LANDLORD STARTER PACK
Taking the first steps as a landlord can be both exciting and daunting.
With over 150 Acts of Parliament to keep track of it may be difficult to know where to start, particularly if you are one of the many who become 'accidental landlords' through inheriting a property or moving in with a partner.
This page is designed as a primer for landlords taking these first steps in England. Whether you have chosen to invest or you are an accidental landlord, this guide will get you up and running on the path to being a responsible landlord. We provide clear guidance on the things you must do and downloadable templates and resources to help you do this.
Before you let your property
Preparation and planning before you let out the property is key to a successful relationship with your tenant. It gives you the chance to familiarise yourself with your obligations, decide on the type of tenants you want to let to and make any adjustments you need to the property to prevent issues arising later.
It also gives you the chance to properly vet any prospective tenants. Less than 10% of tenants fall into arrears in the course of a year and fewer than 1% of tenancies end through a landlord going to court. The odds are good that if you research your tenants they will be responsible.
What do I need to consider before marketing my property?
Before you can let our your property you will need to consider:
Who will you be letting the property to?
Who will manage the property?
What are my legal obligations?
Who will I let to?
Within the PRS there are a number of different types of tenancy that you can grant. The most common of these, and the one you will find it easiest to find advice for is the assured shorthold tenancy. This type of agreement will be the default where:
the rent is more than £250 per annum or less than £100,000 per annum; and
you don't live in the same building; and
you are letting to people rather than companies; and
your tenants will use the property as their main home.
Choosing your market
Along with the type of tenancy, you should also consider what your market is. The PRS is made up of a number of different niche tenant markets providing homes to groups such as students, young professionals and families. Each has their own specific need and in some cases additional rules.
Which one you choose will depend on the location of your property. However if you have the opportunity, your responsibilities will be lessened if you rent to a family. This is because most of the other markets are 'houses in multiple occupation'; homes where the sharers are not related and you have additional legal responsibilities.
The rest of this guide assumes you are choosing to rent to a family.
Who will manage/market the property?
Self-management is appropriate for landlords who live close to the property and have the time and knowledge to meet their obligations. Since most landlords have alternative employment and may not live locally, the use of agents is commonplace.
If you do choose to use an agent they can offer services ranging from marketing the property on online portals like Rightmove or Zoopla, to fully managing the property for you.
If you do decide to engage an agent you need to be aware that you
are ultimately responsible for their actions so it's important you choose a responsible agent for your property.
What are my legal obligations?
As a landlord you have a number of responsibilities relating to the condition of your property and your conduct towards your tenant. Most of these are best dealt with before you consider marketing the property.
If you are renting to a family, the key ones are:
you will need to provide a privacy notice explaining how you will use, store and dispose of any prospective tenants data
if you require a mandatory or additional HMO licence you must have at least applied for one and you must comply with the HMO management duties
if your property is in a selective licensing area then you should apply for a selective licence.
Finding a suitable tenant
Once you or your agent have found a prospective tenant you will need to ensure they are likely to pay the rent on time and not cause damage to your property. The best way of doing this is by checking their credit and renting history. NRLA members can access credit checking and discounted referencing services as part of the membership package.
You will need to collect quite a lot of information about your prospective tenants when you reference them. As it can also take a little time to verify the information they provide, it is common practice to ask a prospective tenant to pay a holding deposit to you while the referencing checks are performed. This holding deposit cannot be more than the equivalent of 1 weeks' rent.