Guide to Letting

Being a landlord today requires significant work: from securing tenants, to collecting rent, complying with legislation, maintaining your property, and dealing with any issues that arise.

Property Trend’s 10-step Guide to Letting Your Property gives landlords a comprehensive overview of the various areas they need to address. Our lettings specialist can answer any further questions you may have and, if you prefer, we can manage the entire process for you.

 

1. Lettings valuation

Getting a fair rental income for your property in London is pretty straightforward. You can get an idea of the local marketplace by checking ads in local media and online property portals.

For a more accurate valuation, you can contact one of our property consultants: we’ll not only tell you the rental value, but also offer advice on modifications needed to prepare your property for letting.

Our rental valuation service is free and includes an onsite inspection. Other agencies may charge – it’s good to check before you book.

 

2. Can you let your property?

If you are a landlord with a freehold property with no mortgage on it, there should be no problem with renting it out. However, leaseholders need to check the terms of their lease to see if they can sub-let the property. Similarly, those owing a mortgage should speak to their lender first.

 

3. Preparing your property for letting

The better the condition of your property, the more its rental value will be and the easier to let. First impressions count so here are our tips for preparing your property for letting:

• Ensure the exterior of the property is well maintained and the garden tidy.
• Internally, the property should be regularly decorated to give it a fresh, clean feel. Use neutral colours, such as white or off-white.
• Use good quality carpets, again with neutral colours such as beige. Wooden flooring is also popular, but can add to noise levels.
• Ensure all windows have good quality curtains or blinds

Well-equipped properties are always going to have the strongest appeal. Having all the mod cons in the kitchen and bathroom is especially important. Tenants usually expect the following appliances to come with a let:

• Essentials – washing machine, large fridge-freezer, cooker, oven, kitchen storage and work spaces, tiled bathroom with shower, good wardrobe space, carpets/quality flooring, central heating, good lighting throughout, and plenty of hot water.
• Desirables – dishwasher, microwave, a power-shower and bath.

Before you accept viewings, do ensure all your fixtures and fittings are in good working order. Also ensure that any instruction booklets to operate appliances are available to tenants.

You then need to decide whether you supply the property as furnished or unfurnished. There is little difference in rental income between the two.

If you opt for offering a furnished let, the furniture should be in good state. It would usually include things like a sofa, bed(s), wardrobes, cupboards, a table and chairs, so people can immediately move in. You can also provide electrical items such as a television, vacuum cleaner, iron, lamps and kitchen equipment.

 

4. Using an estate agent

Many landlords choose to manage their property directly and also to find their own tenants. However, this can be very time-consuming, and the formalities can be complex and bewildering, especially when you are dealing with a new tenant.

Using an estate agent, either to find you a tenant or manage your property, means bringing on board a wealth of experience and contacts. However, you need to ensure their service promise will deliver and at a price you are willing to pay.

Ask how long it normally takes them to let properties – the last thing a landlord wants is for their property to be left vacant, losing valuable rental income. Also ask them to provide in writing details about their commission fees and charges.

Property Trend’s lettings specialist invests considerable time with its landlord clients. First of all, we need to establish what they want to achieve in the near and long-term with their property. We are pro-active in offering insights about the marketplace, the rental value of similar lets nearby and the capital growth potential.

We operate transparently, going through in detail how we will market your property to prospective tenants, the process we use to vet new tenants, likely timescales from marketing to moving them in, and all charges associated with this work.

Your Property Trend lettings specialist will be your point person, speaking with you regularly so you are informed of all developments. You can also ask them any questions about the lettings process and all related formalities.

 

5. Finding tenants

Getting your property let can require considerable effort. After making it fit for letting, you need to take pictures and get it marketed in places where prospective tenants look. These include online property portals, and other local places that take property ads.

Estate agents will have many more marketing platforms at their disposal, as well as a list of current customers all looking for homes in your area. So asking an agent to introduce you to new tenants will certainly save you time and possibly money, as your property will usually be let far quicker.

Agents arrange and oversee viewings by prospective tenants, undertake the necessary formalities to vet new tenants, agree a move-in date, and get them moved in.

 

6. Tenant formalities

Once you have found a new tenant, you can take a holding deposit to confirm their commitment to renting the property. It is also advisable for landlords to vet their prospective tenant.

Property Trend uses an independent licensed credit reference agency for the process. They will conduct employment and credit checks, obtain bank references, and previous landlord or character references. These details are forwarded to our landlord clients so they can determine whether they wish to accept the tenant.

