The snow is falling outside and it’s freezing, which is why I am
pretty glad to be indoors somewhere nice and warm. So imagine how
unpleasant it would be to live in a half derelict shed at the bottom
of your landlord’s garden. Wouldn’t exactly feel like home, would it?

Exploitation of the vulnerable

Some of the poorest people in the UK are being exploited by
unscrupulous landlords in what the Daily Mail describes as a return to
the “notorious Victorian slum tenements of the 19th century”. Some
shed and garage conversions are not so bad, but many are no bigger
than glorified rabbit hutches; they are also dangerous.

More than forty-two rogue landlords have been handed enforcement
notices in the Newham Council borough since the end of 2011, and the
problem is getting worse thanks to overcrowding and rising rents. In
some cases, desperate families are being charged a fortune to take up
residence in a cramped hut with no facilities and certainly not enough
room.

Reporting dodgy dwellings

Once council officers have been alerted to the presence of an illegal
building, an enforcement notice is served on the owner instructing
them to take it down. If the owner fails to comply with the notice,
the council sends in contractors to forcibly remove the dwelling, at a
cost of around £1,000.

Wanted: good landlords

Local Authorities are happy to work with good landlords, but they are
also keen to stamp out rogue landlords in their boroughs, which means
serving enforcement notices on those who abuse the vulnerable for
profit.

Edinburgh Council has taken an unprecedented move by refusing an
application made by a landlord for entry on the Edinburgh landlord
register. This is apparently the first time such a move has been made,
but given the previous conduct of this particular landlord it is
hardly surprising that he is not considered to be a responsible
landlord in the city.

Previous offences

The BBC reports that the landlord has previously been convicted of
several offences relating to his buy to let letting business in
Edinburgh. In 2011, he was found guilty of operating a HMO without the
correct license and fined £1,000 as a result. Later that same year, he
was fined again for making threats against some of his tenants, which
is not exactly exemplary behaviour of a model landlord. He later
appealed against the refusal of an application for an HMO license,
which was of course rejected by the sheriff.

“Private rented property is an important part of the housing market in
Edinburgh and Landlord Registration laws have an important part to
play in ensuring tenants and neighbours can live their lives safe from
crime, disorder and danger,” said the Convenor of the Regulatory
Committee, a Councillor Barrie. “This decision sends a clear message
to good landlords, tenants and their neighbours that we will take
robust action against landlords who act unlawfully.”

So if you are rogue landlord operating in Edinburgh, the message is
simple: if you act unlawfully, you will soon find yourself banned from
letting out properties in the city.

The English Housing Survey results were published yesterday and a few interesting trends were highlighted. Apparently rents in the social sector have increased more in the last twelve months than those in the private sector, which is good news for tenants forced into private rented housing, although the average rent increase is still less than the current rate of inflation.

The figures also indicate that the private rental sector is now larger than it has been for twenty years, which is probably a reflection of the recession and the state of the housing market.

Differences in rents

Long term tenants often enjoy far lower rent rates than those who stay in properties for shorter tenancies and the report highlighted the fact that tenants who had been living in their properties for a decade or more paid around 28% less than tenants who had lived their for less than three years. This situation is clearly better for both tenants and landlords: long-term tenants enjoy a greater discount and landlords can have the security of a long term, reliable tenant.

Sub-standard rental homes

The report notes a fall in the numbers of sub-standard rental properties being marketed by UK landlords: the number of homes failing to meet the Decent Homes standard set by the government has fallen from 47% to 35%, which is good news for tenants. In response to this, the RLA has commented that this could be improved even further if landlords were give more tax breaks to encourage them to invest more in their rental properties.

A lot of people were probably hoping the property market would pick up in 2013, but so far that clearly isn’t happening and everywhere I look, there are dozens of properties for sale. A lack of mortgage funding is not helping matters, although lenders are slowly beginning to relax their lending restrictions, so there are still plenty of reasons to consider expanding your property portfolio if you are a landlord in the private sector.

