What Defines a Landlord in the UK?
A landlord is the owner of a property that is used by another for a fee. The person using the property is known as the tenant, and their arrangement is referred to as a rental agreement or lease. This arrangement can apply to houses, flats, condominiums, land, etc.
Fun Fact: an Australian landlord was once loved so much that when he passed away his tenants erected a statue in his memory.
What are the Main Steps for Becoming a Landlord in the UK?
- Choose your property: It’s a good idea to make a list of qualities you require from your property to help you stay focused and objective when buying. Also, try to push aside your personal preferences as you will not be using the space yourself. Do consider the location of the property as well, particularly in relation to the needs of your potential tenants.
- Shop around for reasonable buy-to-let mortgages: Of course, you’ll be looking to get the best deal possible, so you want to make sure you’ve explored all options. As buy-to-let mortgages are typically more expensive than your residential mortgage, you’ll want to choose one that won’t stretch your budget too far just in case you need to pay any expenses or cope with a ‘void’ period in the future.
- Register with a licensed estate agent: Your estate agent can not only help you find tenants, but will also be able to assist you throughout the duration of the tenancy agreement. They can offer you a great deal of support and a wealth of knowledge when it comes to being a landlord and abiding by the current legislation.
What is Required by Landlords in the UK Before Renting?
- Make sure that you have a proper form of tenancy agreement: The tenancy agreement is necessary to make sure that you and your tenant share an understanding of the terms of the agreement. Both yourself and the tenant should have a copy of this agreement to refer to throughout the tenancy.
- Landlord Inventory: This document will outline exactly what is within the property, and the condition of said items. This is extremely important to avoid disputes about damage when the tenancy comes to it’s end.
- Request a Deposit: It is recommended that you acquire a deposit from your tenant when they move in, usually with their first rent payment if not before. This will protect you from having to pay for any damages, or act as consolidation in case your tenant leaves without paying the rent. Some agents will handle this for you.
- Prepare the Space: Before your tenant moves in, you need to prepare the property. You should redirect your mail (if necessary), arrange for utility accounts to be transferred to the tenant, and organise for the council tax to be paid by the tenant. You will also need to prepare some spare keys, instructions for appliances, demonstrate how to use safety equipment, and provide a list of emergency contacts for issues within the property.
- Know the Rules: These will vary between tenancies, but most landlords will use similar sets of rules which require their tenants to be reasonably quiet, not smoke in non-smoking areas, etc. However, as their landlord it’s important that you know your rights, and are aware of the action you can take should your tenant cause you trouble.
Decorating Tips for Landlords
- Don’t go the extra mile: If you’re planning on renting to students or professionals, then it’s a good idea to provide basic furniture. However, if you’re likely to be letting to families then they’ll probably bring their own. When viewing a property, people will generally want to picture their own personal possessions in the space, so keep furniture and decorations to a minimum. Also, do remember that the more you provide; the more you are responsible for.
- Think long-term: Wear and tear is inevitable but you can minimise the level of redecoration between tenants by making smart choices. The keys words here are durable and practical, so you’ll want to opt for the pricier flooring and bathroom fittings to save in the long-term.
- Little tricks: Potential tenants will be searching for a bright and well-kept rental. To achieve this, make use of tiles or laminate as opposed to carpet, and avoid lighter colours that will show dirt or age. Mirrors, as well as smaller furniture, can also be used to make spaces appear bigger.
How to Stick to Landlord Guidelines in the UK
While it’s important that landlords do their homework, they should also take advantage of a licensed and experienced estate agent who is registered with ARLA Property Market, NAEA, or any other valid membership scheme. Regardless of your understanding or experience, an estate agent will be able to provide you with decades of knowledge and expertise, as well as complete support throughout the letting process. The estate agents will also have the right connections to assist with any issues or requirements.
Costs to Expect as a Landlord.
- Agency fees: Agent will require a fee but their level of expertise is is completely worth the price.
- Gas safety inspections: This is an extremely important annual check to make sure your tenants are not at risk from carbon monoxide poisoning.
- Legionella inspections: This is important to detect the presence of the legionella bacteria which can cause pneumonia.
- Void periods: Void periods are when your property is lacking a tenant.
- Maintenance: Keeping your property in a good condition can eat away at your money; this is why is a good idea to decorate wisely and minimise this cost.
- EPC: Before letting out your property, landlords in the UK will need an Energy Performance Certificate to assess how efficiently your property uses energy.
- Furniture: Depending on who your property is likely appeal to, you may need to provide furniture for your tenants.
- Tax on income: When making a profit on renting your property, you will be required to pay tax; the amount of which will depend on personal circumstance and the extent of the profit you are making.
Current Tax Laws for Landlords in the UK.
We recommend using an accountant to advise on the relevant tax implications. However, information can also be accessed from:
You can sign up to these sites for daily updates regarding the industry and the latest information.
How Petermans can Help Landlords
We provide our landlords with the support and knowledge to make sure they are protected as well as satisfied with the results. Petermans can not only help you find the perfect tenant, but will also market your property to a high standard with provided professional photography. We also offer a completely free and no obligation valuation service, while our associated property litigation team can assist with legal advice.
Petermans have over 50 years of experience in the property industry and a team of experienced and locally knowledgeable agents. As an independently-owned and family-run business, we treat each of our clients as individuals and prioritise their needs and concerns.
For more information on what we can do for landlords in the UK, please visit our landlord pages with advice for becoming in landlord in West Dulwich, Edgware, and Herne Hill. Petermans’ personal approach to our clients is what sets us apart from the crowd. To begin your landlord journey, contact us today at +44 20 7733 5454 or email us at email@example.com.