Would you have ever guessed that your tenant could be turning your property business into cannabis plantations? Privately-rented residential properties across the UK are facing this menace and an ever growing number of landlords simply are unaware of this nuisance that is taking place right under their nose. A nationwide campaign is underway to cut down on the growing instances of cannabis plantation operations

In Scotland, the problem is so serious, that it now turns a profit of over £100 million, which is much greater than the revenue of Scotland’s entire farming industry.

Every month around £500,000 worth of cannabis is uncovered by the Scottish police, and more than 1,900 plants are usually recovered during this period.

As landlords, we need to try to get to grips with this as it is our responsibility to ensure that tenants do not use the rented property for illegal purposes.

In fact a large number of tenants who take part in these illicit activities are illegal immigrants in the UK. One of the best ways to forestall any problems is to insist on a government-issued identification before any lease is agreed upon.

We must play a key role in stopping these operations, as failure to do so not only leads to very serious damage to our property, but also results in violence and unsafe neighborhoods.

GMAC, one of the largest mortgage lenders in the UK who focused on residential property loans, now face the prospect of £10 million in fines. The property lender is being accused of overcharging its clients and now will have to make amends by returning a staggering £7.7 million in interest. According to the Financial Services Authority, the clients were forced to pay extra under unreasonable circumstances.

The FSA claims that GMAC went ahead with repossession procedures much before exhausting all alternative options. Some clients were charged unreasonable fees and interest despite of having successfully made payments on their loan. Those who were unable to pay their balance, their cases were forwarded to solicitors.

The FSA found that GMAC botched up the proper assessment of the financial situation of clients with outstanding debts, before looking for alternative payment solutions.

GMAC now has to pay £7.7 million to mortgage holders, apart from a separate fine amounting to £2.8 million. The mortgage provider will be required to also pay interest on the sum returned to consumers, so the £7.7 million amount will only end up being higher.

This ruling is sure to impact residential landlords and regular homeowners as GMAC has lent more than £12 billion each year to these two groups.

Landlords throughout the UK have faced a tough time over the past year, but those in Wales have been hit the hardest. Land Registry released figures showing the fall in the values of homes, which was around 5.6 percent in UK compared to Welsh towns and regions which suffered a 20 percent drop. A case in point is Neath, Port Talbot, where house prices fell by 18.7 percent. Homes in rural areas of Wales are commanding £20,000 lower than what it was just a year ago.

The rising unemployment has had a negative impact on the Welsh residential property sector as compared to other parts of UK. Port Talbot experienced severe recession with the closure of a major steel blast furnace.

Apart from these, other areas like Carmarthenshire also saw a decline of more than 11 percent, bringing about an average loss of £14,000 for landlords and homeowners. Houses in Wales that were going on sale also saw a 20 percent drop in their value. It will be some time before the property market gets back on its feet both in England and Wales!

Volatile times make everyone cautious. As landlords, the way forward for us is sensible risk management. Risk management is the key issue for private landlords in the UK.Malcolm Harrison of Let Insurance Services believes that rental insurance comes first when managing risk. Landlords need to take well thought out risks.

Landlords must gather good tenant references, although individual circumstances of the customers can change once the tenancy agreement has started. It is quite possible to get an amazing tenant for whom things can go awry during the period of the tenancy.

Earlier this month, LSL Property Services gave figures on the current trends found in the property market and the way rent rates are moving. It reported a 1.2 per cent rise in rent levels in the month of September which followed a 1.4 per cent increase in August in the UK. These figures are quite encouraging to an extent. But raising the rent is not what landlords are aiming for, by and large.

 It has been found that not all are trying to dramatically increase rent levels in the coming future. There is no doubt that the biggest challenge that we face as landlords in the current climate is to minimize voids.

Latest figures show that buy-to-let investors are back in action. Estate agents are reporting an increase in landlords buying property in the last three months.

However, investors are not snapping up city-center flats. There is an increased demand from buy-to-let landlords but the demand for flats has seen a sharp drop.

Yet, not all parts of the country have shown a revival. The Midlands have experienced a drop in demand. The demand was strongest in the North West with 29 percent more surveyors reporting a rise than a fall. The buy-to-let market was hit hard by the sharp drop in mortgage availability.

The recent Council of Mortgage Lenders’ figures showed a decline of 4 per cent on the previous three months, with only 21,600 buy-to- let loans being granted in the second quarter. The rise in buy-to-let investment is being attributed to higher proportion of investors making outright cash purchases than taking out mortgages.

Allsop, the UK’s biggest property auctioneer has been encouraging landlords to pick up repossessed buy-to-let stock.

Landlords are being driven to property due to poor returns from other investments. The private investor who has cash to invest is attracted to residential property for the prices are low compared to the peak in 2007. Residential property is being viewed as relatively rewarding by the current market.