Other formalities include drawing up the tenancy agreement that is signed by both parties. A landlord will need to hand over copies of the relevant health and safety documents at this stage, while taking from the tenant the full deposit and first month’s rent.

Again, our lettings specialist can oversee all these formalities, which continue right the way through to the new tenant moving in. We take care of all the small details, ensuring the interests of both landlord and tenant are fully covered at this introductory phase.

 

7. Inventory

Landlords should get an inventory of their property before any new tenancy starts. The tenant needs to check the inventory and sign it before they receive the keys and move in. That way, both parties have an accurate record of the items in the property.

At Property Trend, we use a professional inventory agent who examines and records the condition of a property before and at the end of a tenancy.

Tenants are not charged for ordinary wear and tear, but where the property is damaged in some way, such as by making holes in walls, or damaging furniture or other features of the property, it is reasonable for landlords to charge their tenants for the cost of repairing or replacing these.

 

8. Compliance

There are numerous pieces of legislation landlords must adhere to when letting property. Chief among these are health and safety regulations, which are strictly enforced by local authorities. These include gas and electrical safety regulations.

The Gas Safety (Installation and Use) Regulations
These regulations came into force in 1994, requiring the landlord to make sure all gas-powered appliances and pipe work are maintained in a safe condition. This covers any mains, propane or Calor Gas that is used for heating, lighting, or cooking.

In order to prevent risk or injury to any person, every 12 months the landlord must get every gas appliance checked by a qualified gas engineer (should be CORGI registered). Landlords are legally required to keep a record of these inspections and enable tenants to inspect the results and receive a copy of the safety certificate when they sign the tenancy agreement.

We advise landlords to carry out a Gas Safety inspection before a new tenant moves in.

The Electrical (Safety) Regulations and Plugs & Sockets (Safety) Regulations
Also coming into force in 1994, these regulations govern electrical items a landlord supplies. This includes electric heaters, televisions, vacuum cleaners, microwaves and other kitchen equipment, which must all be tested and certified as safe to use.

It is a criminal offence for landlords to supply unsafe electrical equipment and they could be fined up to £5,000 for doing so. Tenants can also sue for damages if they are injured by using property the landlord has supplied.

Electrical items and sockets should be safety-tested by a qualified electrician before a new tenant moves in, with copies of the relevant certificates provided to the tenant.

Fire Safety
Getting a fire risk assessment for your property is highly advisable and for landlords renting flats, bedsits and hostels, obtaining a Fire Safety Order is a statutory requirement. We can recommend a competent person to carry out this inspection. At the same time, they can also do smoke and carbon monoxide tests, and make recommendations on additional precautions a landlord should take to adhere to fire safety legislation.

Energy Performance Certificates (EPCs)
EPCs must be issued at the start of every new tenancy. This provides information about energy usage for the property and typical energy costs. The EPC will rate the property from A (most efficient) to G (least efficient), and provide recommendations on how to improve energy efficiency and save money. The certificates are valid for ten years.

House in Multiple Occupation (HMO)
Additional rules apply for landlords who let their property room-by-room. A property is considered to be an HMO when it is occupied by three or more people forming more than one household, who share the same basic amenities in the house, but pay their rent separately. HMOs need to be licensed and the criteria can vary from one local authority to the next.

 

9. Property maintenance

Landlords need to be responsive to their tenants; after all, in London they pay a large sum of money to live in a safe and comfortable home. Repairs need to be conducted swiftly, alongside other regular maintenance of the property.

Property Trend can remove the stress of property management. Not only do we monitor changes to legislation governing rented accommodation, but our extensive network also includes qualified tradesmen to help maintain your property to the required standards. Their services are competitively priced and they can undertake urgent repairs at very short notice, ensuring issues do not turn into a crisis.

 

10. Tax and insurance

Insurance
Landlords must take out adequate cover for both the property and its contents. The insurance policy must reflect that the property is being let by a non-resident landlord. Landlords should carefully read the insurer’s conditions and ensure they fully comply with the terms of the policy.

Tax Collection
There are special rules governing tax from non-resident landlords. The 1995 Finance Act does not alter the tax liability, but the way it is collected. Landlords can apply to HMRC for self-assessment on the tax from the rental income.

If granted, the agent will be able to release the gross rent. If the request for self-assessment is not granted, the agent will have to pay HMRC on a quarterly basis the income tax percentage due from the rental income. This calculation will not include mortgage interest, depreciation or other tax-deductible items. Where there has been an overpayment of tax, it will need to be reclaimed by the landlord at the end of each tax year.