One bumbling council in the South West has managed to lose track of exactly how many HMOs it has in several towns within its jurisdiction. Unfortunately, without an accurate list of HMO properties, it can’t be certain that some landlords are paying the requisite licence fee.

Under the rules of HMO licencing, a landlord with a shared rental property housing six or more tenants over at least three floors must apply for a special HMO licence. These types of properties typically provide accommodation to students, young professionals, and single people, and are sub-divided into small bedsits with shared kitchen and bathroom facilities. An HMO licence helps local authorities keep track of such properties and allows them to check on the living standards to make sure they are safe for tenants.

At the moment, the council “thinks” there are at least eighty-three houses where three or more tenants share the accommodation, but it isn’t completely sure. Unsurprisingly councillors would like to gain a clearer picture of the current situation in order to ensure the correct licence fees are being paid and vulnerable tenants are not living in slums. So to this end, they are urging landlords to step forward and apply for an HMO licence if they haven’t already done so. And in the event that some landlords don’t manage to do this, local residents are encouraged to report any properties they suspect are housing multiple tenants.

The council does point out, however, that: “HMO licensing is there to protect the tenants and assist the landlords if or when help is required.”

In its attempt to regulate the private letting industry and protect tenants from poor and potentially unsafe living conditions, landlords in some areas of the UK are now required to register their HMOs, and any landlord who fails to register a property being used as an HMO faces a large fine and a possible letting ban.

However, there has been an unexpected side effect of giving Local Authorities “Article 4” powers. Instead of paying for an expensive HMO licence, landlords are apparently deciding that the more sensible way forward is to convert their larger properties back to single-family occupancy rather than keep them as shared lets, which means some existing tenants already living in HMOs are being given their notice to quit.

Local residents are also finding that property prices are falling in areas affected by the Article 4 changes as fewer landlords are choosing to invest in property in the area. So despite having spent years campaigning for better controls on larger buy to let properties, local residents in popular university towns and cities are now unable to sell their large family properties because landlords aren’t buying any more.

One MP from Leeds is hoping to try and persuade the government to step in and kick-start the local housing market by purchasing HMOs for use as social housing. Whether he gains enough support from other councillors and local residents remains to be seen.

So if you’re a landlord with HMOs in areas affected by the Article 4 changes, are you pulling out of the HMO market? Let us know in the comments!

As any responsible landlord knows, it is vital to have gas checked at least once per year to ensure they are safe and free from potentially hazardous faults that could endanger the life of the tenants living in the property. But, sadly, not all landlords consider such matters to be important and fail to carry out standard safety checks.

In a case described as “shocking” by the local HSE inspector, two landlords in Sheffield have recently been found guilty of endangering the life of their tenant and handed suspended jail sentences by Sheffield Magistrates Court.

Fortuitously, a housing officer from the council came to inspect the property and was concerned enough about the appliances to arrange for a Gas Safe inspector to come and check them out. Every single gas appliance in the property (two gas fires, a gas cooker, and a central heating boiler) was found to be rife with defects and decommissioned immediately. There was also evidence of carbon monoxide gas in the property, which as we all know, it a silent killer.

Failing to have gas appliances regularly checked and serviced is in breach of the law, but much important than that, these requirements are put in place to protect tenants’ lives. It might be tempting to put off calling out a Corgi registered gas engineer, especially if cash flow is a bit tight, but remember your legal obligations and don’t play Russian Roulette with your tenant’s life. If you do, you could end up with a large fine, a suspended prison sentence, or a death on your conscience.

More good news for landlords this week—according to figures published by a leading lender, rising rents are leading to increased buy to let yields across the whole of the UK. So although house prices are still in a never-ending freefall thanks to the grim state of the Eurozone and a double dip recession, the average gross rental yield for UK landlords has risen from 6% to 6.2% in the last twelve months.

Of course the main reason why landlords are enjoying an increase in their average rent yield is because rents keep rising in line with the surging demand for rental property across most of the UK. In June last year, the average monthly rent was £697 whereas figures for June 2012 show the average monthly rent is now £734, although tenants in London are paying on average £1,287 per month.

Are there variations in rental yields across the UK?

Rent yields are closely linked to property prices: the average monthly rent in London may well be very high, but because property prices are correspondingly high, too, rental yields are the lowest at only 4.8%. Landlords in the north of England, on the other hand, are considerable better off: here rent yields are at their highest (on average around 7%) thanks to much lower property prices.

If you are looking to invest in buy to let, Yorkshire and the Humber can offer good returns on your investment whereas London, the South East, South West and East Anglia offer a smaller return. However, rental yields are only one part of the bigger picture—landlords should always take into account the length of time a property is likely to remain vacant over a twelve month period as this will significantly impact on profit margins.

Experts in the private rental sector fear that the recent controversial decision by Newham Council in London to introduce a blanket initiative forcing all landlords operating in the private sector to sign up for a license, could have far wider ramifications for all UK landlords.

The Newham licensing scheme has been brought in to try and weed out rogue landlords operating in the borough. Newham landlords now have to apply for a license to operate, and if they fail to do so, they can be fined a maximum of £20,000.

On the face of it, it seems like good idea: once they apply for a license to operate, landlords will have to submit to an inspection of their properties to ensure they are up the specified standard. However, the level of bureaucracy required to administer many thousands of private rental properties is likely to become a major headache, and many potential landlords are probably going to be put off the venture altogether.

Unfortunately it may take a while before the negative fallout of the Newham scheme makes itself fully known and many landlords are concerned (quite rightly so) that other Local Authorities will take up the Newham licensing scheme before they realise what the potential problems are. So instead of helping to ease the problems caused by a small minority of so-called ‘bad landlords’, the number of available properties in the private sector will probably fall and some of the most vulnerable families in the country left homeless as a result.