Why invest further in the property market?

Current figures indicate that the average yield for a rental property is just under 6%, which when you look at the interest rates on savings accounts offered by high street lenders, is a great return on investment. So if you are looking for a way to make the most of your savings, or you need to plan for retirement, investing in buy to let property is still a good idea for many people.

Increase in accidental landlords

Many landlords enter the buy to let market by accident rather than design—in many cases because they are stuck with a property they can’t sell for love or money. But whatever the reason, research indicates that 1 in 8 of accidental landlords is more than happy with the money their property is generating and is seriously considering investing in further properties. And they are not the only ones—property website, Rightmove, says nearly three-quarters of professional landlords are planning to add to their property portfolio over the next twelve months, which is good news for the over-stretched rental market.

Landlords in England and Wales are obliged to put deposits paid by landlords into a Tenancy Deposit Scheme. This third party keeps hold of the money and prevents a landlord from unlawfully keeping the cash in the event of a dispute with his tenant. Up until now, landlords in Northern Ireland have been exempt from the deposit scheme, which has attracted criticism from some quarters.

How will the scheme work?

The Northern Ireland Assembly has approved the scheme and it will come into effect on 1st April. Four administrators will be appointed to operate it and Nelson McCausland, Social Development Minister, is confident that it will help to minimise disputes between landlords and tenants and help provide protection for all parties.

“Tenants across Northern Ireland in the private rental sector can now be afforded the same protection as those in Great Britain. This is a positive development for the private rental sector.”

Tenancy Deposit Scheme welcomed

Student leaders have applauded the new scheme and call it: “a victory for students and other tenants” and the NUS-USI president is very happy the scheme has had the go-ahead.

“We hear horror stories of students and other people who have rented a house and at end of the contract have left it in excellent condition but have had their deposit withheld by an unscrupulous landlord,” said Adrienne Peltz.

Severe penalties

Not everyone is happy about the scheme, including the Landlords Association:

“It’s very onerous and the penalties here are going to be more severe than in the UK, for whatever reason.”

Despite the fact that the majority of people are feeling the financial pinch these days occasionally a tenant may opt to pay their rents several months in advance, as well as handing over the specified deposit. In the case of a deposit, landlords must place the sum in a deposit protection scheme, but this is not the case with an advanced rental payment.

Rent or deposit

The issue of whether an advanced payment of rent can be classed as a deposit s recently been the subject of legal argument in the Court of Appeal. In the case of Johnson vs. Old, when a landlord tried to gain possession of his property, the tenant argued his advance rental payment had in fact been a deposit and since the landlord had not protected it, he could not be evicted under a Section 21 notice.

Case dismissed

The case went to court, but unfortunately the judge ruled in favour of the tenant. The landlord’s claim for possession of his property was thrown out and he was ordered to pay the tenant’s costs. The landlord was not happy about this, so he took his case to the Court of Appeal and won.

Landlord vs. tenant

However, the tenant decided he wasn’t about to back down yet and although he was initially refused leave to appeal, he applied directly to the Court of Appeal and was granted an appeal. The appeal case will now be heard at the beginning of March, so landlords will have to wait and see what the outcome is and whether (or not) rent paid in advance must be treated as a deposit, and therefore protected as such.

The Government’s Green Deal comes into effect today, so if you haven’t already made energy saving improvements to your properties, now would be a good time to look into what is on offer.

How does the Green Deal work?

The Green Deal is designed to let landlords and other property owners make energy saving improvements without having to pay the costs up front. Typical home improvements worth considering include:

 Double-glazing
 Loft insulation
 Cavity wall insulation
 Energy efficient heating system
 Renewable energy technology, including solar panels

Any one of these home improvements will cut energy bills and make the property a lot more attractive to potential tenants.

The Green Deal is fairly simple: an assessment needs to be carried out to see what improvements are necessary and how much can potentially be saved. Any work agreed upon is then paid for through the electricity bill on the property, so even if a tenant moves on, the Green Deal contract remains with the property.

