If you’ve somehow found yourself reading this article, then the chances are that you are interested in becoming a residential landlord in the UK. So, here are some of the things to consider when becoming a landlord.
Mortgage
Before you can let out a mortgaged property, you must seek the lender’s permission. And even if you’re letting out a room in your own home, you should inform your lender too. You stand the risk of repossession if you fail to take these precautions.
If you know you the purpose for purchasing a property is to let it, you may be able to get a buy-to-let mortgage from the outset. This means that the lender is aware and consents to your use of the property as a rental.
Insurance
It is important to have adequate homeowner insurance. Your normal insurance cover will not likely be valid if you have tenants in the property without your insurer’s consent.
This might apply, even if the ‘tenant’ is a lodger. Please check with your insurance company if you have any concerns. Many insurance providers have policies that are specifically tailored to suit landlords.
Fitness for human habitation
All properties that are being rented in the UK must be fit for human habitation. Not only is it your responsibility as a landlord to ensure your property is fit for tenants, but this is also a legal requirement that can land you in hot water if you are found to be in violation.
Put simply, if any of the following applies to your property, then it is not fit for human habitation and must be rectified before you take on any new tenants:
- Unstable building
- Serious dampness
- Dangerous layout
- Insufficient natural light
- Poor ventilation
- No hot or cold running water
- Issues with the drainage or toilets
- Bad/Insufficient cooking or washing up facilities
Tax
You need to declare all earnings from your rent. Income tax and rental income can be tricky for a first-time landlord. However, HMRC can provide details on income tax when you let property for a landlord who is struggling to work out what they must declare an what they owe.
Property Management
Running rental assets can be extremely time-consuming. As a landlord, you are actually running a business and need to maintain clear records and have good customer service in the same way as any other private organisation.
You must also consider how you are going to manage the property. Are you going to manage the property yourself, or are you going to let through a letting agent? All of this will need to be taken into consideration so that your tenants know who to contact if they need any assistance when living in the property.
Registration Fees
All private tenants must sign their details with the UK Landlord Registration Scheme. If more than one person is named owner of the property, each party will need to register, but only one person will have to pay the associated fee.
In fact, you will need to apply for a license and pay the applicable fees if your property is listed as a Multiple Occupation House (HMO). However, you will not have to pay the Landlord Registration fee if you have already paid an HMO license.
Ensure that you are taking all of these things into consideration when you are thinking about becoming a landlord, and you shouldn’t see any issues going forward.
