I may well have mentioned something about this before but it is a subject I feel passionate about, insurance. It is such an imperative in so many walks of live but in the residential landlord’s market it is even more so.

Many landlords I know insure themselves against disasters to their property and to their contents, if they own things in the house such as in the case of renting fully furnished but many fail to cover themselves for liability. Frankly I find this astounding because an accident involving one of your tenants or their property, under the right circumstances, has more potential to leave you in financial ruin than any damage to property.

There is such a thing as specialist landlord insurance and I highly recommend going for one of these policies, they are literally made for people like us. I also recommend talking to your broker about your biggest concerns as the policy can also be tweaked to suit your individual needs. If you get a good broker with lot of the right experience they really do now what they are doing, make sure you shop around for the right broker and the right policy.

I have sometimes been critical of deposit schemes, especially when they go bust and leave everyone out of pocket but a story this week is a very positive one. Apparently The Deposit Protection Scheme has broken all records in protecting deposits recently after recruiting a huge number of new letting agent members.

Kevin Firth, director of the DPS is delighted with the way things are going for the industry in general and his particular company. He has had this to say

“When we launched, we were aimed at private landlords with small property portfolios. However, the DPS has proven popular across the whole industry, including large portfolio landlords and letting agents.We’re continually told by agents that tenants feel safer when their deposit is protected by a trusted third party rather than the agent or landlord – and they would prefer to choose an agent that has our sticker in the window.”

It is probably true that tenants feel safer when their money is protected by a trusted third party and actually landlords may well feel it is easier to hand the money over rather than look after it themselves. Hopefully the problems we have encountered were mainly teething problems and the The Deposit Protection Scheme will be a good thing for all concerned heading into the future.

Leaders Real Estate Agency are reporting that they are seeing a substantial increase in people wanting to invest in BTL properties. Most of us were aware that with the recent loosening of the bank purse strings for experienced landlords many were looking to expand a healthy portfolio. More surprising are reports that a lot of the enquiries are from people who want to invest in property for the very first time.

Leaders’ managing director, Paul Weller, says: 

“Buy to let finance is still not easy to come by, but the situation has improved slightly in recent months, with more mortgage products and better deals coming onto the market. This, coupled with the extremely high demand we are experiencing for rental accommodation, has prompted many investors to take a fresh look at buy to let.”

He further goes on to say that given the right guidance they are confident that buy to let is still a great investment. He may well be right. The predicted housing crisis is almost certain to put landlords in avery strong position should it eventuate.

The government does not seem, on the surface of things anyway, to be taking very strong measures to avoid a housing shortage so the chances of it happening are not decreasing any. The private sector could well be in a position to go from strength to strength, returning profits for its investors and providing housing to the nation. Let’s hope so, hey?

A leading body representing Buy To Let insurance policy holders has warned that the election could be used as an excuse to not support the growth of the private rented sector.

The Association of Residential Letting Agents (Arla) says that the majority of its members express concerns that this is exactly what will happen. Furthermore 58% of the members it surveyed recently said they felt the government’s approach to expansion will be the number one factor in the type of growth seen in the property sector over the coming year.

Arla is most concerned about what it calls ‘prohibitive barriers to further investment’ such as stamp duty. A spokesperson had this to say

“Landlords must be treated as the businesses they have now become and afford them the taxation criteria which will incentivise the improvement of stock, and therefore the conditions which tenants live in,”

The issue of stamp duty just will not go away and i feel its mere persistence will eventually force the government to review its policies.

Speaking of policies, the budget is shortly upon us. I expect there will be enough contained in there to provide this blog with talking points for a week. I, for one, am looking forward to seeing what develops. 

A company called IVA who, not surprisingly, are a debt consultation firm have this week released a statement saying that their figures show that more British landlords than ever are finding it very difficult to keep up with their buy to let loan payments.

They say that they base this conclusion on the large rise in the number of landlord’s who are seeking professional advice regarding how to handle their debt. Their figures show that this has risen by 53%.  The average landlord seeking this type of advice is between £163, 000 and 201,000 in debt and is typically several months behind in repayments.

The records kept by IVA indicate that a lot of these landlords have struggled to meet their commitments for quite some time and are now really starting to lose the battle.

The reasons for the difficulty have been well documented on this blog

•  High interest rate buy to let loans

•  Defaulting tenants

•  Periods of vacancy

It is sad to see that so many landlords are turning to this kind of solution though it was probably inevitable. We can only hope that this period of improvement is reflected in the very soon and some of these landlords get back on track.

