According to the Residential Landlords Association (RLA), landlords are dealing with rising rent arrears, caused by their tenants’ Housing Benefit being unfairly suspended or cancelled. The problem is being blamed on the Department of Work and Pensions (DWP). The RLA says the problem is getting worse, even though the DWP and local authorities are aware there is a serious issue.

Housing Benefit Cuts
The problem arises when benefits claimants are told they aren’t making enough effort to find work. The tenant’s benefits are cut as a result, but what many tenants don’t realise is that their Housing Benefit is also affected.

“Landlords, already reeling from some of the worst effects of welfare reform, are also experiencing mounting rent arrears, caused by this same issue, which needs to be addressed by both councils and DWP urgently”, says the RLA.

Housing Charities Concerned
Housing charities are also concerned about the issue and have raised concerns with the DWP.

“People are not being advised that their housing benefit will be affected and that they may need to re-apply for it,” says homelessness charity, Crisis.

“Often they only realise there’s a problem when they are in arrears or facing eviction. There needs to be clear communication between the different [council] benefit departments to prevent people’s housing benefit being affected by sanctions [applied elsewhere].”

Landlords Struggling
Many landlords are struggling to get anywhere when they submit Alternative Payment Arrangement (APA) applications at the two-month rent arrears tipping point. Landlords should be able to submit APA applications online, but the system isn’t working and therefore they have to post them instead. The whole system is a shambles, which is leading to huge rent arrears and the threat of eviction for tenants.

The London property market is beyond expensive. The average property price is now more than half a million, whereas for that you could easily buy a ten-bed mansion with indoor swimming pool in Newcastle. Rental prices are also similarly high – the average monthly rent in London is currently £1,412, compared to £694 outside of the capital. But all this is just a drop in the ocean when you hear just how much a penthouse apartment in central London is being marketed for sale at…

An Exclusive London Address
A luxury flat at One Hyde Park, the most exclusive address in London has gone up for sale at a cool £10 million. With this sort of price tag, only Saudi princes or mega celebrities will be able to afford it, but if you are the type of landlord who markets his properties at posh tenants, this could be a good investment.

So what do you get for your cash?

The Height of Luxury
The apartment only has one bedroom, but what it lacks in beds, it certainly makes up for in luxury. Notable features include:

• In-house maid service and concierge
• Room service from the adjacent Mandarin Hotel
• A same day laundry and dry cleaning service
• Temperature controlled wine store
• Use of an on-site swimming pool
• SAS trained security guards
• The Queen lives just up the road

If the apartment sounds right up your street, don’t forget to budget for the £2k annual ground rent, £32k annual service charge, and a hefty £1.1 million stamp duty bill.

The Citizens Advice Bureau (CAB) is calling for tenants renting in the private sector to be given the legal right to ask for their money back if the property they rent turns out to have structural problems, dodgy wiring, and other health hazards.

In its report, Renting Uncovered, the Citizens Advice Bureau says that although there are plenty of statutory obligations in place to force landlords to make fundamental repairs in a rental property, there is nothing in place to prevent landlords from evicting tenants if they try and pursue their right to force a landlord to make repairs.

An Unfair System
The Citizens Advice Bureau says this goes against the Sale of Goods Act, which states that goods must be ‘as described, of satisfactory quality, and fit for purpose. So in other words, if you buy a kettle from Argos and it causes a fire in your kitchen as a result of faulty electrics, you can demand your money back under the Sale of Goods Act. But if you move into a rental flat and subsequently discover it is riddled with damp, you can’t ask for your money back from the landlord.

According to Gillian Guy, Chief Executive of the Citizens Advice Bureau:

“These days people rightly expect to get their money back if something they pay for is not up to scratch. Private renters can end up thousands of pounds out of pocket when they are let a home which turns out to be unfit to live in. We’re calling for a system which provides people with a refund if a private rented home doesn’t meet the most basic standards like safe electrics and being structurally sound.”

NLA Comments
The National Landlords Association says that the Citizens Advice Bureau is lumping all landlords under the same umbrella when it is only a few who wantonly evict tenants for asking for repairs to be carried out.

“There are times when well-meaning landlords do not respond adequately to their tenants’ needs. In these circumstances, surely education and support are more effective than penalties and demonisation?”

