Banks and financial institutions already have access to a wide range of financial information to help them decide whom to offer credit to, but by the end of this year, rent payments will be added to the list and if a tenant fails to pay their rent on time, it could affect his or her credit rating.

The largest credit reference agency in the UK, Experian, is currently in talks with some of the bigger landlords and letting agencies in a bid to persuade them to include a clause in future tenancy agreements that allows them to hand over information on a tenant’s payment history. Once the data starts rolling in, it will soon appear on credit files, although many smaller amateur landlords may choose not to sign up the scheme and it will therefore not cover everyone.

How will this move affect landlords?

Sharing financial data on a much wider scale will offer landlords a number of advantages. Landlords will be able to pay a fee to search a potential tenant’s credit file in order to check their rent payment history. By doing so, you will be able to see if a tenant has a history of being late with their rent payments, or has ever failed to make payment.

Are there any disadvantages to the sharing of rent payment information?

Tenants who sign up for joint tenancy agreements could find their credit rating shot to pieces through no fault of their own. For example, if one flatmate misses a rent payment, it will count against ALL tenants living in the same property.

There have been lots of stories of late about rogue landlords—they are the type that let out properties in a poor condition or try to cram as many tenants as possible into a sub-standard property. But rogue letting agents are also becoming an increasing problem for the buy to let industry and according to the ombudsman, complaints against letting agents rose by 26% in 2011.

The job of a letting agent is to act as a liaison between the landlord and tenant if the landlord is unable or unwilling to manage their properties directly. A good letting agent provides a valuable service, albeit for a fee, but a bad letting agent will cost you money, either through their incompetence, or because they attempt to deliberately defraud you.

Unfortunately, when things go wrong, a landlord’s only avenue of redress is to start legal action, which is inevitably a costly and time consuming process. So in an attempt to improve on this woeful state of affairs (in the absence of government regulation), the ombudsman is calling for reputable letting agents and industry bodies to self-regulate their own industry. This will hopefully force letting agents to join approved schemes that oblige them to follow specific codes of conduct.

As things currently stand, anyone and their dog can operate as a lettings agent since no formal qualifications or licenses are required. But by introducing self-regulation into the arena, the ombudsman hopes that disreputable letting agents will eventually become outlawed and consumers will learn how to spot the rogues before they have the opportunity to take your money and run.

I read with interest this morning about how a lucrative housing scam cost some landlords in the South East as much as £86k each in damages and loss of rental income. Thankfully the person responsible has been now bought to justice and will serve four years in prison before being deported back to her native Zimbabwe.

What happened?

Rose Chimuka rented a number of large family homes across the South London area. She approached landlords using fake ID and pretended to be a wife and mother with a respectable well-paid husband. None of the landlords suspected a thing and once the lease had been signed and the keys to the property handed over, Chimuka proceeded to change the locks and convert each room in the property into a bedsit in order to generate as much rental income as possible.

Once the locks had been changed, landlords who became suspicious and turned up to inspect their houses were unable to gain access—in one instance Chimuka even had the audacity to call the police when a landlord tried to enter his own property!

Apparently Chimuka made around £100,000 from her housing scam, but like all good things, her money making scheme came to an abrupt end when she was arrested on eleven counts of fraud.

How can you prevent this from happening to you?

1. Be as thorough as you can when checking a tenant’s references—never take any potential tenant at face value, as things are not always what they seem.

2. Take out a good landlords’ insurance policy to protect you from potential property damage and loss of rental income.

Mortgage rates have been at an all-time historic low for a long time now, which has been great for everyone, landlords included, but there are now ominous rumbles on the horizon pointing towards an increase in interest rates from all of the main high street lenders, despite the fact the Bank of England continues to maintain its base rate at 0.5%.

