It really does feel like it is open season on landlords at the moment. What with having to pay to register with national bodies and buy to let loans being so hard to get, we really could be forgiven for feeling a little hard done by.

The latest piece of bad news for landlords comes in the form of news that residential landlords could soon be forced to pay up for any water bills left unpaid by departing tenants.

This seems to have been prompted by the state of the Northumbrian Water Company’s finances this year. A report shows a 10.3 per cent fall in pre-tax profits to £152.7 million for the year to March 31. A lot of this is being blamed on bad debt with John Cuthbert, the managing director of the company, claiming that they are very vulnerable due to laws which prevent them stopping supply of water for non-payment.

I have some sympathy with this idea but fail to understand how that becomes the landlord’s problem. As landlords, we all have our own share of bad debt to deal with. It occurs to me that if a tenant has vacated without paying their water bill there is a better than even chance that they were also behind on their rent.

Why should the landlord’s misery be added to by something that is essentially someone else’s problem?

Citywire, a well respected financial website, this week published an article outlining the difficulties faced by buy to let investors in the present climate. 

They covered a lot of ground that we have discussed before but it is interesting to see the views of people who are not as close to the issue as some of us obviously are. 

The report confirmed the fact that a lot of people had come into the landlord game very reluctantly when they were unable to sell their properties. It also looked at the fact that this quickly led to an oversupply of rental properties and increased void periods for a lot of landlords. It points out that the number of people attempting to get into the property business is falling for the first time in some years and puts that down to bad publicity about the state of  the rental market at the moment, and also the fact that banks have become far more risk adverse. 

The report suggests that banks were willing to turn a blind eye to over-hyped valuation in a less risk adverse recent past but now are increasingly pessimistic when evaluating a properties worth. This is driving a lot of new buyers away. Along with the fact that very few banks now accept less than a 15 percent deposit and some are asking as much as fifty percent on buy to let, the report concludes that the market should be a lot less crowded in the near future. 

This probably sounds like a very good thing to a lot of established landlords.

The Telegraph had an interesting article this week that pulled together a few things that we have been talking about on here for some time. They covered the fact that at the moment banks are very shy of buy to let mortgages and are making it hard for the average landlord to get hold of one. Something we are all too aware of.

They also went over the fact that banks want high deposits and are proving themselves unwilling to loan to people whose monthly income from rent is not far higher than the mortgage they would be taking on, a bit of a double bind for those landlords who are having to drop their prices to attract tenants.

They did, however, set out some steps for landlords to take to make sure their portfolio ‘weathers the storm’ as they put it.

The first is to thoroughly check out the mortgage market before you change any mortgages you may have coming out of date. There will be things out there that suit your particular needs, despite all the doom and gloom around, it is just a matter of careful research.

The next piece of advice regards getting tenants. It is probably not something that landlords want to hear, but, potentially, void periods are far more costly than lowering your rent, so if it comes down to it you may have to bite the bullet and put your prices down a little to attract clients. It is also suggested that perhaps you could approach your local authority for a tenant.

Lastly, The Telegraph expert suggests that you do what you can to offer the best product around. New paint, clean garden, all the things we tend to put off.

This may seem like it is all pretty standard advice but sometimes we can all do with a reminder about the basics.

Further to my blogging yesterday I was interested to come across an article stating the that the popular ITV show ‘Tonight With Trevor McDonald’ is going to be doing a program on why investing in property may be a smarter move than many other kinds of investment available. As part of this they are looking for landlords to give their opinions.

It appears the focus of the program is to be a trend for couples over the age of fifty, those baby boomers approaching fifty, to invest in the buy to let sector as the best way to fund their non working years.

These are not people who are becoming one of the ‘accidental’ landlords we talk about so often but are actually putting a great deal of thought and planning into their purchases. They believe they would prefer to wait out the recession fortified by ownership of bricks and mortar.

If you are looking to the long term there is little doubt that investment in property is still one of your best options. There is no longer a quick buck to be made in the rental market but many are happy to return to it for all the reasons it was traditionally popular. A sense of owning something that will benefit you financially in the long term.

The show is likely to air later in the spring.

I have blogged about it before but it really does look like people with any extra money lying around are starting to choose property as the best way to invest it. Contributing factors to this are, of course, low interest rates and an untrustworthy stocks and shares market.

Many people who used to rely on these methods for investing and growing their money are now being attracted to the property market in quite substantial numbers. Cullen property who are based in Edinburgh seem convinced that this is happening and is likely to be an option chosen by certain types of people, namely those with enough cash to finance a substantial deposit. Managing Director of Cullen, Malcolm Warrack was recently quoted as saying

“Most of the potential investors we have recently spoken to are looking for fairly priced quality properties with ‘loans to value’ of about 50% to 60%.

“We are starting to see sellers accepting realistic offers which offer investors reasonable deals, ensuring rental return and, eventually, capital growth.

He also seems to be of the opinion that the Edinburgh market, at least, may be bottoming out. Making this an ideal time for people in this lucky position to snap up a bargain and have their investment problems solved at the same time.

Let’s hope he is right, that could only be a good thing for the rest of us.

If you think that collecting your rent in a timely manner is harder now than it ever has been, that is hardly surprising. According to a BBC news report last week tenants are further in debt now than they have been any time since the late 80’s.

Things are extremely tough for the general population at the moment, as we know, with unemployment climbing and banks unwilling to lend money to anyone without a pristine credit history and a decent income. It is true to say that anytime tenants are suffering financially the landlord will eventually suffer too.

The report on the BBC contained an interview with a landlord from London who epitomised    just how tough it can get for those who have invested in property when money gets short for tenants. This landlord was owed £9000 by tenants who had recently lost their jobs and fallen behind in their rent payments.

Of course, we all feel for previously good tenants who find themselves unemployed and unable to meet their rent payments, but people need to take into account the devastating effect this can have on landlords.

Government issued housing benefits now often go directly to the tenant. Why can we not return to the old way of it going directly to the landlord, it is designed to pay the clients housing costs after all.

The landlord in the BBC report was so stressed she had had to resort to anti depressants; I am not surprised. People forget that landlords need to pay their bills and put food on the table too.