Fires are not an extraordinary occurrence. Sometimes accidents happen and a fire starts in a rental property. If a landlord has installed smoke alarms and provided his tenants with a fire blanket, fire extinguishers and other fire safety equipment, the chances are good that there will be no significant damage and/or loss of life. But this isn’t necessarily the case in other countries where fire safety legislation is often absent.

Hocus Pocus
In Dubai, for example, landlords seeking insurance compensation for fire damage to their property have been claiming that goblins and angry jinns are responsible for the fire. However, although there are undoubtedly plenty of people who believe in such nonsense, Ahmed Mohammed, a senior fire expert at the Criminal Evidence Department of the Dubai Police, says the practice of blaming supernatural entities for property fires is simply a scam. He insists the fires are more likely to be the result of negligence or criminal activity.

“Fire experts follow scientific methods according to specific rules. There have been cases in which a person or persons tell lies, and make weird claims that a jinn is behind the fire.”

Mohammed says landlords do this because a lot of tenants don’t know how to deal with fires when they start and therefore the damage is a lot greater.

Believe It Or Not…
In the UK, jinns (also known as genies) only appear in pantomimes, but Arab mythology is full of tales of vengeful spirits. Jinns are believed to be able to influence the actions of humans and in 2014 a Dubai man was granted a divorce after the court believed his assertion that his wife was possessed by a jinn.

Scottish landlords can look forward to a fantastic New Year as rents in Scotland are at an all-time high.

According to the buy to let index on the YourMove website, rents in Scotland have risen by 2.2%. This means the average monthly rent on a property in Scotland is £527 per month and Scottish landlords are now enjoying a fantastic 8.4% return on their investment.

On the opposite side of the coin, YourMove has also revealed that the number of tenants in arrears has risen to 6.6 per cent, which is not so good for landlords.

More Landlord Investment Needed
According to Christine Campbell from YourMove, “Scottish rents have been steadily edging forwards and reached a new pinnacle in November. Demand and supply are still out of kilter and in highly sought-after employment and cultural nerve-centres like Edinburgh this overflowing competition for homes to let has topped up rent prices.”

Campbell believes that the only way to reduce the current rental housing shortage is for more private landlords to invest in rental properties.

“If buy-to-let investment dries up, and the pool of properties to let contracts, rents will swallow the shortfall and eat into tenant finances,” she adds.

Ban Rip-off Rents Says Labour
Michael McMahon, the Scottish Labour housing spokesman says these figures indicate a need for reform in the Scottish private rental sector.

“Too many families are just getting by, the last thing they need is an exploitative rent hike from a bad landlord. That is why Scottish Labour proposed to ban rip-off rent rises.”

Private landlords guilty of serious safety breaches have been named and shamed on a publicly accessible database. The database has been created by the Chartered Institute of Environmental Health magazine and maps the landlords and firms that have been convicted under the Housing Act 2004. Now that this data is in the public realm, tenants will be able to check whether their landlord or letting agent has been prosecuted.

Pigeon Infestation
In total, the database lists 57 companies that are responsible for a total of 68 offences. The worst offender on the list is Aspire Group Developments – they have been prosecuted five times for various offences, including a failure to make repairs to a property infested with pigeons. Despite this, the firm appears to do remarkably well from the public purse because it received more than £184k in housing benefit in 2013.

The two firms with the dubious honour of attracting the highest fines are Watchstar Ltd and Watchacre Ltd, both owned by the same man. Haringey Council branded him a rogue landlord in 2013 and he was fined £40k for renting out flats in an “appalling and dangerous state of repair”.

Database Useful for Councils
Generation Rent says the database will be very useful for councils and tenants and should enable rogue landlords to be driven out of the marketplace.

“As more authorities introduce licensing and identify criminal landlords, they will start to be driven out of certain areas so neighbouring councils need the means to stop those landlords exploiting their residents,” said Alex Hilton, the director of the Generation Rent.

However, as the Chartered Institute of Environmental Health points out, prosecutions are only the tip of the iceberg and many landlords get away with flouting the law.

Diane Abbott, MP for Hackney, is calling upon the government to introduce rent controls. She says the private rental market is in serious need of reform because the high cost of renting in the capital has distorted living costs and many people have to hand over up to 50% of their monthly earnings to a landlord.

“A major international city without measures to stabilise rent runs the risk of rents spiralling out of people’s reach. It is no coincidence that New York, Paris and Berlin all have some version of rent control. For too long politicians have rejected any form of rent controls but it is time to look at the issue again.”

