Are you a new Landlord, or do you need information on new Legislation?
This page is designed to provide Landlord's with useful information and current legislation when letting their property.
Private rented sector markets and the relevant standards
When deciding to let you should consider what market you want to enter. Broadly speaking there are four PRS markets:
- renting to people on benefits
- renting to students
- renting to working tenants
- renting to professionals & higher end market.
The type of property you own and its location may determine the market you aim for. Different markets will command different rent levels and will require different standards of letting. Some of the issues that you might like to consider are:
- professionals will insist on higher standards and will expect showers and possibly en suite facilities
- housing benefit renters whilst commanding a lower rent are likely to be more stable renters – young professionals tend to be more mobile and may lead to higher voids and increased re-letting expenses
- renting to students sees higher occupancy rates which can maximise income, however they may not fully understand their responsibilities and may not look after the property as you would wish. Renting to students is also likely to bring with it regulation pertaining to Houses in Multiple Occupation (HMOs) and licensing
- student lets may not extend for a full year
- all renters will expect a high level of customer care from landlords with expectations generally rising in line with the amount of rent paid.
Permissions to let property
Any property owner who has a mortgage or is not a freeholder will need to secure the necessary permissions before they rent their property. If you propose to let a mortgaged property, or a room within it, you will require permission from the mortgage lender. It will be a term of that agreement that you get the lender’s permission before you let the property, even if you are just letting one room in it. This is because the mortgage lender will be concerned that you are not doing anything that may affect the value of their investment and their ability to recover the loan they paid you to buy the property. You will need to check the terms of your mortgage. For many Buy to Let mortgages, permission to rent the property may be automatic but there may be conditions on the type of let permissible.
Letting Options: Means of Managing Property
There are a number of options you might consider for managing the property, depending on your experience, skills and time. Each option has advantages and disadvantages but you should carefully consider which option is best for your particular circumstances.
P&K Lettings offer Landlord's the following options:
- Tenant Find Service
- Tenant Find Service and Rent Collection
- Full Management
Please contact us for further information on these services and to discuss your requirements.
Tenant Find Service
Available on request.
Tenant Find Service and Rent Collection
8% + VAT on all rent collected plus Initial Letting Fee of £150 + VAT.
Full Management Service
10% + VAT on all rent collected plus Initial Letting Fee of £150 + VAT.
Tax for 'non-residential landlords'
For landlords who live overseas (known for taxation purposes as ‘non-resident landlords’) we are legally required to deduct the basic rate of tax from any rent we collect. Further details can be obtained from the HMRC website www.hmrc.gov.uk or by calling +44 151 210 2222 (if outside UK) or 0845 0700040 (if in UK).
Houses in Multiple Occupation (HMO's)
The Housing Act 2004 specifies what is a House in Multiple Occupation for the purposes of HMO management and licensing. It creates an overall definition of an HMO but only those on 3 or more storeys with 5 or more tenants sharing some facilities will have to be licensed. Certain HMOs require planning permission. The type of HMO that this applies to is different from the definition in the Housing Act. These Planning definitions changed in April 2010, but from the Autumn 2010, Local Authorities are now able to choose whether to enfore the requirement for Planning Permission of certain HMOs, and if so, whether this is over their whole district, or just in certain areas. Landlords of some HMOs have to pay the Council Tax for that property. The regulations putting this responsibility on landlords are contained in the Council Tax (Liability for Owners) Regulations 1992 as amended in 1993. The definitions of HMO for these three areas of legislation are slightly different and can cause confusion. A property could be an HMO for one purpose, but not another.
The following websites may be informative if you are thinking of letting an HMO: