If you own any properties in an area at risk of flooding, you could be facing the prospect of being unable to find insurance cover on them fairly soon. Thanks to the Government’s “statement of principles” the insurance industry is being forced to insure properties in high-risk flood areas until June 30th 2013. This will inevitably cost them a great deal of money in insurance claims since around 25% of properties in the UK have been built in high-risk flood areas. Consequently, insurance companies are now frantically trying to get rid of any flood risk properties on their books in order to minimise the potential costs involved.

How will this affect you?

Should you own a property on a flood plain, or one that has previously been affected by flooding, you could find yourself facing an astronomical renewal premium on your buildings insurance. Some property owners have reported that their insurance company has offered to renew the buildings insurance, but only if they are willing to accept an insurance excess of £20,000. Others have been unable to find an insurance company willing to insure them at all.

What happens if I can’t get insurance on my properties?

Without insurance, you risk being in breach of any mortgage on the property and if you want to sell at a later date, the overall value of the property is likely to be considerably reduced.

So always check whether a property is a known flood risk before you buy, and if it is, walk away!

According to a recent survey carried out across UK landlords, those who accepted tenants in receipt of housing benefit were struggling to collect regular rent payments and nearly 90% of those surveyed reported serious issues with late or non-existent rent payments in the last year.

Why is this happening?

The government recently changed the housing benefit rules to give tenants more freedom over how they receive their benefits payments. Housing benefit used to be paid directly to landlords, but tenants are now entitled to have their money paid directly into their own accounts, which puts the onus on them to pass the money on in the form of rent. Clearly this is not happening in the majority of cases and landlords are struggling to deal with late payments or tenants who simply do not want to pay their rent at all.

And to make matters worse, the local authority will not pay housing benefit payments directly to a landlord until the tenant is at least eight weeks into arrears—which is not much use if the rental payment is intended to cover a mortgage!

How can you prevent this from happening to you?

If you choose to accept tenants in receipt of housing benefit (and around half of those surveyed said they preferred not to rent their properties to tenants on benefits), it is worth insisting on a larger deposit up front to reduce the risk of rent arrears. Alternatively, ensure the tenant has a guarantor in place in case they decide not to pay the rent at some point in the future.

The number of landlords looking to invest in buy to let properties is set to rise again this year, which means there is increasing pressure on the existing housing stock in the UK. Consequently it is much harder to find attractive properties in good condition at the right price, so more and more landlords are being forced to consider older properties that require work before they are suitable for letting.

Should you be wary of older properties?

It is very easy to be seduced by a cheaper older property. Years of DIY property development programmes have convinced lots of us that doing up an older house is a fast track way to make a fortune, but unless you have the knowledge and available funds to fix the potential problems you might encounter, you could find yourself seriously out of pocket with a house that needs so much work it is likely to be uninhabitable for months.

The RICS has recently issued a warning to landlords about the potential dangers in investing in older properties. Issues such as dry rot, fractured support beams, subsidence, rising damp, and a host of other problems common in older properties can cost tens of thousands of pounds to put right—and that’s before you have even thought about adding a modern new kitchen or bathroom!

Personally I love older properties—they have a lot more character than a modern estate house—but if you are considering investing in an older house in need of modernisation, make sure you pay out for a buildings survey before you buy. It will cost you money up front, but it could save you thousands in the long run.

We all know the importance of a thorough inventory but, according to the Association of Independent Inventory Clerks, many landlords are submitting inventories at deposit scheme adjudications that are next to useless, which inevitably leads to them losing their case—and the deposit.

So what makes a good inventory?

Photographic and video evidence is simply not enough. You must include a detailed written report alongside photographs and/or video evidence of the condition of the property, before and after the tenancy. It is also useful to keep copies of invoices deducted from the deposit for cleaning contractors, gardening contractors, and any other tradesmen you employed to restore the property back to its original condition.

What else should landlords do?

An inventory should be signed and dated by the tenant when they check-in to the property, although an undated inventory might still be accepted by the adjudicator if there is evidence to show the tenant was given a copy when they checked in to the property. The inventory can then be used at check-out to establish an accurate snapshot of the property condition. If you or your letting agent fail to do a thorough check-in and check-out, you will not have a leg to stand on if your tenant decides to take you to court in an attempt to get their full deposit back.

How can new landlords ensure they have an adequate inventory?

If you are a new landlord, it is probably a good idea to have your inventory compiled by a professional inventory clerk, which is what the tenant deposit schemes recommend.

So far this winter we have been very lucky with the weather—apart from some gale force winds. The average temperature has been fairly mild and we have had very few frosty mornings as a result, but judging by the weather forecast today, we are in for a cold spell within the next few days, so before you end up cleaning up the after effects of cold-related damage, think about taking some simple steps to protect your properties from the cold weather.

Plumbing is a major disaster area when the mercury falls. Inadequately insulated pipes freeze up and then burst once the temperature rises. The end result of this state of affairs is usually a flood, which can cause thousands of pounds worth of damage and leave a property uninhabitable for months. The best way to prevent a burst pipe is to ensure any vulnerable sections of pipe have plenty of insulation on them, but if the property is vacant for any length of time, it is a good idea to leave the heating on, albeit set to a lower temperature than normal. This will help to prevent any burst pipes indoors.

If the worst DOES happen and you are faced with a flood in one of your properties, contact your insurers and try to organise remedial repairs as soon as possible. The longer you dither over sorting the problem out, the more long term damage will occur—wet carpets can be dried out, but if they are left untreated for too long, they will go mouldy and rot the floorboards beneath.

