Regular readers will know I like to highlight stories about disreputable landlords caught in the act of abusing their responsibilities to tenants, mainly because I feel it is wrong and that as a landlord we have certain responsibilities to ensure our properties are not putting tenants lives in danger.

So I was interested to read a story in the news today about a landlord operating as a limited company who had converted a seafront hotel, located in a prime area of Great Yarmouth, into illegal bedsits. The former hotel had ceased operating as a bed & breakfast some years previously, and in order to turn over a nice profit, the new owners had done a quick renovation (failing to heed fire safety regulations of course) and let the rooms out to a motley collection of tenants.

When council inspectors first visited the property, they gave the company director, Mr Siaulys, lots of helpful advice on how to fulfil his responsibilities as a good landlord and obtain the correct licenses. Unfortunately he decided not to bother and when a further inspection was carried out, Mr Siaulys was found guilty of a number of offences and the twenty permanent residents at the property were moved out for their own safety.

But crime never pays and although Mr Siaulys and his company have probably made an absolute fortune from letting the property illegally over the last few years, under the Proceeds of Crime Act (2002), a confiscation order for £40k was made in favour of Great Yarmouth Borough Council.

There are always stories in the press about criminals and other undesirables citing their human rights as a great reason for being allowed to stay in this country, claiming benefits and living the good life. Sadly this dubious line of defence may soon become yet another obstacle in the way of landlords trying to have problem tenants evicted.

A ruling by the Supreme Court in the case between a social housing tenant and a Local Authority has found that the move to evict the tenant following non-payment of rent was in breach of her right under Article 8 of the European Convention of Human Rights to have respect for a person’s home. The Lords ruled in favour of the tenant and said the Local Authority had not given due consideration as to whether it was “proportionate” to evict the tenant. The original eviction ruling was then overturned.

Why should landlords be concerned?

Unfortunately, because of the lack of clarification as to what constitutes “proportionate” action, buy to let landlords may well find that when they try to evict problem tenants because of antisocial behaviour or rent arrears, the tenant decides to claim the eviction is an abuse of their human rights under Article 8, which means it could become virtually impossible to get rid of them.

There is at least one case currently awaiting ruling whereby a tenant has used the Article 8 defence to avoid eviction, so it will be interesting to see what the outcome is. Hopefully the courts make the decision that Article 8 does not apply in the private rental sector, but if it does, the issue of what “proportionate” action is needs to be clarified.

Repairs and maintenance work is all part of property ownership, and if you are a landlord like me, keeping on top of such things at your properties is something else to add on to your list of “things to do”. However, whilst most of us are more than happy to pay for essential repairs, we might not necessarily choose the “green” option and we are unlikely to feel terribly happy at the thought of being told to replace loft insulation and install double glazing at the same time!

Like most responsible people, I recognise the sense in energy saving measures and so-called green initiatives, but I believe that they should be voluntary rather than compulsory. Unfortunately for home owners and landlords, the government is considering a new scheme whereby all property owners, including buy to let landlords, will be compelled to improve energy efficiency.

When essential repairs and property maintenance work is carried out, the property owner will have to choose the green option, so if a boiler needs replacing, instead of opting for a cheaper model, you will be forced to pay extra for an energy efficient condenser boiler instead.

The Communities and Local Government Department (CLG) insists repairs will have to be viable and is proposing to make available loans to fund the work, but at the end of the day, smaller landlords might not be able to afford expensive repairs, which will inevitably lead to a rise in “cowboy” traders cashing in on the demand.

At the moment, the proposals are still in draft form, so watch this space.

Amendments made to the Localism Act 2011 came into effect on April 6th 2012, so landlords need to ensure they are familiar with the new rules affecting tenants’ deposits, or they risk being hit by stringent fines.

What are the changes?

Under the old rules, landlords had 14 days to place their tenant’s deposit in a government approved deposit protection scheme and provide information about the scheme used. However, despite the strict rules and regulations, many landlords were able to exploit loopholes when appealing against fines for non-protection of deposits.

