Council Tax is just one of the many irksome bills we face in the UK. Under the current rules, if a property is vacant for a period of six months or less, it is exempt from Council Tax. This is a godsend for landlords because if a tenant moves out and the buy to let property is left empty for a few months, not having to pay Council Tax can potentially be very helpful to your cash flow situation since every little helps.

Unfortunately the government is making changes to the system and the current 6-month period of grace before an empty property becomes liable for Council Tax will be suspended in order to provide additional revenue for financially stricken local authorities. The government has stated that the choice of whether (or not) to charge Council Tax on an empty property, even if it is only empty for a few days, will fall at the feet of each individual local authority. However, I find it hard to believe that many will choose not to take advantage of such an earning potential!

The whole situation could turn into a total nightmare for landlords and letting agents alike. Aside from the administrative burden of having to advise the local authority of each vacant buy to let property, even when the void period only lasts a few days, the extra cost of paying tax on a property from which no income is being derived could be catastrophic for many smaller landlords. So it is hardly surprising that many industry experts are expressing concern about the negative effect such a policy will have on the buy to let market.

It is always better to have more than one egg in your basket and landlords with only one or two properties are reportedly finding it much harder to cope with the current economic recession than landlords with larger portfolios of buy to let properties.

According to research carried out by one independent body, the number of landlords who own only one buy to let property and who are facing financial problems has doubled in the last quarter. This is a sharp rise on the previous quarter and indicates just how tough the conditions faced by smaller landlords are at the moment.

One of the biggest issues affecting smaller landlords is the financial fallout caused by significant periods of rent void. Tenant demand might be high, but if your tenants can’t afford to pay your rent, it won’t be long before the cash flow dries up—and if you have a mortgage to pay, this is not a good state of affairs!

The best way to become a profitable buy to land landlord is to spread your income over a larger portfolio of properties: figures show that around 68% of full-time landlords with more than eleven buy to let properties are currently showing a healthy profit.

However, no matter how many buy to let properties you own, the best way to ensure you are not caught out by significant void periods is to choose your tenants very carefully. Times may be tough, but demand for rental accommodation continues to grow and buy to let is still a good investment for would-be landlords.

The RLA has released some important information for landlords to remind them of their legal obligations if they are responsible for properties fitted with water installations and storage systems.

Legionnaires Disease is very serious, and although it is relatively rare, the disease can and does kill some of those affected each year. The Legionnaires Disease bacteria are spread in water droplets and cases of infection normally arise from inhalation of bacteria laden water droplets in the air.

Why do landlords need to be concerned?

If any of your properties have a water system, you need to make a risk assessment as to whether your tenants and their visitors are at risk of infection from Legionnaires Disease. The risk of contamination is normally greater in larger premises, but smaller systems can be vulnerable if the right conditions for Legionella bacterial growth are present—particularly if water is stored in the system and pipe work is old, rusty, or contains organic matter; even showerheads can harbour Legionella bacteria! It is also worth remembering that older people, children and anyone with a weakened immune system are more vulnerable to infection.

If you are concerned, pay a visit to the HSE website and find out how to test for the presence of Legionella bacterium. Should testing indicate you might have a problem, you will need to make changes to the water system to eliminate the risk. And if you ignore the risk and someone at the property becomes infected as a result of your negligence, you can be prosecuted even if the infection is very minor.

In a recent landmark case at the High Court in London, a judge has ruled that the landlord (Hillingdon Council) was responsible after a contractor sustained an injury as a result of a minor repair made by a tenant, and although the landlord didn’t give permission for the tenant’s work, the council is now liable for a possible six figure payout.

Clearly this case could have massive repercussions for landlords all over the UK: if a tenant living in one of your properties decides to carry out some minor repairs and a third party is subsequently injured, even if you didn’t give permission for the work to be done you could still end up being sued for damages.

The landmark ruling has also cast doubt on the government’s pilot cash-back scheme aimed at allowing tenants to do some of their own minor repairs. The government backed scheme is currently being piloted in three areas of the UK, but there are very few controls in place to ensure health and safety legislation is complied with, which means the onus is on the landlord to check repairs have been carried out to a good standard.

So if your tenant asks if he can do some DIY in your property this weekend, you are advised to either say: “no thanks”, or check that the work has been completed to an appropriate standard of workmanship. Failure to do this could mean you find yourself in the shoes of Hillingdon Council, awaiting the decision on a very expensive court case!

In a scathing attack in yesterday’s Guardian, Hilary Benn, the shadow secretary of state for local government and communities, accused private letting agencies of ripping off landlords and vulnerable tenants through the practice of charging extortionate fees and hidden charges.

With the private rental market growing at a phenomenal rate, it is becoming increasingly common for letting agents to act as the go-between for smaller landlords and their tenants. Unfortunately, as many new landlords have belatedly discovered, letting agencies operate within an unregulated industry and literally anyone can set themselves as a letting agent. But although the introduction of greater regulation and bureaucracy is likely to complicate the rental market even further, there are some in the industry who feel that something needs to be done to discourage opportunist charlatans from setting up shop as a letting agent and then ripping their customers off to the tune of thousands.

However, despite calls from Labour for more regulation to be put in place to protect landlords and tenants, the Conservative Housing Minister, Grant Shapps, has dismissed the idea. He believes that there are more than enough voluntary regulatory bodies currently in operation, which provide plenty of protection and redress systems for when things go wrong.

“In view of the existence of these schemes, I do not think that the time is right for Government-imposed regulation of the sector which would run the risk of increasing burdens and costs and, therefore, reducing supply and forcing up rents,” he said when challenged by the Shadow Housing Minister, Jack Dromey.