If the thought of expanding your property portfolio is tempting at the moment, which is likely given the recent boom in the buy to let market, and you are still thinking about applying for a buy to let mortgage, you should consider biting the bullet sooner rather than later. The word on the high street is that the Halifax is planning on raising its standard variable rate on May 1st. Once this happens, the other big lenders will undoubtedly follow suit shortly afterwards, so if you leave it for another few months, you may find that your repayments increase by a fairly hefty amount, which is never good news.

However, despite the impending rise in mortgage interest rates, the property market is still in the doldrums and property is becoming increasingly affordable. This is obviously helpful for first time buyers as they have been priced out of the market in recent years, but it is also good news for landlords as it means cheap property is more widely available in many areas of the country.

But before you apply for a new buy to let mortgage, do your math—if mortgage rates DO rise as predicted, do not want to take the risk of ending up in mortgage arrears should you be left with no tenants for any length of time.

The vast majority of tenants you can expect to meet during the course of your business dealings as a landlord are likely to be polite and happy to pay their rent on time, but for an increasing number of landlords, fraudulent tenancy applications are being made by habitual bad tenants and are becoming a real problem.

As a landlord, you are probably going to meet a bad tenant at some point. They are the ones who move in and within a short time default on their rent payments. But although some tenants DO find themselves in financial difficulties, sometimes through no fault of their own, there are an increasing number of “bad” tenants who made a career out of moving from property to property, having had no intention of paying the rent when they signed the tenancy agreement.

Such tenants often appear to be honest and reputable citizens, but they give you false information when they fill out the forms, usually to throw credit reference companies off their trail, and once they take possession of a property, you will have a fight on your hands trying to evict them.

How can I prevent this from happening to me?

I have said this before but it still bears repeating: always, ALWAYS run thorough identity checks and credit checks on a prospective tenant, and check out references from their current landlord as soon as possible. Just because they look respectable, it does not mean they ARE respectable! Trust your instincts and if you find any irregularities, consider refusing their tenancy application—it is better to be safe than sorry!

Given the amount of publicity recently about local authority crackdowns on the activities of rogue landlords, you might be forgiven for thinking that any landlord with half a brain would make a point of adhering to legislation and treating their tenants fairly. But apparently this is still not the case and in a news report I read the other day, another landlord has been forced to pay the price for not playing by the rules.

The landlord in question rented out a property in Reading to multiple tenants, only he never managed to find the time to carry out essential repairs and make the place liveable. The property was described as “rundown” by council officers and despite numerous requests for information, the landlord failed to reply. Tenants were forced to put up with damaged electrical sockets and smoke alarms, a faulty gas supply to the property that left them with without hot water, heating or cooking facilities, plus sections of plasterboard were missing from the ceilings.

Following a lengthy investigation, the landlord was found guilty on twenty charges related to his property and fined £665. Because he subsequently claimed that he was unable to pay, the court imposed a day’s stint in prison, to run concurrently with a separate sentence dealt out for drugs related offences.

Personally I think that sentencing the landlord to a grand total of one day inside is fairly pointless, but I suppose it is better than nothing and at least it sends out the message that local authorities will not stand by while rogue landlords abuse their tenants.

The Government has been discussing new amendments to Tenancy Deposit Protection arrangements for a while now, with a view to introducing the changes as of April this year. These amendments are designed to protect tenant’s deposits and landlords need to make sure they are fully aware of the changes so that they do not fall foul of the law.

What are the key amendments to the Tenancy Deposit Scheme landlords should be aware of?

1. The new changes come into effect from 6 April 2012.

2. Landlords have thirty days from receipt of the deposit to place it in an approved deposit protection scheme.

3. Landlords must give their tenants essential information about the Tenancy Deposit protection scheme within the same 30-day period.

What happens if landlords fail to comply with the requirements of the Tenancy Deposit Protection scheme?

If you fail to comply, your tenant can take you to court and you face being fined. The amount of the fine you may be liable for is down to the discretion of the courts, but it can be anything up to three times the amount of the original deposit, and this penalty will be payable even if you are just a bit late dealing with your tenant’s deposit. You will also lose the right to serve a Section 21 Notice until you return the tenant’s deposit or the claim has been settled one way or another.

