How Corby became the go-to destination for HMO landlords

An investigation by the Northants Telegraph has revealed why our town has proved irresistible for property investors

Tuesday, 13th July 2021, 7:54 am
Rossetti Road on the Hazel Leys estate has two registered HMOs. The estate is the most HMO saturated in Corby.

"Why would we not want to live here? Corby's a good place to live. We have work here, we have a community and we have made a life here."

Lukas, from Lithuania and Aleks from Poland have been in the town for six years, living in HMOs on the Kingswood estate. They're just two of thousands of European migrants who've made our town their home during the past decade. They enjoy being part of the strong community that's grown here and have both been promoted to supervisory level in the places they work.

"HMOs are good and bad here," says Lukas. "You have to pay if you want a nice place. I would like my own house but I can't afford it yet. So this is me for now."

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Landseer Court in Corby has six registered HMOs and residents say they have had issues with parking and people partying late into the night.

Ten years ago, property in Corby was still available at bargain basement prices. An average three-bed semi would set you back £125,000.

Within a few years, acquisitive landlords had begun to realise there was money to be made by buying a house, spending some money converting it, and renting out the bedrooms individually to for a decent return.

The explosion of the town's logistics industry, improved rail links to London and the increased free movement from parts of Eastern Europe meant that there was a lack of accommodation for single, low-waged people who wanted to work in Corby.

Houses of multiple occupation (HMOs) began to spring up across the area. The Hazel Leys estate, which enjoyed a good stock of affordable family homes and a prime location next to the town centre, took the lion's share.

Paul Palmer is a Corby-based landlord who has worked as an empty homes officer in the town and appeared on the BBC show Britain's Empty Homes.

Now, the average semi-detached house price in the town is nearly £200,000, there are 263 registered HMOS in Corby, and an unknown number of unregistered HMOs. That's compared to just 60 in Wellingborough, 87 in Kettering, 15 in Rushden and one in Oundle.

From Beanfield Avenue to Willow Brook Road, and from Todmorden Close to Eastbourne Avenue, 141 streets in Corby now have an HMO. And that's just the licenced ones.

HMOs only need a licence if there are more than five people from two separate families living in them. Hundreds of smaller HMOs which do not need to be registered are dotted around the town. At the last estimate, there were 500 such homes in Corby.

Every estate now has HMOs. The highest densities in Corby are where houses are cheapest: on the Kingswood estate where both Dorking Walk and Blenheim Walk have six, and on the Hazel Leys estate where there are seven in both Llewellyn Walk and Constable Road and six in Landseer Court. The Exeter estate also has plenty, with four in Buckfast Square and three each in Croyde Avenue and Exmouth Avenue.

So who owns our HMOs?

Our analysis showed the majority of the most prolific owners appeared to come from towns and cities outside of Corby.

Publicly-available documents show Bedford-based property developer Ian Kavanagh owns ten registered HMOs in Corby while Anthony Dand from Rugby has eleven. Leon and Erika Swierczewski, based in Essex, own ten between them.

Toby Spanier's Kent Capital Partners, based in Reading, has ten registered HMOs in Corby and Rutland-run Eastern Rose owns six.

Caldecott-based James White-Hughes runs thirteen registered HMOs.

Corby-born European 110m hurdles Champion William Sharman, who grew up on the Exeter estate, owns eight.

Several tenants told our reporters that these professional landlords running legitimate businesses, who have a bigger stake in the town, usually provide the best living conditions and most secure tenancies, making rooms in their houses sought-after.

There are a total of 125 HMO landlords registered with North Northants Council operating in the Corby area.

But how do some investors end up buying in Corby?

Paul Palmer has worked to bring more than 1,000 empty homes back into use during the past 28 years. He spent several years helping Corby Council get the number of empty homes in the borough to its lowest ever level. He's most recently worked as a landlord in Corby aiming to help vulnerable and homeless people back into safe and secure accommodation with the ultimate aim of providing affordable rooms that come with care packages for those who need them.

He told the Northants Telegraph that in recent years investors from the capital were being actively encouraged to buy HMOs in Corby. A now-defunct property investment training company had marketed the town to wannabe London landlords for several years, promising to find them reasonably-priced property and an introduction to local management companies - for a fee running into many thousands.

"If you're living in a leafy suburb then you might want to buy another property and you go to this company and you go along to a few courses and they tell you what to do," said Paul.

"Corby is one of the towns where they recommend that you buy a place. They take you to look at a few properties that are already on the market, introduce you to local letting agent and a builder who will manage it all for you, and then they charge a finder's fee.

"You've got a woodchip HMO - brown carpets, plain walls etc - and you can charge £80-£100 per room per week.

"This is how you do it. This is how they arrive in Corby.

"I spoke to one landlord who was charged £20,000 for a finder's fee.

"It would be wrong to say all HMO landlords in Corby are bad. Most of them are not.

“Before the pandemic there was a group of landlords who were setting a little group up to work out how they could put something back into Corby and invest in the area. Many of them do have a social conscience.

"There's still a need for this type of home in Corby but I want to do it with a social side. Lots of people who need these rooms also have vulnerabilities and need care to help them get by so I want to ensure there's support in place, for addiction or just someone who can make sure they've taken medication or appointments or whatever they need.

"During the pandemic we managed to house all the homeless people in Corby. It just goes to show what you can do."

What's the problem?