It is a contentious viewpoint, and to date not one that has been very popular with the politicians, but tenants’ pressure group, Generation Rent, is very much in agreement.

“Rent Control is one of those strange policies that’s popular with the public but beyond the pale for much of the political establishment. This is because it devalues the price of land, and wealthy people have a lot of money tied up in land at the moment,” says Alexander from Generation Rent.

Alan Ward from the Residential Landlords Association thinks the introduction of rent controls would be extremely “short-sighted”. Chris Walker from the Head of Housing, Planning and Urban Policy at Policy Exchange, doesn’t agree either:

“Not only do rent controls reduce future returns for landlords – lower returns imply lower investment – but they send entirely the wrong signal to future investors creating more uncertainty, not less…”

According to the latest buy to let index from Your Move, Scottish rents are increasing faster than those in England and Wales, The average rent in Scotland has increased by 2.2% in the last twelve months, compared to 1.5% in England and Wales.

Record Highs in Edinburgh
The average rent in Edinburgh is £615 per month, which is a record high, but Glasgow has fared less well – rental prices there have dropped slightly. Unfortunately the increase in rental prices has affected affordability and rent arrears are on the up. 6.5% of Scottish tenants are now in arrears, compared to 6% twelve months ago.

“Scotland may be outperforming the rest of the UK with higher employment rates and rising wages, but when the rate of inflation is taken into account, in real terms earnings aren’t helping people climb out of the red,” explains Christine Campbell from Your Move.

Rental yields in Scotland in October were 4.1%. This is a slight drop on the same period last year – in October 2013 rental yields were 4.2%. The annual return on rental property was 8.9% over the last twelve months, but this dropped off slightly before the Scottish independence referendum.

The Scottish Independence Effect
“The question of Scottish independence loomed large over the housing market this summer, and property price growth faltered as would-be buyers and investors hesitated to see how the votes rolled in. While this has left a tiny imprint on landlord returns in the past couple of months, this impact was cushioned by stable and resilient rental income – and the outlook certainly hasn’t dulled for buy-to-let,” says Christine Campbell.

Hastings Borough Council is currently at the consultation stage over a new licensing plan for landlords in the town. The council say the scheme will reduce anti-social behaviour and encourage local landlords to take responsibility for their tenants. If the scheme gets the go-ahead, landlords will have to pay £415 per property for a license.

Improved Quality of Housing
The council thinks a licensing scheme is the best way to improve the quality of accommodation in the town.

“Our evidence suggests higher levels of antisocial behaviour are a feature where high density private renting exists within the town and that’s why we are considering the scheme,” says council leader, Jeremy Birch.

Unhappy Landlords
Landlords in the town are not happy about the proposed changes. Many believe that the only way they can afford the extra cost of a landlord licensing scheme is to put the rent up. The National Landlords Association agrees.

“This new scheme would be in addition to the existing licensing scheme in Hastings, so it’s another operational cost the landlords will have to foot,” says Tony Richard from the NLA.

“The council fails to understand that letting property is a business, so the unintended consequence is obvious.”

Housing charity, Generation Rent, disagrees. Clive Gross, representative from the charity believes that Hasting has become a ‘dumping ground’ for tenants. He thinks the licensing scheme is a good thing because it will help the council drive up the standard of local housing and reduce the number of rogue landlords who exploit their tenants.

It can be a time-consuming affair being a landlord. Dealing with tenants, sorting out problems in your properties and keeping up with the paperwork all takes time and effort, which if you work full-time is an impossible proposition. But there is an answer if you want to give property investment a go without getting your hands dirty as a full-time landlord.

The REIT Scheme
Real Estate Investment Trusts (REIT) are not a new idea – they were introduced into the UK back in 2007 – but this is the first time a mainstream UK residential property REIT has been made available to UK investors.

How it works is very simple. Investors buy shares in the REIT and any profits made as a result of rental income and capital gains are tax-free. There is a minimum investment of £1,000 in the REIT platform SyndicateRoom, but investors can drip-feed cash into the scheme and take out 90% of the rental profits as a dividend payment.

A Win-win Opportunity
The owner of the REIT says the scheme is a win-win investment opportunity for would-be buyers as it can help investors realise a tax efficient income from the buy to let market without the need for a significant investment of time and capital.

House prices in many parts of the country are putting investment properties out of reach for many small investors and with mortgage interest rates expected to rise in the next twelve months, a residential REIT is a liquid alternative to buying and managing a traditional buy to let property.