LANDLORD LICENSING AND REGISTRATION SHOULD BE CENTRALISED SAYS LETTINGFOCUS.COM

John Blackwood, a director of the Scottish Association of Landlords tells me he knows of many landlords who have just had their applications for the Scottish landlords register acknowledged and licenses issued by their local authorities – almost three years after they applied for them!
If the government goes ahead with similar proposals in England and Wales, will our local authorities or whoever administers it be as inefficient I wonder?
Perhaps, as Mr Blackwood suggests, it would be better to have a single central authority managing the scheme rather than having the whole thing handled by different town halls with varying level of efficiency.

BUT DO WE REALLY NEED LANDLORD LICENSING?
I would say if we must have it, then it must be enforced in a way that really drives out rogue landlords.
But let’s stop and think.
Who are these bad landlords, who do they prey on and how do they get away with it.
I suggest that a lot of these guys are letting to people in overcrowded accommodation.
I suggest that many of their tenant victims will be people who don’t know the law or who are not confident enough to stand up for themselves for fear that they will be evicted and wont find it easy to get another place to live.
Partly this will because they have a poor credit history (or none at all). I suggest many will be migrants, possibly illegal migrants with little English and perhaps also dependent on their “landlord” for a job.
Now let’s look at the position of a tenant who is not vulnerable but who has a poor landlord.
If this tenant’s landlord fails to carry put basic repairs or meet his landlords’ obligations under the law, the tenant can complain about their landlord and try to enforce their many rights.
OK, it is true, their landlord could carry out a retaliatory eviction at the end of a fixed term contract, but good tenants will soon find a good landlord. And they will know what signs to look for next time.

GOOD LANDLORDS AND GOOD TENANTS TEND TO GET TOGETHER
Personally, I like it when tenants come to me if they are good people but their previous landlord was the sort who could never quite get round to fixing the boiler or sort out the damp problem because I know they will really appreciate me.
The fact is that bad landlords end up with bad and vulnerable tenants and good landlords end up with good tenants and vice versa.
What licensing must do, if indeed it becomes law in England and Wales, is have in place very tough sanctions on those landlords who make VULNERABLE tenants lives a nighmare.
That must mean heavy fines which are enforced fast and a wide publication of the scheme especially among the most disadvantged.
But for goodness sake, leave good landlords alone.
And allow the good landlord to get rid of bad tenants too – and much faster than is allowed under the cumbersome court processes of today.

MORE TIPS ON USING A LETTING AGENT
Make sure you know the law. I know the law is deadly boring but as a landlord you are running a business and this means there are some things you legally have to do and some things you mustn’t do. And if you don’t comply you can face fines and even go to prison.
“Ah”, you say. “But if I’m using a letting agent they will deal with all the legal issues and my landlord responsibilities right?” Well, possibly yes, but don’t bank on it. Some agents still operate without any liability cover and are not part of any bonding scheme. If they go bust how long will it be until you hear about that? A few months, a year maybe?
And what would happen to any rent they were collecting for you in that time and all those gas checks that they are supposed to arrange for you?
So, you have to know the law (see chapter X) and occasionally check that they are doing what they should be doing for you as your agent.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too. And find out about OTHER great deals we have arranged at our Property Affiliate page. More wil be added over the next month, once we have checked them out.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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Choosing Letting Agents / How the UK’s dopey banks made a mess of buy to let mortgage lending by David Lawrenson

Following on from last weeks’ blog, where I said landlords are not suffering too much, it seems that some landlords are suffering after all – even in the face of record low interest rates.
Latest figures from the Council of Mortgage Lenders now show investors’ arrears rates are significantly higher than for standard residential.
So, what’s the truth?
Well, the truth is there are landlords and there are landlords.
Unfortunately, lots of would-be landlords did not do their research and believed all the hype spun by the many Get Rich Quick gurus and have gone on to make a complete muck up of it – bankrupting themselves in the process.
Many of these will have been to a guru’s seminar and went out and either bought existing housing with No Money Down from distressed sellers using bridging finance with a back to back next day remortgage or they bought new build ghetto flats with gifted or hidden deposits.
Both techniques have finally been stopped as the UK’s rather dozy mortgage lenders finally woke up to the fact that they had in fact just lent on 100% of the property’s value (or at least what the buyer paid.)
(Many borrowers would also use credit cards and loans for non existent kitchens to finance deals.)
With little understanding about how to be a landlord quite a few of these would-be investors got into trouble - and therefore so did the banks and building societies that lent them the mortgage cash.
On the other hand, landlords and property investors who ignored the hype, hopefully the type who read my property investing book – and listened to informed experts of the likes of Richard Bowser, Tom Entwistle and myself at property shows will have done rather well.

