According to Paragon Mortgages, ‘accidental landlords’ are providing a welcome boost to the supply of housing at a time of very high demand for private rented homes.

However, John Heron, Paragon’s managing director, said that many of these landlords may be ignorant of the large number of regulations involved in letting property. It is estimated that there are more than 50 Acts of Parliament and 70 sets of regulations governing the private rented sector and so landlords risk fines if they don’t comply with the necessary legislation.

Heron said: “ The onus is on the landlord to make sure they comply with all regulations and they are liable if something goes wrong, even if they employ the services of a letting or managing agent. Ignorance of legislation is not a defence.

“People that are letting out properties they have been unable to sell are unlikely to have a detailed understanding of the legal requirements they have to comply with. For example, do they have an Energy Performance Certificate for the property or do they have a Gas Safety Certificate? What have they done with the tenant’s deposit and have they got adequate insurance in place? Failure to comply with certain regulations could not only result in heavy fines, it could also mean a custodial sentence.”

In addition, owner-occupiers could contravene their mortgage conditions if their lender does not know they are letting their property, which could have a knock-on impact on tenants if the property was repossessed.