But things have been tightened up and new rules introduced. Landlords now have 30 days instead of 14 days to pay a deposit into one of the approved protection schemes and the longer notice period negates any potential arguments that there was not enough time to protect the deposit. Although fines handed out by judges will now be discretionary, they are likely to be more heavily enforced, and depending on the perceived seriousness of the transgression, could be as much as three times the original deposit. Landlords will also be unable to apply for a Section 21 possession order until the judge has made a ruling on the case.

Another big change landlords need to be aware of is that if a landlord does not adhere to the 30 day deadline, the tenant can make a claim against them for up to 6 years after the end of the tenancy.

Who will be affected by the new changes to the deposit protection rules?

The changes affect new tenancies that started on or after April 6th 2012, and in the case of existing tenancies, landlords have 30 days to place deposits in an approved deposit protection scheme.

We’ve all heard of Ikea—there is probably a store in virtually every city across the globe—and no doubt you have spent many happy hours wandering around your local Ikea, marvelling at the cheap prices and chuckling over some of the odd names they come up with for their pieces of furniture. But were you aware that Ikea is planning on redeveloping run-down urban neighbourhoods to create buy to let utopias?

Not content with encouraging us to ‘chuck out our chintz’ in favour of minimalist Swedish designs, the big bosses at Ikea have come up with an interesting new concept that they believe will revolutionise the rental market in the UK. Apparently Ikea is planning on using some of the vast profits accumulated from the great British public’s obsession with shopping at Ikea on a weekend, and using it to turn derelict inner city wastelands into idyllic urban communities populated by attractive furniture and happy, smiling families.

It might be sounding a bit creepy at this point, but the idea is actually an interesting one. In the style of “new towns” such as Milton Keynes (although we hope Ikea designers stay well away from the hideous grid system), Ikea is looking to create an all-rental neighbourhood of family-friendly homes and office units. The properties will be owned by Ikea, but managed by a private company. Residents will be able to enjoy living in a neat, landscaped environment, plus take part in on-site activities.

To be honest, it all sounds a bit “Butlins” to me, but it is certainly a unique take on the buy to let business model. What do you think?

New rules were introduced in 2010 to protect tenants living in houses of multiple occupancy (HMOs). These rules required landlords of such properties to apply for a special license from their local authority, to be issued after an inspection established the property was of a decent standard.

However, with the scheme rolled out further in January of this year now to include landlords of properties with three or more tenants sharing, it would appear that many landlords are still failing to bring their properties up to the required standards. Figures released by Oxford City Council indicate that just 3% of HMOs met the required standards which means a staggering 97% were not of a satisfactory standard.

When I was a student many moons ago, it was almost considered the norm to be living in absolute squalor, sinks piled sky high with week old dirty pots and hundreds of empty beer bottles strewn everywhere, but times have changed and modern students are far more likely to complain about damp, decrepit mattresses and unsafe appliances — as well they should!

Frankly I believe that it is completely unacceptable to expect tenants (often students) living in HMOs to put up with squalid conditions and any reputable landlord worth their salt should spend time and money sorting things out and ensuring their properties meet health and safety requirements. In Oxford alone, there have already been eight prosecutions made against landlords of dangerously unsafe HMOs, so before you find yourself in their shoes, take heed of any warning letters and recommendations you have received and put things right.

How much in rental income do your buy to let properties yield? Like many landlords, you are probably enjoying the current surge in demand for buy to let properties and an increase in rental income as a result, but just how much are rents likely to rise over the next few years?

According to the experts, rental income for buy to let properties is expected to rise by more than 20% over the next five years, which represents a pretty decent return for your investment. The current figures for rental income earned by UK landlords is £48 million per year, but this is expected to rise to about £70 million per year in five years time. The same study has also forecast a considerable shortage in the number of available rental properties, which is rather worrying given the current demand for buy to let homes across large swathes of the population.

Why is there a shortage of rental properties in the UK?

