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.

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.