According to an article in the Times online late last week there has been a fundamental shift in the power dynamic between landlord and tenant. According to the article in the last half of last year tenants held all the cards but that has rapidly changed with landlords once again in possession of the aces.

They point to the fact that all our reluctant landlord’s are happily selling up and getting out, as the reason for the shift. In addition those who would like to get into renting property are being blocked by the banks current scrooge like attitude.This, of course, reduces the number of rental properties on the market and makes it less of a buyer’s, or in this case renter’s market.

On the whole though I do not think that talk of power actually benefits us landlords in anyway. Tenants may be losing that battle at the moment but they are certainly winning the PR war.

For example the article sees the fact that we may well become a nation of renters if things progress in the fashion they are, slightly differently from those of us in the game. Whereas we tend to talk about the importance of protecting the sector that is likely to provide the housing for the nation, they talk about a country of renters needing far more security for  tenants.

The article writes off the ARLA’s concerns over new legislation and plans to have a Tripadvisor style website to rank landlords, as predictable.

Landlords need to take heed of the fact that they need to be careful with their image. The court of public opinion is a very powerful one, it changes laws and could well hit landlords in the hip pocket if they are not careful.

It is good to see the concern for the environment is starting to reach into all parts of our economy and recent figures show that the property investment market is going to be part of this.

There is a lot of interest at the moment from investors who want to put their cash into energy efficient and environmentally friendly real estate. What is more is, that at the moment at least, the motivation is purely concern for the planet rather than profit. Thomas Beyerle of Aberdeen Property Investors that despite the lack of any evidence that going green will lead to any actual profit increase, many investors are still keen to get involved. 

Apart from selfless concern for the environment another reason investors may be keen to ‘go green’ is fear of future punitive measures being taken by the government as they attempt to reduce carbon emissions.

In other words a green building may not mean extra money in your pocket right now but it is very likely to reduce the amount the government wants to take away from you in the future. A lot of British buildings are old enough that they have totally escaped any legislation to clean up their act. That is likely to change as legislations takes into account buildings retrospectively. Certainly anyone buying a new building ought to choose green.

Investing in green real estate may prove a canny move for the future when legislations starts making inefficient buildings pay up. It could also be a way to get a step ahead of your competitors.

It is great to get recognition and a statement released this week by a spokesperson for National Approved Letting Scheme has me feeling all warm and fuzzy. OK this group may have a vested interest but I believe that what they had to say is very accurate and bears thinking about.

One of the many items on the long list of things that landlords must do to secure the safety of their tenants is a regular boiler check. It now seems that failing to make that check can have quite dire consequences.

According to the Health and Safety Executive (HSE), a landlord was fined quite heavily after a boiler they failed to have checked flooded their tenanted property with carbon monoxide. Graham Barnes was ordered to pay nearly £10K in fines and costs for not having the gas appliances of his rental property properly checked.

HSE inspector Dozie Azubike said “the incident was a clear case of a property professional putting people at risk by ignoring his responsibilities. As a result of the boiler not being serviced, carbon monoxide leaked into the kitchen creating a very dangerous environment.”

Under UK law you are required as a landlord to have one gas appliance and boiler check carried out on each of your properties every twelve months. Not doing so can clearly cost you dearly as in the case of Mr Barnes.

I know I have said this before but it is not just the financial risks of ignoring safety legislation we have to worry about. If something did go wrong in one of your properties, causing severe injury or even death, then you would have to live with your conscience. For me, that is the scariest bit of all.

Three years ago, the fire safety laws changed radically but it seems that some landlords, and other businesses, are still not totally aware of how that affects them.

The Regulatory Reform (Fire Safety) Order came into effect in October 2006 and replaced over 70 pieces of fire safety legislation. The Order applies to virtually all buildings, places and structures, so there is little chance it does not apply to you.

The main thrust of this legislation is that the responsibility for fire safety lies with the employer or landlord. Therefore, it makes good business sense as a landlord to have a strong knowledge of the fire safety regulations. London Fire Brigade is saying that in their experience many landlords do not.

If you are an employer or have control over a premise (known as the ‘responsible person’ landlords fit into this category) then you are required by law to carry out a fire risk assessment and act on its findings. Simply to assume that everything is OK will not cut it!

If you are one of those people who think that you will never get caught out then it bears keeping in mind that London Fire Brigade carries out around 14,000 fire inspections of premises each year. If your premises are part of this inspection and they are found wanting then you could face very hefty penalties.

Even with that aside this is the safety of people we are talking about here and none of us want a tragedy on our conscience.