It was widely reported at the beginning of the week than ‘super
landlord’, Fergus Wilson, had decided to issue eviction notices to 200
of his welfare tenants. At the time he justified his decision by telling
reporters it was a business decision based on financial reasons, but in
the wake of a flood of criticism calling him ‘heartless’, he has hit
back at his critics by saying:

Fergus Wilson Hits Back
“If I am heartless all the other landlords are heartless, because we’re
all doing the same,” he said. “All the landlords will tell you that
there is so much default now with housing benefit tenants that you are
just simply better off with somebody working.”

Wilson did confess to Channel 4 News that he felt guilty about the
people he was evicting, even going as far as to suggest that “some could
be in dire circumstances”, but it hasn’t changed his mind about the
decision. He remains adamant that things can’t go on with more than 50%
of his welfare tenants in arrears, which is something that an awful lot
of landlords will probably be able to empathise with.

No DSS Tenants
Wilson isn’t the only landlord who doesn’t want housing benefit tenants
and many letting agents make a point of saying ‘NO DSS’ in their
advertising materials. Indeed, the NLA reported in December that only 1
in 5 of landlords questioned were willing to rent to tenants in receipt
of benefits, although in some parts of the UK, landlords don’t have much
choice because working tenants are few and far between.

Landlords: is your experience of welfare tenants good or bad? Let us
know in the comments section!

It may be a New Year, but this doesn’t mean that rogue landlords have turned over a new leaf and resolved to improve the conditions inside their properties. Because of this, Sheffield and Barnsley Council have been awarded £400k to help them track down rogue landlords operating in their areas.

Government Funding Boost
The £400k grant awarded to Sheffield and Barnsley Councils is just a small part of a £4 million cash bonanza earmarked to help councils all over the UK eradicate rogue landlords. Kris Hopkins, the minister for housing, has agreed the funding alongside tough new legislation designed to clean up the private rental sector.

“The majority of tenants are happy with their home, but the private rental market is still afflicted by too many ‘unscrupulous Scrooges’: miserly landlords who rent dangerous, dirty and overcrowded properties without a thought for the welfare of their tenants,” he was recently quoted as saying.

23 councils across the UK have been allocated funding as part of the scheme. All of these have been identified as having a problem with sub-standard housing whereby properties are dangerously overcrowded and unsafe.

Severe Penalties for Rogue Landlords
Rogue landlords face all kinds of penalties should they continue to operate slum housing. Thanks to the new funding boost, councils such as Sheffield and Barnsley will have the resources available to tackle the problem and take cowboy operators to court. Landlords who flout the rules could end up with hefty fines as a result of their dodgy practices. Further measures to introduce an approval scheme for letting agencies are also planned.

Rent arrears are affecting an increasing number of landlords and tenant
evictions are on the up. Unfortunately, a lot of first time landlords
don’t bother to check tenants’ references because they are trying to save
money, which is a big mistake in the current economic climate.

Why Tenant Checks are So Important

If you let a property through an agent, the agency will check references
on your behalf, but if you are managing your own properties, it is down
to you to check a tenant’s references. Running references does incur a
cost, but failing to do so could cost you a lot more in the long run
because tenants are not always what they seem.

• Con artists – Some tenants lie through their teeth in order to
get a foot in the door. They know their lies will unravel eventually, but
once they are in situ the onus is on you to get them out of the property,
and in the meantime they won’t bother paying the rent and live there for
free.

• Tenant fraud – Criminal activities can be prevented by running a
simple identity check and you can avoid the horror of discovering your
lovely four-bed executive detached property has been converted into a
cannabis farm.

• Affordability – Is your tenant really a highflying lawyer, or is
he a low-paid waiter instead? If he isn’t, checking his references will
help you avoid taking on a tenant who can’t afford the rent.

No matter how likeable and genuine a tenant appears to be, don’t skip the
reference checks—if you do, your oversight could come back and bite you
big time.

The cost of renting a home in the private sector is at an all-time high
in many areas of the UK. This is clearly good news if you are a landlord
with a large portfolio of properties, but what happens if you only have
one or two properties and your tenants can’t afford to pay the rent
because they have just lost their job?