In many countries, institutional investment in the buy to let market is common practice and property developers often build for investors rather than individual buyers. Unfortunately, in the UK this type of investment is seen as unattractive because property prices are high and better returns are available elsewhere, but in order for the buy to let market to thrive, more investment is needed. Mortgage companies are also hindering the growth of the buy to let market: by demanding higher deposits from would-be landlords, fewer people are able to raise the funds necessary for investing in buy to let properties.

Unless you are a total technophobe, you cannot fail to be aware of the plethora of social networking sites out there. From Facebook to LinkedIn, in all probability you are a member of at least one of the most popular sites. But although checking your Facebook and chasing new contacts on LinkedIn can sometimes be useful for your property investment business, there is now a social networking site specifically aimed at helping landlords exchange useful information about tenants they have had contact with.

LandlordReferencing.co.uk has been set up by landlords for landlords and could turn out to be a very useful resource if you have access to a computer. The premise behind the site is very simple. It is designed to be a “community”, in much the same way as any other social networking site, but instead of exchanging banalities, if you are unlucky enough to be stuck with the tenant from hell, you can upload information about that person and let other landlords know before they end up handing over a tenancy agreement to the same individual—you also have an opportunity to check up on a potential tenant to ensure they are reliable and not about to make your life miserable.

The website is keen to point out that no privacy laws are being violated—if a landlord goes looking for information about an individual and there is a match with data held on the system, the website puts the two landlords in touch with one another.

It looks like being a win-win situation for landlords everywhere!

Most of the financial stories this week have centred on the Chancellor’s annual Budget. Before the budget, journalists speculated on what tax increases we could look forward to, but in the aftermath, the discussion is mostly about how Joe Average will be affected by the Chancellor’s decisions in the coming year.

How will the 2012 Budget affect buy to let landlords?

Well, unless you are operating your multi million pound property portfolio as a business and evading the taxman by stashing your gains in a cosy bank account in the Cayman Islands, you don’t have to worry about the changes to the Stamp Duty legislation. However, you should probably be concerned about your future tax bill.

I read a story in the Telegraph this morning about tax liabilities and how it is likely to affect the average buy to let landlord. With interest rates on mortgages low and demand for rental properties at an all-time high, many of us have been enjoying healthy profits from our property portfolio. But, as always, the taxman is waiting for his share, and for many landlords the tax bill for the 2010/2011 tax year will be correspondingly high. There will also be advanced payments to make for the coming tax year, based on liability from the previous year, so if you had a profitable year last year you can expect your tax instalment payment in July to be correspondingly high.

The combination of tax bill for 2010/2011 and advanced payments for 2011/2012 in January 12 and July 12 could prove catastrophic for the cash flow of many landlords, especially if their mortgages are now reverting back to standard variable rates from a discounted rate. So if you haven’t already done so, make sure you have money set aside to pay the HMRC!

Are any of your buy to let properties in a flood risk area? If they are, you may find you are soon stuck with properties that are uninsurable and therefore virtually impossible to sell as an agreement made between the government and the insurance companies twelve years ago is about to come to an end (June 2013).

This agreement forced insurance companies to provide cover for properties on flood plains, so even those with properties in high-risk areas susceptible to regular flooding were able to enjoy the protection of insurance against flood damage. But now that this agreement is coming to an end, all bets are off and the insurance companies are no longer obliged to provide cover.

As a result, industry experts predict that more than 200,000 property owners will be left without the protection of flood damage insurance, and if this applies to you, it means your tenants will not be able to secure contents insurance and you won’t be protected by buildings insurance. And if the worst does happen and the nearby river bursts its banks in heavy rain, your property could become uninhabitable for months, or worse still, so badly damaged that repairs are unaffordable.

Of course if you are looking to add to your portfolio, you can check whether a property is located in a high-risk flood area via maps on the Environment Agency website—areas of particular interest are Yorkshire, Nottinghamshire, Kent, Devon and Worcestershire. After all, there is little point in investing in a new buy to let property if you subsequently discover you can’t insure it!