There are many pluses to concentrating on the student sector for your buy to let property business, not least of which is the steady stream of rental income—students often pay up to a year in advance for their lets. But recent research has indicated that many students are struggling to pay their rents and the incidence of rent arrears amongst student tenants increased during the previous academic year.

On average, according to figures published by Mydeposits, students took around eighteen days to settle their rent arrears, which in the grand scheme of things is not too bad. In many cases, this was probably down to poor money management: What student wants to spend their money on boring stuff like the rent when they could be blowing it all on beer down the student union bar?

However, the government is planning to introduce further increases to tuition fees this autumn and many students who are already living on the poverty line will find it even more difficult to pay their rents, which is a concern for many landlords in the student sector. But despite this, most landlords questioned in the survey remain optimistic about the student lettings market and see no reason to change their buy to let business strategies.

How can landlords avoid student rent arrears?

The best way to avoid rent issues is to manage your tenancies correctly from the very beginning and ensure you are always contactable if one of your student tenants has any problems paying as this will help to avoid a small problem snowballing into an insurmountable one over time.

Social housing landlords in Scotland are going to find it a lot more difficult to evict a tenant who fails to pay their rent from now on. Recent changes made to the 2010 Housing Scotland Act are designed to counteract the effects of the current financial difficulties faced by millions of low-income families, by reducing the number of tenant evictions for rent payment arrears.

Shelter, a leading housing charity in Scotland, has welcomed the move as it is seeing increasing numbers of poorer families struggling to pay their rent, which in the worst cases leads to the family being evicted from their home. The changes to the Housing Act now mean that tenants living in social housing, whether Local Authority owned or in the private sector, will be afforded the same protection as homeowners.

How does this affect social housing landlords in Scotland?

Social housing landlords will now have to meet a number of pre-eviction requirements before being granted a court eviction order to remove any tenant who has not paid their rent. Landlords will have to show that they have tried to help the tenant: for example by offering a reduced repayment plan for any outstanding rent. Landlords will also be obliged to offer helpful advice on such topics as Housing Benefit.

Can problem tenants still be evicted for non-payment of rent?

Yes, any tenant who wilfully refuses to pay their rent can still be removed via a court eviction notice. However, ‘bad tenants’ are generally few and far between and in most cases the problem is caused by a lack of money rather than a strong desire not to pay up.

In years gone by, retirement was viewed as a positive life change; something to look forward to. Most people had spent many years as a loyal employee, paying into a healthy retirement pot. But the economic recession has put paid to such an idyllic retirement for many of us and the average pension plan is not performing anywhere near as well as you might once have expected, which is why increasing numbers of pensioners are turning to the buy to let market as a way of boosting their income.

According to recent research, there has been a steep rise in the number of retirees downsizing their living arrangements. Pensioners are typically moving into smaller accommodation to save money on bills and other living costs, whilst holding on the family home and letting it out as a source of regular income.

Clearly this makes good financial sense in today’s stagnant property market. Instead of losing money by selling the family pile at a woeful knockdown price, you can keep it in the family to provide an additional source of regular income. Experts call this type of landlord an “accidental landlord” as it describes someone who did not set out to make money by investing in buy to let; rather they chose to follow that road because it made good sense at the time. But with the buy to let industry going from strength to strength, many pensioners are finding that letting out a property is a great way of supplementing a dismal retirement fund.

Adhering to current fire safety legislation is essential for landlords. No landlord wants to find themselves responsible for the death of one of their tenants if a fire breaks out and the tenant is unable to escape the smoke and flames because the building breaches fire regulations.

Sadly many landlords continue to put profit above the wellbeing of their tenants and despite warnings, they ignore fire safety law. Landlords operating HMOs are often the worst offenders because they can make more money from hapless tenants when conversions are done on the cheap.

One such landlord has recently been ordered to pay a massive £40k in fines and court costs and handed a suspended jail sentence for flouting fire safety regulations in a property he had converted for student lets. If he can’t or won’t pay, he will end up serving a minimum of 6 months in jail.

The building was converted into a HMO, but although the architect warned the developer he was in breach of fire safety legislation, he ignored the advice. He also ignored a ban on letting the rooms out following a fire safety inspection by local fire officers.

The judge overseeing the case took the matter very seriously and told the landlord developer he had put profits above the safety of the students living in the accommodation: “You knowingly allowed occupation when fire safety standards were inadequate and that it was financially motivated,” he said.

The local Fire and Rescue Service also took a dim view of the offence: “The sentences reflect the seriousness with which such a flagrant breach of fire safety legislation is viewed.”

In a bid to buoy up a very stagnant housing market, many of the big high street lenders are currently offering some excellent mortgage deals. Sadly a glut of cut price mortgage deals are unlikely to be helpful to all those first time buyers unable to save up for a hefty deposit, but it is great news for savvy buyers looking to invest in the buy to let market. But although it is a great time to consider investing in rental property or increasing an existing portfolio, landlords should be careful not to rush out and invest in a property without considering the potential problems involved.

A buy to let property should always be thought of as a long-term investment. House prices go up and down (mostly down at the moment), so if you hope to make a quick profit by buying a property, letting it out for a year and then selling it on, you are likely to be sadly disappointed. You are far more likely to see a decent return on your initial investment if you are able to hold on to the property for at least five years.

Demand for buy to let properties may be high, but rent arrears are also significantly higher than in previous years thanks to challenging economic conditions in the UK. Therefore even though a buy to let property can bring in a reasonable income, it is important to realise that if you pick the wrong area to invest in or the capital value of your property falls by a large margin, the value of your investment could soon turn into a loss.