For those of you who would like further information on this important subject, check out the website for the Department for Communities and Local Government (DCLG).

As a landlord, are you aware of your responsibilities when it comes to electrical safety? Well according to the Electrical Safety Council, a lot of landlords are blissfully unaware of issues surrounding electrical safety in rented accommodation, and with the numbers of private tenants in the UK disproportionately affected by electrical shocks and other electrical hazards, this is rather worrying!

Although most landlords are fully aware that gas appliances must be regularly checked and maintained, far too many are ignoring the dangers of dodgy wiring and potentially lethal electrical appliances. Indeed, a staggering 29% of landlords admitted that they had no idea whose responsibility it was when questioned.

So who IS responsible for taking care of the electrics in a rented property—landlord or tenant?

The law is very clear on this: landlords are responsible for ensuring all electrical installations and wiring is safe throughout the duration of a tenancy agreement. This means that you, the landlord, must have made sure wiring is up to scratch and all electrical appliances have been checked and are safe to use. Tenants are responsible for any electrical gadgets and appliances they bring with them, but they should tell the landlord if anything is amiss with the electrics during their tenancy.

What happens if a landlord fails to adhere to their responsibilities?

If you are subsequently found to have been negligent with regard to electrical safety, you could be prosecuted and fined up to £5,000 per individual count, or even imprisoned if the offence is deemed to be serious enough.

Although most tenants rent homes for the purposes of having somewhere to live, an increasing number of criminal gangs are renting properties for the express purpose of turning them into hothouse cannabis farms. Landlords and neighbours are usually blissfully unaware of what is happening inside the property, and while the rest of the street is going about their daily business, the criminals could have as many as three hundred cannabis plants thriving under sophisticated watering and light systems with one or two illegal immigrants living in the properties to tend the crop.

Rental properties used for growing cannabis often fly under the police radar, although I did read in the papers a while back that police have had some success spotting illegal cannabis farms using heat surveillance technology installed in helicopters—cannabis farms stick out like a sore thumb thanks to the huge amounts of heat generated by the specialist lighting systems.

In one recent case, a landlord was alerted to a suspicious humming noise emanating from one of his properties and when he called round to see what was causing it, he discovered more than three hundred cannabis plants thriving amidst some expensive growing equipment. The young man in residence was subsequently arrested and jailed for two years, although he claimed he had been forced into the scheme in order to work off a debt to a criminal gang.

So the moral of this story is keep a close eye on your tenants and their activities! Check up on them regularly and if neighbours start making complaints about strange noises, investigate immediately.

The majority of landlords probably assume they have enough information about prospective tenants before they agree to let one of their properties, but in the case of one landlord, he had no idea he had rented a house to the family of a radical Muslim cleric, and it was only when the press began harassing him in search of information that the penny dropped.

The London landlord, who cannot be identified thanks to a court order protecting his privacy, was plunged into a Kafkaesque nightmare when inquisitive journalists made the discovery that the family of radical cleric, Abu Qatada, was living in one of his rental properties. As a result, the poor landlord suddenly became the subject of intense press scrutiny with reporters hounding him day and night.

How had this happened?

When he let his property to a single mother with four children, the landlord was unaware the family were related to Abu Qatada, but unfortunately, when Qatada was released on bail on 13th February this year following a lengthy battle fighting his deportation order, he chose to go and be with his family at the now infamous property in London.

Of course it wasn’t long before the press got wind of Qatada’s location and within two days, journalists were telephoning the landlord constantly and virtually camping on his doorstep, which meant he was forced to ask for help from the courts. Thankfully, by the evening of February 15th, a judge had imposed reporting restrictions to protect the landlord’s privacy.

So the next time you let a property to an innocuous looking family, ask yourself, are they really Miss or Mr Ordinary?