous over the last five years as can be seen from the statistics below. This year we are projecting in excess of 5 million page views.
Property118 Growth – 1st Jan 2011 to 31st Dec 2015
Property118 Stats – 1st Jan 2016 to 10th April 2016
Whilst there is no guarantee that we will convert Property118 into a Landlords Association it is something we are seriously considering. A decision on whether to progress will be made based on the responses to this article. Here are some of our thoughts to date ….
The existing Landlord Associations have a track record of being shy of litigation.
Property118 has a track record of raising funds and seeking justice through the Judicial System. Ombudsmen and lobbying have their place but rarely achieve much more than publicity for a particular cause. If we progress this ideas and Property118 Landlords Association is launched we may not always be successful in litigation but we will pick our battles wisely and ensure that in every case the minimum outcome will be far greater awareness of any issues affecting UK landlords which to choose to tackle.
Transparency is key. We are capitalists at heart which means that we believe that success has to be rewarded; for our members, for ourselves and for those who back us financially. We have discussed the possibility of implementing a similar structure to that of Shelter and becoming a registered charity but we do not feel this would be right in terms of our core objective for transparency.
Property118 already owns 26% of the shares in LettingSupermarket.com as well as having revenue sharing agreements with many of our website sponsors. If we were to create a Landlords Association we would do so whole heartedly. In other words, all of the existing business arrangements that Property118 has (which for the avoidance of doubt doesn’t include our private property portfolios) would be incorporated into the Landlords Association.
The founders of Property118 value the goodwill of the current business at £5 million. If we were to incorporate our existing business and transform it into a Landlords Association then we would want our members to own part of it and to be as financially committed to it’s success as we are. To achieve this shares could be sold. This initial share capital would be the foundations upon which Property118 Landlords Association is built and would also provide us with confidence that we are doing the right thing.
If we decide to go ahead our first objective would be to recruit 50,000 paying members within 5 years. This would produce circa £6 million a year of revenue, i.e. £10 per month per member X 50,000 members =£500,000 per month.
To enable members to own a stake we could initially offer 1% of shares via a crowdfunding platform for £50,000. The minimum investment could be just £10. Over-funding could then be considered, e.g. if there is enough interest to raise £500,000 then 10% of the shares could be made available and so on. Whilst such a structure would decrease our personal shareholdings it would also provide funds to facilitate a more rapid growth in terms of membership recruitment.
To provide some assurance to both members and investors that we wouldn’t simply draw all profits from the business ourselves we would be prepared to commit to capping all directors emoluments to the projected 2016 earnings level of £225,000. That would be the maximum that all Directors collectively could take out of the business in terms of salary, bonuses etc. Any additional income for the Directors would then rank on par with that of the shareholders from dividends.
Property118 currently operates on a profit margin of circa 35%. Assuming this figure is maintained and assuming the membership target of 50,000 is achieved then shareholders earnings would be £2.1 million per annum. This equates to gross annual earnings per £10 share of £4.20.
Now some people may say that a 42% ROI based on an initial target of recruiting just 50,000 members from a pool of what is said to be around two million landlords just isn’t right and that the returns are too high. Well that’s capitalism folks. Once this target is achieved the value per share will not be £10 either!
Some will ask, what if Property118 doesn’t grow and what if Mark Alexander were to die, so I will address those points now. I post less than 2% of all comments and articles on Property118, the rest are posted by our members. On that basis, why should Property118 stop growing, are landlords likely to face no challenges in the future? Nobody is irreplaceable or has a monopoly on good ideas. Nothing that has been achieved by Property118 has been achieved by one person alone. It has been the vision and engagement of a growing community of landlords that has brought us to this point. The question for us all now is this; where should we take it from here?
Membership growth is projected to be achieved organically, as has been the case for page views to date. This is because existing members share their interactions with Property118 and their positive experiences with other landlords. Momentum is continuing to accelerate, as can be seen from the stats, and we have every reason to believe this will gain further pace once we have proper funding and infrastructure to campaign and appeal against other injustices against landlords and back our challenges with legal action as neccessary and commercially viable. Furthermore, a broad, growing and solid financial and membership base combined with increasing revenue streams will provide additional opportunities to fund increased PR and brand awareness campaigns. Given that there are believed to be around 2 million landlords in the UK we would like to think the initial objectives we are considering should be realistic. What do you think?
Existing monetisation projects will continue unchanged, save for the fact that all income and profits will accrue to the new company.
We would also apply for EIS relief on shares. This has significant tax benefits – details here >>> https://www.gov.uk/government/publications/the-enterprise-investment-scheme-introduction
I am interested in the following ....
