When you have spent forty plus years working hard to secure a decent retirement fund for you and your spouse, it can come as a real shock to find that your pension is incapable of giving you a comfortable income, and in some cases, barely any income at all. So, given the current economic situation, it is not surprising that more and more people are choosing to invest their extra cash in the rental property market, hoping that when they finally hang up their work boots forever, their smart investment will help them enjoy the little extras in life.

So will your investment portfolio pay for a few round-the-world-cruises, or should you increase your pension contributions instead?

Investing money in rental property might seem like a good idea, but it is important to remember that becoming a landlord is not as simple as you might think. Whereas the money you pay into a pension plan requires very little of your attention on a day-to-day basis, administering rental properties can be a full time job if you have more than one or two.

If you think of property investment as a small business, you would not be too far wrong. There are many rules and regulations to adhere to, not to mention responsibilities to your tenants, so it is a good idea to do your homework before ploughing all your retirement funds into property investment. However, becoming a landlord is an excellent way of bolstering up an existing pension fund and providing you with greater financial freedom as and when you retire.

Condensation is problem we all face over winter. It is cold outside, windows stay closed, and the warm moist air generated from kitchens and bathrooms lingers, eventually condensing on cold windows when the house cools down. Unfortunately, if the condensation is not dealt with, it turns into mould, and before long windows are blighted with green and black fungal growth. Mould can also appear on walls, furniture, and in serious cases of damp, on soft furnishings and carpets in the form of mildew.

How does condensation and mould affect landlords?

Aside from any problems you might have in your own home, mould and mildew are often a big issue in rental properties. Condensation tends to be more common in older properties due to poor ventilation and heating, but it can just as easily be caused by common practices such as drying clothes on radiators and failing to properly vent tumble dryers outside.

Condensation and mould infestations are very difficult to get rid of if they are allowed to spread. Condensation rots timber framed windows from the inside out and can stain UPVc windows. Mould is also a serious health problem if left untreated: fungal spores can cause allergies and asthma, and in severe cases, toxins can form that are life threatening.

As a landlord, it is your duty to take care of building maintenance issues that might be causing mould—for example a leaky roof—but if the problem is down to the tenants drying clothes indoors or not using any extractor fans provided, it is a good idea to warn them they could lose their deposit if condensation and mould growth lead to permanent damage inside the property.

There was much ado in the press yesterday about Shelter’s “5 point plan for tackling rogue landlords” and I read with interest that more than 86,000 tenants had apparently made complaints about their landlords—none of them mine, I hasten to add!

Are a large percentage of landlords really flouting the law and treating their tenants with contempt?

Looking at Shelter’s statistics, it would be easy to assume so, but as any good politician knows, it is very easy to make statistics work for you. 86,000 complaints might sound like an alarming figure and you would be forgiven for thinking that an awful lot of tenants are living in squalid conditions straight out of a Charles Dickens novel, but in actual fact the figure quoted only represents 2% of tenancies in the private rental sector.

Obviously there ARE rogue landlords out there, taking advantage of the current boom in buy to let and failing to meet their obligations to tenants under the law, but the vast majority are law abiding and compliant.

I strongly believe that the buy to let sector needs regulating, but rather than throw out some emotive statistics, it would be better to encourage greater self-regulation amongst landlords and give the courts powers to enforce heftier penalties on those landlords who fail to make improvements in their properties. Many local authorities are more focussed on introducing licensing schemes for private sector landlords, but whilst this is not a bad thing, they need to start working more with the private sector and recognise that responsible landlords provide an ever-increasing percentage of housing for those in need.

In an attempt to prevent another burst housing “bubble”, the chancellor, George Osborne, has announced he will allow the Bank of England to vary the types of mortgages people can have. At the moment, the big lenders are still very wary, and many people are in the unfortunate position of being unable to save up a large enough deposit in order to buy a property, which is affecting everyone—not just those struggling to get on the first rung of the housing ladder.

As most of us probably remember, the situation was all too different a few scant years ago. Banks and building societies were literally throwing money at people and it was not unheard of to be offered mortgages of more than 100% of the property value. But since the property bubble burst and many major banks went to the wall, the housing market has contracted and most lenders now require larger deposits before they will give you a mortgage.

A Financial Policy Committee, whose powers will come into effect at the beginning of next year, will administer the Chancellor’s plan. The committee’s job will be to moderate the economy. Lenders will have the power to make their mortgage products more attractive by lowering the amount of deposits to as little as 5% if/when the market begins to slow down, which will attract first time buyers and property investors, but if the market threatens to heat up too much, lenders can increase the amount of deposit required in order to cool it down.

The weather might be rubbish and the property market bleak, but the buy to let market is booming and landlords are now faced with an even greater array of mortgage products compared to the same time last year. In fact, according to one financial information website, there are approximately one hundred more buy to let mortgage products available to would-be landlords, and thanks to the increasing level of competition in the buy to let marketplace, lenders are being forced to cut their interest rates in order to attract new customers.

This situation is a far cry from when the credit crunch peaked: back then, lenders withdrew many of their buy to let products because the rental market was viewed as “high risk”, which meant that aspiring landlords had very little choice when they wanted to invest or re-mortgage. Thankfully things have improved a great deal since then and lenders are beginning to recognise the potential of the current UK buy to let market, but experts are warning that this may well change over the coming months and lenders are likely to tighten up their lending criteria.

However, for the time being, property investors and landlords are faced with an almost overwhelming choice of mortgage products, both in the high street and from specialist buy to let lenders, and many of the large financial institutions are promising to further increase their percentage of mortgage lending in the buy to let sector. So with ever increasing numbers of people renting as opposed to buying, the future looks bright for buy to let.