BUT WHY WERE BRITAINS MORTGAGE LENDERS CAUGHT OUT ON BUY TO LET?
That’s a very good question.
At a recent seminar I heard from John Corey, an American property expert about how in the USA, the types of techniques that borrowers were pulling here to raise big buy to let mortgage loans in which the borrower had no equity, had long been known to mortgage lenders and had either been stopped by law or through the use of intelligent underwriting techniques.
For example, by requesting up to a years worth of bank statements the American lenders could really assess a borrower’s true financial position. In the USA, it would have been impssible to raise say, £25K on a loan for something else one month and then use it as a deposit on a house the next month.
But in the UK, these kinds of things and many other sneaky tricks went on for years.
I suspct that many mortgage lenders in the UK did not have a clue about back to back re-mortgaging as a technique for someone to acquire a property with “No Money Down.”
OK, by sometime in 2006 and 2007 they had all finally woke from their slumber and have now stopped this kind of thing.
But if you get a buy let mortgage loan today, you will still walk out of the bank with virtually no help, no guidance or anything else to help you be a good landlord.
Unless you have read the right stuff you will have a good chance of becoming another arrears statistic on their buy to let loan book a few years hence.
A few years ago I contacted some senior figures in some of the banks (not easy – even getting their names is hard enough) and suggested that as a leading property author I could help them correct this failing. I’m still waiting for the call back.

MIND IF WE KICK YOU AGAIN SIR?
Don’t tell my partner but I have subscribed for most of the rights issues in the shares I have.
Many of these shares are well down on what I paid for them, so it’s a bit like asking a mugger if he would like to hit you and rob you again.
But the shares are all very heavily discounted and I figure that after the RBS’s famous 200 pence a pop rights issue surely, no one would be allowed to put out a rights issue prospectus which was so clearly full of nonsense.

TIPS FOR USING LETTING AGENTS
Don’t go with the letting agent that charges the lowest fees or one who claims he can get the highest rent. It is important yes, but not the only thing that counts. If the agent says they can get a premium rent. Fine. Ask them to prove what rent they have achieved for properties like yours by showing you comparables.
Ask other landlords which agents they use and trust. Then check if the agent is a member of a recognised trade association such as The Association of Residential Letting Agents which has a code of practice for members and client money protection schemes in place. Others bodies offering similar protection include The Royal Institution of Chartered Surveyors and the National Approved Lettings Scheme.
Landlords should check what protection the agent’s membership of a trade body gives them and if the agent is really still a member.
True, there are some very good and long established agents who are not members of any trade body for good reasons - like the very high cost of membership.
If you are set on using one of these, that’s fine, but make extra sure to check references and find out how long they have been in business.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for both accidental landlords and more experienced residental property investors and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting to anyone looking to buy property for themselves or to let.
What’s unique about lettingfocus.com is that we offer independent unbiased advice on renting out property because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier other than through the links we have on our affilate scheme page. Find out about some great deals we have arranged at our Property Affiliate page.
For landlords' insurance products such as rent guarantee cover and property insurance click on Ukinsurancenet. Don't forget to quote our reference code, LFOC, to get the best rates from them too.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries and the bit where it says “Links” and “Subscribe” you will see a button saying “Site Feed.”
Just copy the site feed link into your News Reader or News Aggregator. Even a non techie like me managed to do this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require a link to the blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted.
WANT TO ADD A COMMENT
To add a comment to this post, you just click on “link to this post” then simply add your comment.
To view past comments, once again you’ll need to click “link to this post” and view the comments (which appear at the bottom of the post.) All comments are moderated.

Take care referencing and checking tenants even if you use a letting agent says LettingFocus.com

So far the credit crunch has not led to any large increases in unemployment.
However, I see the press is now carrying more stories of lay offs here and there - so we can expect some rises in unemployment to start to filter through to the official figures before too long.
How does this affect landlords?
Well, I would say that today more than ever, you need to make sure that the tenants you get are good ones and are fully referenced plus that they are in the type of sector of the economy where they are less likely to lose their jobs.
Why?
Well, if they lose their jobs they may struggle to pay the rent and / or have to move to less expensive accommodation – which is bad for them and whichever way you look at it, also means more hassle and expense for you the landlord.
In the worst case, it could also mean that they could stay put and just not pay any rent at all – meaning you have to seek repossession - and that process can take months, often with little chance of you ever recovering the money owed.
In the current environment, if I had to choose between equally good tenant candidates – one of whom worked in an economically shaky sector and another who worked in a (usually) slightly safer public sector job as a teacher or a civil servant, I know which one I would sooner go for.
Yes, it’s tough on some – but hey I’m not the one who was responsible for the state the economy is supposedly in.
Also, if you use a letting agent, don’t fully trust to new agent on this issue unless you have used them for a while and know they are reputable and can be trusted on this.
Sadly, there are a few rogue agents out there who cut corners on referencing and don’t do it properly.
Remember it will be you, not the agent, who is the one who loses out financially if the tenant turns bad.
So ask the agent to let you see references they obtained.
And don’t listen to all the guff some letting agents will give you about the "Data Protection Act and that you cannot see the references, the reference report of the tenants application form" because your tenant should have authorised for you, the landlord, to see the references on the application form he filled in when applying to rent the property.
If your agent won't let you see these things, go to one who will.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of landlord advisors lettingfocus.com.
I’m the author of “Successful Property Letting - How to Make Money in Buy to Let” which for the last 2 years has been the UK’s top selling property title - buy the UK's top selling property investment book.
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying property below market value.
I’m an expert freelance property journalist , property speaker and a well known property blogger
I contribute to newspapers and a host of property websites, write a number of columns in the press and I can provide landlords advice
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services and am a regular speaker at property shows.
You can read more of my blog & find details of my networking, advice, property investors networking programme at my website.What’s unique about lettingfocus.com is that we offer property investment mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, a developer, an agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2008. This blog is updated once a week.
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