On the face of it, 2012 looks like it could be another bumper year for buy to let landlords, whether you have been in the property game for many years, or you are just about to buy your first investment property. But although the rental market is definitely increasing as more and more people decide to rent rather than buy, it is worth remembering that the current difficult economic conditions could have a number of knock-on effects as time goes on.

The credit crunch is affecting all of us. The cost of living is increasing almost daily, but even more significantly, the level of unemployment nationwide is also increasing. Jobs are no longer safe, and of course this will inevitably have a negative effect on the buy to let market.

Despite the general feeling that buy to let investment is a fantastic opportunity in the current market, there is also some suggestion amongst a few experts in the industry that the struggling UK economy will eventually lead to a rise in rent arrears caused by rising unemployment, evictions, and a fall in the average rent across the board, and since rental income services buy to let mortgages, landlords might end up in arrears themselves if they are unable to meet their monthly repayment on the loan.

Recent figures indicate that rent arrears were up by 20% at the end of 2011 and rental payments are becoming more expensive than mortgage payments, so keep a close eye on the fluctuating market conditions in the buy to let market as the outlook might not be so rosy in the long term.

According to experts in the property rental industry, the demand for student accommodation continues to outstrip supply across the board and many savvy property investors are taking advantage of this state of affairs by snapping up properties in the student sector.

The latest figures indicate that the amount invested in student accommodation has risen by 220% in the last twelve months, which equates to around £860 million. This suggests that more and more landlords are realising the potential diversifying their property portfolios and buying properties suitable for student accommodation.

Somewhat surprisingly, many of these new investors are from overseas. These investors see the UK student property market as a relatively safe investment with a good rental yield.

Is student accommodation a good buy for landlords?

Student occupancy is currently around 99% across the UK. Demand is incredibly high and looks likely to remain so, so investing in accommodation for students is an excellent way for UK landlords to expand their portfolios. The market is very much driven by supply and demand and with the numbers of students on the rise your investment is likely to be safe for the next few years at least.

What types of properties are suitable for student accommodation?

Long gone are the days of derelict older properties that were riddled with damp and infestations, but marketed at students nevertheless. Modern students expect far higher quality accommodation and are prepared to pay extra for it, and a growing number of wealthy overseas and mature students means you can invest in a better class of property and still market it at the student sector.

Are you aware of the new financial penalties facing landlords if they fail to place their tenant’s deposits in an approved scheme within thirty days of receipt of the money?

As of the first of April this year, the new Localism Act instigated by the government to protect tenant’s rights comes into effect. One of its requirements is that money handed over to a landlords or letting agents as a deposit on a rental property, must be placed in a protection scheme in order to safeguard the rights of both tenants and landlords should there be any tenancy disputes at a later date.

Once the money has been deposited, the landlord is required to pass on information to the tenant about the Tenancy Deposit Scheme (TDS) within the thirty-day period. This information includes a leaflet and a deposit protection certificate, plus confirmation that the deposit has been registered on the TDS database.

Should the landlord fail to place the money in the Tenancy Deposit Scheme within the thirty-day period, the tenant has the right to make a claim for up to four times the original amount of their deposit. They can do this as soon as the thirty-day period has expired, even if the landlord is one day late or the tenancy has ended, although the courts will take these factors into account if a case is brought before them.

With such severe financial penalties at stake, it is essential that landlords and letting agents comply with the rules, or they may face numerous claims from savvy tenants.

As the rental market continues to grow, there is some concern that unregulated letting agents are ripping tenants off with variable fees and significant up-front charges. Because of this, many experts are calling for the government to force letting agents to adhere to the same standards estate agents are subject to.

Research has shown that fees charged by letting agencies vary enormously across the country and tenants are often completely unaware of what charges they are incurring before they sign a rental agreement. Of the twenty-five letting agents surveyed, only two openly displayed their fee structure on their website, and in most cases, tenants were left completely in the dark until it was too late.

With an increasing number of families forced to move into the private rental sector, this kind of behaviour could leave many households financially disadvantaged—a lot of tenants are being forced to find a deposit for a new property before they are handed their old one back. If letting agents were regulated in the same way as estate agents, some of the more unscrupulous practices could be outlawed. Charges also need to be more transparent so that tenants know exactly what they paying right from the start. It should also be made easier to transfer deposits between landlords.

With increasing numbers of tenants seeking rental properties, the market is incredibly buoyant, but unfair practices harm everyone, especially vulnerable tenants, and as a landlord, I am strongly in favour of anything that helps to keep the rental market fair.

According to a new report, one in three tenants living in private rented accommodation is struggling to find the money to pay the rent. The figures are slightly less for those living in social housing but, nevertheless, around 29 % are still having problems making their monthly payments. Of course this is hardly surprising when you consider the cost of living these days, and no doubt even more tenants will be struggling to pay their rent as Christmas loomed.

So on a lighter note, what excuses have you been given by tenants who have failed to make their monthly rent payments? Some of the outrageous excuses I read this morning made me laugh out loud: see if any of them strike a chord with you…

 “I can’t pay my rent as my BMW is in the shop, and I cannot afford to pay for both.”

 “I had my choice of paying the rent or buying a car. I bought a car. I knew you would understand.”

 “I don’t want to pay the rent because the house is haunted.”

And on a related note, here is another amusing story I heard the other day… A local landlord was unfortunate enough to have a tenant who decided to do a moonlight flit rather than pay the three months outstanding rent he owed. But unlike the average tenant who moves out in the dead of night and leaves a huge mess behind, this guy decided to clean the house from top to bottom and had all the carpets professionally cleaned first!