The 2012 Olympic Games is only a few short months away and already many investor landlords in London are rubbing their hands together with glee at the thought of all the extra cash they can charge for the few short weeks over the Games period.

Experts are predicting that with an anticipated 7.8 million people expected to visit London for the games there will be a serious accommodation crunch in the capital between June and September. Therefore it is not surprising that thousands of landlords are planning to evict their tenants as they will be able to charge visitors up to fifteen times more than the average weekly rent.

Some landlords and letting agents have already written penalty clauses into new contracts threatening tenants with astronomical rents unless they agree to move out for the allotted period, whereas others are simply planning to evict tenants to make way for temporary tenants willing to pay thousands for a few weeks accommodation.

Are short-term Olympic lets a good idea for landlords?

On the face of it, yes, the prospect of earning as much as £15,000 for a three week let is too good to pass up, but if you take a step back and look at the bigger picture, you might not be quite so convinced. Good tenants are hard to find, so why risk losing a trouble-free tenant who pays on time every month? A temporary tenant is less likely to look after your property and once they have gone, the rental market in London will be swamped with vacant properties and you may end up with a very long void period.

In an attempt to drive up the standards of student properties in the city, Oxford City Council has changed the rules for landlords of smaller HMOs (houses of multiple occupancy). The new licensing scheme for shared houses is the first to be introduced in the UK, and since at least four thousand smaller properties in Oxford are currently let to groups of students, a lot of landlords will be affected by the change.

Each landlord of a small HMO must register his or her property with the council or risk being fined up to £20,000. Upon registration, a council team will then inspect the property to make sure it meets fire, health and safety regulations, and if it does, a HMO license will be issued. Tenants of smaller HMOs will also be given the opportunity to report their landlord if they deem their living conditions to be less than acceptable, and if a landlord is subsequently found to be in breach of the tough new guidelines, they could end up being taken to court and awarded a hefty fine.

Whilst some landlords might not be too pleased at the new scheme, it is definitely a step in the right direction for tenants living in Oxford. Houses of multiple occupancy have long been associated with sub-standard living conditions, which only serves to tarnish the reputation of decent landlords. Hopefully now the days of damp, squalid, and dangerously unsafe properties operated by cowboy landlords will soon be a dim and distant memory because, as one local councillor said, “there is nowhere left to hide…”

According to the BBC news, landlords with properties in Brighton could soon be forced to pay £450 if they choose to let their properties to students. This move is part of the local council’s bid to expand the current Houses in Multiple Occupation (HMO) licensing scheme as a way of controlling noise and litter pollution in student areas of the city and improve the overall level of student accommodation.

Under the current rules, a HMO license only applies to three story dwellings with five or more sharing the living accommodation, but Brighton council wants to expand this to include smaller properties in specific areas of the city. Unsurprisingly, student representatives are not too happy about the proposal. The president of the student union at the University of Sussex thinks local landlords will simply pass on the increased cost to their student tenants and rents will go up, which will force students out of the city in the search for affordable student accommodation.

However, the local council leader, Bill Randall, is adamant that the proposal will benefit the local community and reduce the number of incidents related to students living in the city, although he is quick to point out that not all students are the cause of problems in Brighton.

Personally, I’m not sure how charging landlords of smaller properties for a HMO license will solve noise and litter issues as some students are always going to cause problems, irrespective of where they live. What it WILL do is discourage smaller landlords from letting their properties to students.

There have been a few important changes made recently in the way LHA benefits are paid and, as I have discussed on previous blogs, many landlords with social housing tenants have been experiencing difficulties with rent payments. According to recent research, more than 87% of UK landlords with social housing tenants have had problems with late rent payments, and in some cases no rent payments at all.

Obviously, with the current economic conditions so dire, issues with rent are not restricted to the social housing sector (more than half of all landlords are seeing an increasing number of tenants struggling to pay their rent), but the problems are definitely more pronounced with social housing tenants.

Changes to the way housing benefit payments are being made are obviously having a negative effect on many tenants’ ability to pay their rent; in some cases payments have been reduced and the tenant is being forced to fund the difference. The government also changed the way payments were calculated last year and for many the shortfall between rent payments and housing benefit payments increased.

How is this affecting elderly tenants?

Elderly tenants are amongst the most vulnerable in the private rental sector. Many of them have no additional income and no way of earning extra cash, and if they are relying on income from savings, interest rates have plummeted in recent years, causing diminishing returns in investments. This, coupled with rising fuel and food bills, has led to increasing hardship for the over 60s in social housing. So if you have elderly tenants and they are struggling to pay the rent, it might be a good idea to cut them some slack.

When a tenant moves into a property, landlords have an obligation to inform the utility companies (gas and electric) about their tenant’s identity, so if the tenant subsequently does a moonlight flit leaving unpaid bills behind, the utility company has a record of who they are and is in a good position to trace them. At the moment, however, this is not the case with water companies and there is currently estimated to be around £1.6 billion of water debt caused by absconding tenants. The water companies are becoming increasingly fed up with this state of affairs and the Government’s Environment Minister has now decided to look at ways to tackle the problem in a bid to reduce the water debt.

One suggestion put forward is to make landlords legally responsible for passing on information about tenants to the water company, with the alternative being to adopt a more voluntary approach and hope that landlords do the necessary.

This might seem like a pain if you are a landlord with a high turnover of tenants, but it is in everyone’s interests to try and reduce the water debt left behind by irresponsible tenants. A great deal of debt has been written off thus far, but the water companies have to recoup their losses somehow, and inevitably this leads to price hikes across the board — which affect all of us.

What can landlords do to help?

Always inform the utility companies (including the water company) about a change in tenants at any of your properties and include personal details and a forwarding address if possible.