One North London landlord is probably ruing the day he ever decided to carry out some illegal conversions on his properties in order to capitalise on the current demand for bedsits and flats: in a bid to make some money, he converted four large properties bought at knock down prices into illegal bedsits and shared accommodation. Sadly for him, as a result of his cut-price entrepreneurial efforts, he has just been fined a massive £328,515, and if he fails to pay the fine within six months, he faces being sent to prison for three and a half years.

A judge sitting at Harrow Crown Court awarded the huge fine following a successful prosecution by Brent Council, who decided to take legal action after the landlord repeatedly ignored local planning laws. The fine includes a considerable amount of money (around £300,000 will be collected under the Proceeds of Crime Act) paid out by tenants living in the squalid accommodation; the rest is made up of legal costs and further fines levied for failing to apply for planning consent. The landlord was also convicted of various fire safety breaches and fraud charges.

The record fine imposed on this landlord is of course a sharp reminder to every other landlord hoping to make some easy money in the booming rental market: it might seem like a fantastic idea to convert a large property into bedsits on the cheap, but if you fail to follow the rules, sooner or later you will have to pay the consequences, which in this instance proved to be an extremely costly lesson!

No landlord wants to have arguments with his tenants and it is a lot easier for everyone concerned when relations between a landlord and tenant are cordial and polite, but sometimes disagreements do happen and things turn sour.

In a prime example of just how nasty a bad situation can become, the Daily Mail ran a story yesterday about a £12,000 bill left by one disgruntled tenant following a row with his landlord. The tenant, whose rent was paid by the Local Authority, initially appeared to be a pleasant gentleman, but before long, events took a sinister turn.

A complaint was made to the landlord that the tenant was illegally bypassing the electricity meter in order to save money. The landlord investigated and found this to be true, so he asked the tenant to put the situation right. When the tenant failed to do so, the electricity board were called in and eventually the meter was switched off.

The tenant took exception to his landlord’s intervention and over the next few months, systematically trashed the house. By the time the landlord gained entry to his property, it had been completely destroyed. There was animal excrement and an overpowering stench of urine everywhere, doors had been kicked in and carpets ripped up. There was also racist graffiti scrawled across a door and wall.

Unfortunately for the landlord, although he did have insurance cover, he has since been informed his policy contains a clause excluding animal related damage, so he will have to fund a lot of the repairs himself.

Finding the right tenant for a rental property is not always easy. The current economic recession is biting hard and with unemployment at an all-time high and wages failing to keep in line with the cost of living, rent arrears are becoming an increasing problem for many UK landlords.

According to recent figures, more than 100,000 tenants were at least two months behind on their rent payments between April and June of this year. As a result, there has been a corresponding rise in the number of landlords taking court action in order to evict non-paying tenants in the last three months.

How can landlords try and avoid such problems?

The best way to avoid having to take your tenants to court for non-payment of rent is to choose the right tenant in the first place, and although there are always going to be some circumstances where a tenants is struggling to pay the rent because he unexpectedly lost his job, or similar, it makes sense to scrutinise references even more closely in these difficult times.

But if your tenants do appear to be struggling with rent payments, tackle the issue sooner rather than later. Talk to them and find out what the underlying reason is, and if they are otherwise good, reliable tenants, consider reducing the rent for a short period of time until they get back on their feet. Just remember to put anything you agree on in writing in case there is a dispute at a later date. However, if you can’t resolve the situation, make a move to have the tenant evicted before you lose too much money.

According to a recent survey carried out by the Department for Communities and Local Government, the percentage of homes in the private rented sector is now equal to that in the social sector, which together makes up a huge 17% of the total housing stock in the UK.

In the last ten decades, the number of private rental homes in the UK has risen by a massive 1.5 million whilst the number of local authority owned houses has fallen by 1.8 million. And as Alan Ward, chairman of the RLA, commented:

“The news that the private rented sector is now equal in size to the social rented sector demonstrates the ever-increasing importance of the sector in meeting the UK’s housing needs.”

The result of the survey is not all that surprising when you consider that the cost of owning our own home is becoming increasingly unaffordable for a large number of the population, especially younger people with no savings. However, it does illustrate just how important the role of private landlords are in the current economic climate—without people like us buying property to let, there would be an even greater shortage of housing stock in the UK.

However, despite the increase of landlords in the private rental sector, there is still a chronic shortage of homes available, which in part is driving rents up across most parts of the UK. As a result of this, industry experts are still calling on the government to review the way landlords are taxed in order to encourage further investment and increase housing stock.

Letting rental properties to student tenants can be very lucrative: you are pretty much guaranteed rental income for a year in advance and if you own buy to let properties in popular university cities, there will be no shortage of students waiting to move in. But although many students make excellent tenants, there are long holidays between academic terms and your properties could be left empty for several weeks at a time.

Potential problems during student void periods

1.    An empty property is a magnet for thieves and squatters, so if you know your student tenants are going home for the summer holiday, make sure locks on doors and windows are in good condition and keep a close eye on the property. Ask your students to hide any expensive equipment out of sight and avoid telling all and sundry that they are going to be away.

2.    Accidental damage caused by a running tap or a leaky pipe is very common in empty properties: if someone fails to turn a tap off before they head home for a couple of weeks, the subsequent flood could cost you a lot of money. The best way to prevent such problems is to turn the mains water supply off when the property is left vacant.

3.    Some students may decide to sublet their house or flat whilst they away, but although their new best mate might seem like a nice guy, he could just as easily bring his pets along for the ride, thus leaving you with a bill for damage to furnishings and carpets. It is also not unheard of for unofficial tenants to turn an empty house into a cannabis farm or brothel for the summer break, so make it quite clear to your student tenants that this is not an option!