Rising Rents
Times are tough at the moment and even though the economy is beginning to
show signs of recovery, the cost of living is showing no signs of going
down. It has never been so expensive to rent a home in the UK. But to
make matters worse, the cost of everything else is just as high.

According to a leading debt charity, many tenants are finding it
increasingly difficult to scrape together enough cash to pay the rent at
the end of the month. The Money Charity has revealed that the number of
landlords seeing possession orders from the courts has risen in recent
months and they say that the high cost of renting in the private sector
is in part responsible.

What can Landlords Do?
Communication is vital so always make a point of building a good
relationship with your tenants. Hopefully, this will encourage them to
let you know if they are experiencing cash flow problems so you can be
proactive before the debt escalates. Ignoring the problem won’t make it
go away. Talk to them and find out what the problem is. Try and be
helpful and supportive. Landlords who are sympathetic are more likely to
get paid if funds are limited. However, you still need to make it clear
that they will be evicted if they don’t pay up soon.

Increasing numbers of property investors from the UK and abroad are
choosing to invest their cash in student housing. Around £1.6 billion was
poured into student housing between January and September this year.

Unlike other property in the commercial sector, student housing offers
investors returns of around 10%, which is a lot better than any rates on
offer from a traditional savings account. It’s also a lot better than the
returns you can expect from residential lets.

Student Housing Sector Set to Grow
The government has pledged to continue backing education for the
foreseeable future and George Osborne has just announced that a further
30,000 university places will be made available from next September. He
has also stated that existing restrictions on the number of student
places on offer at UK universities will be lifted.

Rise in the Number of Foreign Students
Industry experts predict that the number of foreign students coming to
the UK to study is set to increase by 15-20% in the next five years. This
is of course great news for landlords operating in the student sector. As
demand for student accommodation increases, so too do rental values,
particularly in popular university cities such as Manchester, Oxford and
Leeds.

Steady rental income, high occupancy and low void periods, combined with
high returns on investment, make student housing a popular investment for
small and large landlords. But in order to maximise your profits, you
need to operate in the right areas, so do your research before you buy a
student property.

Channel 4 showed an interesting story concerning the life and times of
Daniel Burton, the man who brought the concept of ‘rent to rent’ into the
media spotlight. Sadly, despite many years of successful trading, Daniel
Burton and his company have disappeared into the ether—along with an
awful lot of cash owing to disgruntled tenants. So what happened?

Get Rich Quick

Rent to rent was viewed as a ‘get rich quick’ scheme. Daniel Burton
wasn’t the only landlord to jump on to the bandwagon, but he was perhaps
the best known. At one point, Daniel Burton was reported as making around
£35k per month. He even ran seminars to help instruct those eager
wannabes who wanted to emulate his meteoric rise to property letting
success. Unfortunately, tenants were less than impressed with his
business blueprint.

Rent to Rent

The idea behind rent to rent is simple. People like Daniel Burton rent a
large property from an existing buy to let landlord. They then sub-let
the property to tenants looking for individual rooms. To make the scheme
pay, tenants are packed into the properties like sardines in order to
maximise rental income for the sub-letting landlord. If there are
problems with the property, the sub-letting landlord doesn’t have to deal
with disgruntled tenants; instead he directs their complaints back to the
original landlord owner of the property.

Sadly, it all went a bit wrong for Daniel Burton and his company. Channel
4 eventually tracked him down to sunny Scunthorpe in the north of
England, which is a far cry from his previous stomping ground of London.
But if you want to know the ins and outs of Daniel’s story, check out
Channel 4.

Many local authorities are used to dealing with rogue landlords, but housing officers from Barnet Council were horrified when they discovered the awful conditions a group of tenants were being forced to live in. The property was brought to the attention of Barnet housing officials after a concerned neighbour complained about conditions in and around the house.

Horrific Living Conditions

Environmental officers visited the HMO and discovered a whole catalogue of woes. The kitchen ceiling in the property had fallen in and the walls in the shower room were not fit for purpose. The shower attachment was also being used to wash crockery. An old mattress covered an open manhole outside and there were piles of rubbish strewn everywhere. There were also defective smoke alarms in the house. All in all, the property was in a terrible state, which can’t have been much fun for the six adults, four children and a 9 month old baby who were living there at the time.