HMOs in themselves aren't a problem. They provide affordable housing for people who might not otherwise be able to be able to live here and the majority of landlords care about their tenants and respond to the concerns of local people.

There's no denying that the purchase of former family homes, often originally built as social housing, pushes prices up for local people wanting to get their foot on the property ladder. But the biggest effect is on the private rental market.

According to a House of Commons briefing paper in May, between the censuses of 1991 and 2011, the number of people in Corby renting from a local authority dropped by 33 per cent. The social housing stock in Corby hovers around 6,000, despite a big push on building by Corby Council during the past few years.

There were 1,365 applicants on the borough's council house waiting list at the end of 2020. Research in October last year showed the borough of Corby had the fewest empty homes in the country - with just 135 vacant homes, or 0.45 per cent of all properties. All of this means pressure on housing, and that private rental has to take up the slack.

The Office For National Statistics says the median average monthly rental for a three-bed home in Corby is £750 - £5 more per month than in neighbouring Rutland where wages are statistically much higher. But if a private landlord converts the living room to make that house a four-bed HMO, they can rent it out for £400 per week, or more than £1,600 per month. It doesn't take a genius to work out which makes more financial sense.

When six or seven HMOs spring up on a single street, their density can become a problem for residents.

If each resident has a car and there's only one driveway, other residents can struggle to park, and there's no issue that ignites community tensions like a parking row.

Many HMO residents are shift workers who keep different hours to families. A barbecue and a few drinks in the garden before you start your shift at 10pm might not seem like a big deal to you and your housemates, but it might be a nightmare for the family with young children living next door.

Many responsible landlords provide commercial waste bins for residents of the bigger houses, but the unsightly red bins regularly block paths in some areas of the town and are abused by other residents who see them as fair game for their own rubbish.

James Cuff lives in a quiet cul-de-sac on the Hazel Leys estate. He takes great pride in his immaculate home and has spent money upgrading it to ensure he can enjoy living there in his retirement.

But in 2019 a home in his street was bought by a landlord from London who told him it would become a family home for a couple and their adult son. Soon afterwards, around eight adults moved in.

Corby Council told him they had checked the house and found it to be compliant but when James tracked down the landlord, horrified, he came up to Corby to check the house and evicted the illegal sub-letters.

"They'd put wooden frames in the rooms and attached curtain material to it to make little cubicles," said James.

Then in Spring last year, another HMO began operating in a former family home which borders his property. He contacted the council who told the owner to apply for a licence. Then rubbish began to accumulate and the garden grew out of control.

"I've had to put a fence up at my own cost," he said. "Myself and my wife, both in our 60's and with health problems and living on £600 a month benefit, were forced to scrape together the money to pay for security fencing to safeguard our property.

"I've contacted the council on numerous occasions to ask them to do something about the fence, which belongs to the landlord, but they say it's a civil matter.

"There was so much rubbish piled up at the front of the garden and when they told them to move it they just pulled it all round to the back.

"They're charging £563 per room per month. There's a shower off the kitchen and one of the bedrooms doesn't even have a window, just an external door. They have to prop it open at night in the summer. I feel for them. It's not safe. Anyone could walk in. But it’s legal.

"It's advertised as double rooms with off-road parking yet there's only room for one car in the drive. There's cars parked all over the grass verges. I've contacted the police about it but we haven't got anywhere.”

He wants the local authority to adopt stricter controls on its HMOs and to force landlords to advertise any change of use well in advance, as is the law in Scotland. He's also joined the growing calls for an Article Four Direction in the town, a campaign supported by the Northants Telegraph.

What can the council do to curb the growth in HMOs?

There are already strict rules around HMOs in Corby. Any house being converted from a family home to a HMO for more than six people needs planning permission for change of use. Any house smaller than this doesn't need planning permission, which is why so many smaller HMOs are able to slip through the net unnoticed.

Any HMO with five or more people in two or more family groups also needs an HMO licence.

North Northamptonshire Council charges £1,240 for each new licence application, and the same again every five years for a renewal. Those with a licence have to adhere to strict conditions or risk having their licence removed. These conditions include being a 'fit and proper person'.

HMO landlords must also keep the property in a good state of repair including not allowing rubbish to accumulate. They must also provide contact details for neighbours and take steps to mitigate nuisance caused by their tenants to people living close by.

The overwhelming majority of landlords adhere to these rules and ensure their tenants respect their home and their neighbours. After all, it’s in their interests to have respectable, well-behaved tenants living in their properties.

Back in 2019, officers asked Corby councillors to ratify rules that would give them greater enforcement powers and allow them to fine rogue landlords up to £30,000 for breaking the rules.

But smaller HMOs don’t have to have planning permission and can legally go unnoticed until they cause issues for local people.

It would force all landlords of any new HMOs with more than three people living in them to apply for planning permission and place the power to decide back in the hands of our local councillors.

In March last year, under mounting pressure on housing stock, Northampton Borough Council issued a similar directive covering the entire borough. Barnsley Council announced curtails on HMOs when numbers reached 140 in the town, which has a population of 275,000.

Other councils around the country have followed suit when the number of HMOs starts to become unmanageable for local residents.

Lukas, who we met earlier on the Kingswood estate, and who is planning to stay in Corby long term to raise a family here,says: "I think it's a good idea. Some of my friends are living in bad conditions and maybe the council can have more control over what's going on.

"This is a good town, a good place to live. We all want to make it better."