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Setting out to become a private landlord

Mon 5th Aug 19

Today, there are many ways to become a landlord. Whether you’ve bought a property that you’re planning to buy-to-let, you’re renting out a single room in your home, or you’re letting via Airbnb, as a landlord you have a list of responsibilities – some legally binding – that you need to follow.

There’s lots to remember, and our guide to starting out as a private landlord can help. Remember, though, it’s not exhaustive and we’ll be adding more information to our information for landlords into the future.

What is a landlord?

A landlord is anyone who rents out a property they own under a lease or a licence that is shorter than seven years. hse.gov.uk

Becoming a landlord

There are around 2.5 million landlords in the UK, letting around 5.45 million homes as buy to lets or shared houses. What’s more, demand for rented accommodation is on the up. According to Price Water House Cooper, compared to the late 1990s, 25-34 year-olds are now disproportionately less likely to purchase a property with a mortgage, and more than twice as likely to rent privately.

Letting out property can generate a fairly easy income, too, as there’s a healthy demand for rental housing.

Your responsibilities as a landlord

As a landlord, you’ll have a list of responsibilities to keep in mind, enabling you to look after both your tenants and the property itself. Your responsibilities will depend on where in the UK you are, and those listed below are generic to every landlord. 

Health and safety

To be legally compliant, you’ll need to make sure that electrical and gas safety checks are completed and that you have the paperwork to prove it. You’ll need to arrange an annual visit from a Gas Safe Engineer to obtain a gas certificate, and it’s also recommended that you have all electrical appliances PAT tested every year. In Scotland, you’re required to have an electrical safety inspection at intervals of no more than five years apart.

It can also be a great idea to carry out a fire safety check and you should definitely do this before your tenant moves in. Fitting fire alarms on every floor of your property, as well as extinguishers and blankets if you’re letting out to multiple tenants and there will be shared areas, such as the kitchen, are legal requirements, so you’ll need to make sure you’re compliant here.

You’re also legally obliged to also install carbon monoxide testers. Carbon monoxide alarms are recommended, especially in rooms that include appliances that burn solid fuel.

As a part of your checks, you must also carry out a Legionnaires Disease risk assessment.

HMO licence

You’ll need to apply for a House in Multiple Occupancy (HMO) licence, via your local authority, if you’re renting your property to three or more unrelated people. These may only last for three years, so don’t forget to make a note to renew them before they expire.

Furniture and appliances

If you’re letting out your property with furniture and appliances in place, you'll need to make sure they’re in good condition. This may mean you need to replace or repair them from time to time.

Energy Performance Certificate (EPC)

Wherever you are in the UK, you’ll need to have an EPC, provided by an accredited Domestic Energy Assessor. The EPC will show how energy efficient your property is – from A (most efficient) to G (least efficient).

Your property must be rated at E or higher to be eligible to rent out in the UK. You’ll need to provide a copy of the EPC to your tenants so that they know roughly how much it will cost to maintain and, if your property is in Scotland, you’ll need to display the EPC somewhere in the property itself.

Accessibility

If your tenant has special needs, you may be required to adapt your property, making ‘reasonable adjustments' as laid out in the 2010 Equality Act. The Equality Act 2010 forbids unlawful discrimination, including refusing to let your property based on a protected characteristic, such as disability, race, religion, gender reassignment, sex and sexuality.

Tenancy agreement and other documentation

As the landlord, you’ll need to put a tenancy agreement – your contract with your tenants – in place, setting out the terms and conditions that you expect your tenant to follow, including when they should pay the rent and when the tenancy will end. There’s other literature you’ll need to pass on to your tenants, depending on where you are in the UK. In England, you’ll need to give your tenants a copy of the How to Rent guide from the government. You’ll also need to keep documentation that proves you’ve checked your tenants are over 18 and that they have the right to live in Great Britain.

In Northern Ireland you must also provide your tenants with a Rent Book.

Tenancy deposit

You’ll also be responsible for keeping the deposit your tenant has paid in a Tenancy Deposit Protection Scheme and you’re obliged to transfer the deposit into the scheme within 30 days, giving your tenant details of this. Your letting agent can help you with this.

Insurance

As a landlord, you're responsible for arranging insurance to protect your property against accidental damage. Your tenant, however, will need to arrange their own contents insurance.

Accreditation

You’ll need to ensure you’re registered as a landlord with your local authority and it’s a good idea to join an accredited organisation, such as the National Landlord’sAssociation, as well. In Wales, you’ll also need to be registered with Rent Smart Wales, in Scotland you must join the Landlord Register, and in Northern Ireland you must register with the Landlord Registration Scheme.

Letting your property and your mortgage lender

Before you let out your property, you’ll need to apply to your mortgage lender for a ‘consent to rent’ agreement. This may result in your mortgage repayments costing more. A buy to let mortgage may be worth considering.

Your rights as a landlord

Your main right as a landlord is your right to have your rent paid and, if your tenant breaks the contract before the end of its term, you have the right to collect the remaining rent from them. You can bring legal action if they don’t pay.

You may also, in some circumstances, have the right to request for the tenant to leave the property.

Remember, as soon as you have let your property to your tenant, you no longer have the right to enter the property whenever you’d like to. Instead, you’ll need to give your tenants 24 hours’ notice that you’re coming.     

Setting your rent

The rent you’ll charge for your property should be determined based on the costs of the property that you need to pay each month, and also on the competitive marketplace.

You’ll need to do some research, checking out the rental charges for similar properties in your area. Be realistic and do take into consideration the number of rooms you are offering, the state of your décor and if there are any additional features. Websites such as Zoopla include an estimate of the rental income your property may achieve.

Welcoming your first tenant

Once your tenant has signed your tenancy agreement and they’re set to move in, it’s a good idea to carry out any last minute checks on your property, including a risk assessment. This will allow you to get anything fixed before it becomes an issue.

You can walk through the property with your tenant on the day they’re moving in, and give them a copy of your inventory, allowing you check together that everything is in place and in good working order. This is particularly good practice, helping things to run smoothly when your tenants eventually move out.

You’ll also need to leave your contact details with your tenant, so they can contact you in case of any problems or concerns.

Insurance for landlords

It’s a good idea to take out insurance for your property and it's your responsibility, as the landlord, to insure it against damage such as fire and flood. A regular home insurance policy will cover many aspects, but a landlord’s insurance policy will offer you additional covers to ensure you’re covered if your rent isn’t paid, and for any additional liabilities. This means that you’ll be covered if a tenant is injured in your property and tries to sue you.

Other covers a landlord’s policy may include are loss of rental income, alternative accommodation cover, accidental damage cover, contents (if you’re letting your property with furniture included), employers’ liability cover (if you employ cleaners or other staff).

Finding out more about landlord’s insurance with Ryan's

At Ryan’s our teams work with you to make sure your rental property and your investment is properly covered. To find out more, contact our Enterprise Division on 01473 343491 today.

In our next article for landlords, find out more about setting up for short-term letting, including Airbnb.