At last – a #landlords‘ union!! EXACTLY what we need! https://t.co/qr7Uvqpyft @IamALandlord @jamesalexandere
— Mandy Thomson (@lodgersite) May 4, 2016
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Big Blue
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Sign Up20:46 PM, 9th May 2016, About 9 years ago
Reply to the comment left by "Mark Alexander" at "09/05/2016 - 19:14":
Why on earth would they post that? That surely can't be the view of the majority there. Are they for real - I really can't understand their thinking or motivation?
Mark Alexander - Founder of Property118
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Sign Up11:23 AM, 10th May 2016, About 9 years ago
Reply to the comment left by "James Fraser" at "09/05/2016 - 20:46":
Me neither James, I was furious when it first came to my attention. Despite several protestations and proof of inaccuracies in his article though, the author remained resolute and refused to change anything.
Sadly it casts a bad shadow on Portsmouth and District Landlords Association who clearly don't intend to appeal to landlords with mortgages.
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AllanW
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Sign Up13:16 PM, 13th May 2016, About 9 years ago
Reply to the comment left by "Mark Alexander" at "10/05/2016 - 11:23":
Hi, I'm pretty gobsmacked at the PDPLA newsletter because I am the PDPLA committee member who had a 15 Minute slot at the May 9th meeting asking them to SUPPORT a fighting fund. I explained that I had personally given funds to the West Brom case, the implications of that case and that the outcome was now awaited. I then explained the impact of the Budget changes and used the calculated examples from Property118. I concluded by asking the members to support the fight regardless of via Property118 or not and I showed them your comments about association apathy.
I also said that if it was via Property118 then the PDPLA should support it properly with a £5000 donation from its ample reserves. - So no direct cost to any members.
The meeting had 50 plus members present, only 10 had previously calculated the cost (afterwards I found out that many still did not understand the changes!). At the vote just 8 members said we should support a fighting fund.
I believe the Newsletter was a way to hit back after a previous 118 comment regarding a different issue. The PDPLA has been running for over 27 years so it does need lots more to change. I will continue to work from within the Association to progress the changes.
Over the last 5 years I have learnt that the vast majority of Landlords just want to keep themselves to themselves and never ever been seen or heard. I can only guess at why!
I think this has shown that before you think anymore about setting up your own association you should think long and hard about what these never seen and never heard landlords actually want?
Allan
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Sign Up17:38 PM, 13th May 2016, About 9 years ago
Reply to the comment left by "allan wadsworth" at "13/05/2016 - 13:16":
Allan,
What a great post. Im really pleased to read it because it's good to see 'inside' the organisations that won't support us.
I am utterly flabbergasted by the PDPLA, whose deeply flawed position has been sent back to them with some more factual evidence. STILL they refuse to recognise our position or change their view.
One has to wonder what on earth is wrong with these people. Do they not understand how it will work? How ruinous it could be for landlord and tenant alike? How several of their own number will either be taxed far more heavily or even put out of business? In what way are they supporting or protecting their membership, and why would they all feel it shouldn't be fought?!
I would also question their veracity as landlords. Any landlord or organisation that breaks ranks with other landlords to call them stupid, overleveraged, get-rich-quick merchants etc, who will get 'what they deserve' ought to be utterly ashamed of themselves and shunned by their members and other landlords. I for one am the very antithesis of a get-rich-quick merchant, so I am baffled by their view of professional landlords who are fighting this, and of the 118 community generally.
What on earth could we have done to upset them so much?
You are dead right about getting landlords to show themselves. The NLA have 21,000 paying members and another 40,000 free associated members. It has been a long-term struggle to improve membership when 2m landlords are known to exist. 1% of landlords are in the biggest association in the UK. 3% have some degree of involvement. That's 99% (or 97%, depending on how you look at it) that are utterly apathetic and of no inclination to learn or benefit from the very organisations there for them! Staggering. No wonder so many landlords haven't got a clue what's coming!!
Mark Alexander - Founder of Property118
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Sign Up18:13 PM, 13th May 2016, About 9 years ago
Reply to the comment left by "allan wadsworth" at "13/05/2016 - 13:16":
Hi Alan
I agree with every word Jamie has said.
Coming back to your point regarding "invisible landlords", have a look at the stats again in the body of this article.
Property118 had 1.8 million UNIQUE visitors in 2015. When you strip out the numbers who visit regularly, the vast majority of of these visitors only read Property118 once a year.
We know that most landlords insure their properties, protect deposits, do gas checks etc. Other than that they prefer to keep their heads down. Now why is that? Human nature perhaps?
