2.74 million
The total number of unincorporated landlords that declared income from renting a property from 2020 to 2021 was 2.74 million (HM Revenue & Customs, 2022)
Are you looking to learn how to be a landlord in the UK? We get a lot of first-time landlords investing in our premium investment properties all around the country and often we’re relied upon to offer advice and guidance, especially when we help our clients become landlords for the first time.
Whether you’re investing in residential, off-plan or student property will have some bearing on your best course of action but, broadly speaking, there are many things that are universal to all UK property investors and landlords and we’ll take you through some of them in this guide.
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This can probably be split into two categories, what are you legally responsible for, and what is considered to be the responsibility of a courteous and professional landlord.
In terms of your legal responsibilities, the government website lists these pretty succinctly:
First and foremost you must keep your property safe and free from health hazards. This extends to ensuring all gas and electrical appliances are safely installed and maintained. This means you must have them inspected by a qualified safety assessor at least once a year.
You must also provide an energy performance certificate for the property to ensure it adheres to all the correct local and national standards, as well as let tenants know whether the property is economical to run.
You must ensure that your tenant’s security deposit is protected in a government-approved scheme, as well as check they have the right to rent a property if it’s in England.
You must provide your tenant with a copy of the How to Rent Guide at the start of the tenancy, and you must ensure that the property has fitted and working smoking alarms and carbon monoxide alarms.
For flats and student properties, you will need to adhere to all local and national fire safety regulations. These can vary depending on the property type but can be found on the government website.
You must also ensure that you pay all appropriate taxes on your rental income as well as any money you make from the increase in the price, or sale, of the property. This is best discussed with a qualified accountant if you’ll be doing this self-employed.
We’ve listed above what you need to provide legally, but it’s certainly worth considering what responsibilities fall to you as a courteous and responsible landlord.
When we mention being a courteous and responsible landlord, often there can be things that you’ve not considered in terms of the maintenance and running of the property, for example, if a boiler or electrical appliance malfunctions do you know a reputable tradesman able to carry out the work in a timely and professional manner?
Ultimately, the extent of your involvement is up to you. With the right arrangements in place, you can enjoy the financial benefits of property ownership while taking as much or as little of a hands-on role as you’d like.
From 2025 you’ll need to ensure that your property is at least a C-rated energy-efficient property in order to let it out. Currently, the rules state that a rating of ‘F’ or ‘G’ is legally ineligible to be let out, but this is soon changing.
You should check this before purchasing or planning to renovate a property as it may affect the long-term cost. One reason why off-plan or purpose-built student accommodation is popular is because they often have the latest technology in place to ensure adherence.
Keeping on top of all of the laws, legislations and rule changes can be daunting, but if you’re feeling overwhelmed there may be a solution…
The responsibilities that come with being a landlord can be extremely overwhelming, however, there are alternative methods for a more hands-off approach. Lettings agents offer full property management services, allowing the landlord to take a step back and leave the day-to-day work to the agency instead.
Lettings agents will take care of everything, including advertising your property, finding tenants, dealing with maintenance issues and solving disputes. Before a tenancy, lettings agents will cover things like vetting and referencing potential tenants before any tenancy, drafting all of the necessary documentation such as tenancy agreements and tenancy deposit agreements, securing the tenant’s deposit and storing it securely.
During the tenancy, a lettings agent’s responsibilities include facilitating the quick move-in of tenants, ensuring the property adheres to all necessary regulations, collecting rent on time and in full, and responding to any maintenance issues quickly.
Many landlords, particularly those with multiple properties, prefer to work with property management companies that handle all day-to-day tasks. These include dealing with maintenance issues like boiler problems or water leaks, and managing tenant renewals and paperwork. Property management is often surprisingly affordable, allowing landlords to take a hands-off approach, while still enjoying strong passive income and capital growth from their investment.
Being a landlord in the UK is an extremely profitable avenue to pursue. The UK property market has performed extremely well in recent times, and whilst prices are set to drop this year, rental values are showing no sign of slowing down. According to the ONS, rental values in the UK have increased every single month since August 2021, and JLL expected this incredible growth to continue over the next 5 years.
With house prices dropping through the year, 2023 offers investors an excellent chance to purchase a property at a lower price before seeing the value rise over the next few years whilst they benefit from record-breaking rents during the same period.
If, as a landlord, you intend to increase the rent on your property, then there are things that you need to do first. If it’s a period tenancy that’s on a rolling basis – say weekly or monthly – then usually you can only increase the rent once per year.
If it’s a fixed-term tenancy then you can only increase the rent at the end of the fixed term or if your tenancy agreement allows this inside the fixed term.
Again, this is something worth outsourcing to an agency if you can, as they have templates ready to go that cover you for most eventualities in a tenancy agreement, including in the unfortunate event that you need to evict somebody.
No, you do not need any specific qualifications or a degree in order to become a landlord. You will, however, be required to carry out certain inspections on your property as well as meet all legal responsibilities mentioned above.
If you have any queries regarding the responsibilities or regulations that come with being a landlord, feel free to get in touch with us today for more information!
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