Do I need to ask permission from my tenant?

Landlords must obtain permission from their tenant before signing a Green Deal contract allowing work to go ahead; the same applies to tenants.

What happens if I don’t bother having any work done?

All rental properties must reach a minimum level of energy efficiency by 2018, and if they don’t, landlords will not be allowed to let them. So it makes sense to have the essential work done now while government funding is available. A failure to do so may incur penalties at a later date.

It took well over a year and numerous court hearings, but a landlord finally
admitted he was in the wrong and pleaded guilty to failing to comply with the
Improvement Notice issued more than a year previously. As a result of the
action taken against him by Ashfield District Council, the landlord was fined
£1600.

Serious hazards in the rental property

Local authority inspectors had identified a number of serious hazards at the
rental property, which was occupied by a young family with a child. There were
no fire detectors in place, it was damp and full of mould, and the landlord had
also failed to produce evidence to show gas appliances had been safety checked.
The landlord evidently chose to ignore the case against him for a long time and
made no effort to resolve any of the issues, but by the time he arrived at the
magistrates court for the most recent hearing, he must have had a change of
heart, for he pleaded guilty.

A landlord’s defence

The landlord tried to defend himself by saying his tenants had been very difficult and had refused to pay their rent, but he did accept that perhaps he could (and should) have done more to make improvements to the property when the Improvement Notice was first issued.

Landlords beware

Ashfield council was keen to remind other landlords following the conclusion of
this court case that it is always willing to prosecute those who fail to
maintain standards in their rental properties, particularly when people’s lives
are at risk.

How often do you check up on your properties when you have long-term tenants in residence? A lot of landlords don’t think about doing checks once they have a tenant in and the rent is paid up on time. But, unfortunately, making the assumption that everything is fine could cost you dearly further down the line and if you fail to keep a close eye on your properties, you could end up having to deal with a dispute.

Why should properties be inspected regularly?

Just because a tenant pays their rent on time, it does not automatically mean that they are looking after your property. A lot of tenants don’t bother telling their landlords when things need repairing and it is not unusual for tenants to have had a flood and not reported the subsequent damage. Condensation and mildew are another common problem caused by a lack of ventilation in the property—over the course of a year, the damage can be immense, but if spotted early enough, mildew and damp can be successfully treated before it destroys carpets and soft furnishings.

Sub-letting problems

Another good reason to keep a close eye on your properties is to check that your tenants are not sub-letting to other people. If you let your property to a respectable young professional couple, the last thing you need is to find out that subsequently they sub-let the property to a family of six illegal immigrants who have caused irreparable damage.

How often should I check up on my tenants?

Mid tenancy checks are essential because they will help you become aware of any problems. And if you do find problems, make sure you document them in order to protect yourself in the event if a dispute further down the line.

The weather is pretty grim at the moment. There is a lot of snow on the ground and with freezing temperatures most days, it is hardly surprising that the majority of tenants would rather stay put than go to the trouble of moving house. Of course this is a double-edged sword for landlords – on the one hand you are unlikely to lose any existing tenants, but on the other, if you have an empty property, you may have a problem filling it.

Why are rents falling?

Most landlords would rather lower their rents than have an empty property sitting on their books. Empty properties during the winter are a nightmare. You need to keep them heated in order to prevent the horror of a burst pipe and with the shorter daylight hours, an empty home is a far more attractive target for burglars and anyone else up to no good. So in order to avoid these issues, a lot of landlords are willing to take a drop in rent.

How much have rents fallen?

Figures recently compiled indicate that rents have fallen by 0.9%, although rents are still higher than they were a year ago. However, before you start panicking that your buy to let investment is in danger of depreciating, experts say that this fall is only a seasonal blip and as soon as the weather warms up, so will the rental market.

Will the rental market continue to thrive in 2013?

The indications are good that the rental market will remain strong this year. It is still difficult for buyers to obtain mortgages and since demand for rental accommodation is high, the future looks bright for property investors.