Given that our forums are highly prominent in Google search results it is inevitable that all landlords will all find Property118 at some point, usually when they have a problem though. Most don't read every article and even less actually post comments. In fact, only 10,000 people posted comments on Property118 last year. Of those comments, 80% of them were made by 20% of those commenters. It's the old 80/20 rule (the Pareto Principle) in practice.
These "invisable landlords" want to feel safe. That's why they protect their deposits, insure their properties and do gas checks. Why wouldn't they pay £10 a month to an association that gives them the legal protection that Property118 Landlords Association is proposing? Short of making their payments we are unlikely to ever hear from them until they are worried about a legal issue affecting them. To a great extent they will remain invisable, which is their prerogitive of course, but on the other hand Property118 will continue to be increasingly prominent. We will have most key information they need on our website and they will find it when the time is right for them. If the information isn't exactly suited to what they need they will either look elsewhere for it or they will post their questions as a new comment or as a new discussion thread.
Nobody must underestimate the power of these "invisable landlords".
They may well see the likes of Property118 and its core members as being fanatical. I'm cool with that. We will be here for them if/when they need our expertise, as will thousands of others who enjoy helping others by replying to questions, just like me, you and Jamie.
All the best and thanks for your encouraging comments.
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Mark Smith Head of Chambers Cotswold Barristers
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Sign Up18:17 PM, 13th May 2016, About 9 years ago
It was only around 7% of affected mortgagors that funded the WB case. The power that can come from even that proportion is very real.
Mark Alexander - Founder of Property118
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Sign Up18:33 PM, 13th May 2016, About 9 years ago
Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "13/05/2016 - 18:17":
.
That's a very interesting statistic Mark, thank you for sharing it.
Critical mass for Property118 Landlords Association membership is less than 2.5% market penetration and we are giving ourselves 5 years to active that.
Even putting aside the 1 in 5 landlords that will be affected by clause 24, the obvious immediate prospects for membership are:-
13,000 landlords who have a gripe with Bank of Ireland (Bristol & West) who had their tracker rate mortgage margins increased.
Over 100,000 customers of Amber Homeloans (Skipton Building Society) who had their 3.5% interest rate cap removed.
An unknown number of Manchester Building society customers who suffered a similar fate to those customers of West Bromwich mortgage company.
And then of course there are all those who are victims of fraud by abuse of position, e.g. letting agents spending money which they are not entailed to do so including rent belonging to landlords and deposits belonging to tenants.
In addition to that of course there are all those landlords who lose money due to negligence of their professional advisers.
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AllanW
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Sign Up9:46 AM, 15th May 2016, About 9 years ago
Reply to the comment left by "Mark Alexander" at "13/05/2016 - 18:33":
Many thanks for your comments James , Mark and Mark.
Beware of also making assumptions. These Invisible Landlords do care. Mostly about there tenants and there properties. We should be trying to embrace them. For example the PDPLA at my instigation have run free Landlord Shows with presentations etc. I continue this open support by running other landlord meetings to try and help both at the individual landlord level as well as the multiple level. - Keep up the fight. Regards Allan
Mark Alexander - Founder of Property118
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Sign Up10:12 AM, 15th May 2016, About 9 years ago
Reply to the comment left by "allan wadsworth" at "15/05/2016 - 09:46":
Thanks Allan
Absolutely people care, that's why 1.8 million unique visitors came to Property118 last year.
.
Karen Leslie
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Sign Up3:28 AM, 17th May 2016, About 9 years ago
Hi, I'm a newbie. Somewhere on this thread someone asked the question how would the possible new association reach out to new landlords and why would they join?
I'm not sure when P118 started but I left the UK in 2007. I've been a paid member of NLA since 2003 but when I needed help from them it was very vague and general.
I have a flat in Liverpool and a property friend asked if I had heard about Data Protection and Liverpool council because I'm going through the licensing at present. I hadn't. I found the info here and then of course started investigating the rest of the website.
If the association actually goes out and does things landlords will hear about it. Even in regional Australia! 🙂
And yes I would be willing to join an association who stands up for my rights as a landlord. A landlord having rights - there's a novel idea 🙂
About the shares in a possible association..... obviously it's not sure how that would be run but I suggest thinking about how any structure would be administered. If there is a small shareholder with 10 shares at £10 each - they would require the same information / documentation as someone with 1000 shares. People may start small and then build up their share portfolio. The only reason I mention this is that I've been a shareholder in a company with many shareholders and some of them very small amounts and I've heard it can be very difficult (in time and money) to administer.
Now I'm going back to reading some of the rest of the website to find out about other stuff I haven't heard from property associations I'm a member of 🙂