Landlord Fined

The manager of the property was summoned to appear in court to face various charges and although he didn’t bother showing up he was fined £17k in his absence. The property development company who owned the property was also fined £16k for converting the house into bedsits without appropriate planning permissions in place.
Warning to Rogue Landlords

Barnet Council has now issued a warning to other landlords operating in their borough:

“Barnet Council will not hesitate to take the appropriate action to ensure that poor landlords do not evade their responsibilities and put tenants at risk.”

Newham Council in East London started the trend and now Liverpool Council is
set to follow. As of Friday 22nd November, the council has begun a
consultation process that will last twelve weeks. If the licensing scheme goes
ahead (and it is likely that it will go ahead), at some point after the
beginning of April 2014, all rental homes in Liverpool will need a compulsory
licence.

Stamping Out Rogue Landlords

The council is justifying the introduction of a compulsory blanket license
scheme by stating that the scheme will help to eradicate the problem of poorly
managed properties in the city. Although they admit that the vast majority of
landlords in Liverpool manage their properties extremely well, there are a
small minority who fail to deal with anti-social behaviour such as noise and
rubbish strewn gardens.

Ann O’Byrne, who is the Liverpool council’s cabinet minister for housing, was
quoted as saying: “It’s vital that we do all we can to work with landlords
across Liverpool to drive up the quality of our private rented properties.”
Building Positive Landlord Relationships

The council hopes to improve buy to let in the city and develop a “good
quality private rented sector which tenants can be confident in…” And through
the introduction of a licensing scheme, they hope to build good working
relationships with local landlords in the city.

Cost of Landlord Licensing

Although the council has yet to say how much they intend on charging buy to
let landlords, it is likely that the fees will be similar to those charged by
Newham Council–£500 for a single 5-year license and four times that for an
HMO license.

The government is trying to clean up the rental sector by introducing a
Consumer Protection Charter for letting agents. The rental sector has been
blighted in recent years by reports of rogue letting agents. Tales of stupidly
high fees abound and many agents have ended up in court after defrauding their
clients. Some have even gone bust overnight, taking client money with them.
Because of this the government has been reviewing how best to offer a greater
level of protection to landlords and tenants. They have come up with a
Consumer Protection Charter and all letting agents will be forced to join the
scheme.

What are the Key Points of the Consumer Protection Charter?

• Independent investigation of complaints – Previously, clients had few
avenues for redress if things went wrong.

• Compensation scheme for clients – This will give landlords peace of
mind in the event that a letting agent goes bust.

• Secure money protection scheme – There have been a few cases where
letting agents spent their clients’ money after cash flow dried up.

• Voluntary Code of Practise – Letting agents will have to be open about
the properties on their books, which means telling tenants if critical jobs
need doing.

• Transparent fee structure – There should be no hidden fees cloaked
within the small print and letting agents must be upfront about what their
costs include.

Compulsory Requirement

The government hopes to have all schemes approved by the end of January 2014,
although it will be a while longer before it becomes compulsory for letting
agents to join.

Following the success of selective licensing in neighbouring Newham, Waltham Forest Council in London has decided to roll out a selective licensing scheme for homes in the private rental sector. The borough will be consulting with landlords, tenants and local businesses until 24th January 2014. If the scheme goes ahead, around 33k homes could be affected.

Improving the Private Rented Sector
Waltham Forest Council is hoping that the introduction of a selective licensing scheme will improve standards on the private rented sector. They want to reduce levels of anti-social behaviour and enviro-crime, which includes littering and leaving mess in gardens. The council is also keen to cut down on the number of tenants who antagonise their neighbours by playing loud music or use their homes for illegal activities such as drug dealing.

According to a council spokesperson, “We also want to use licensing to drive up management standards generally for all private rented properties in the borough as our studies have shown that many tenants renting in the private sector are having to endure some of the worst housing conditions in the borough, such as serious overcrowding and living in unfit homes.”

How Much Will the License Fee Cost?
Landlords will be expected to pay £500 for a five-year licence. However, the council won’t be making a penny from the scheme. Instead all monies earned will be used to help administer the scheme.

It is likely that other councils will be keeping a close eye on what happens in Waltham Forest, and if the scheme goes ahead and is deemed to be a success, other councils may decide to follow suit.