Category Landlords

Demand for rooms has rocketed in recent months, coinciding with a huge shortage in the number of rooms available in the UK. Unsurprisingly this has resulted in many tenants struggling to find places to rent. In fact, a recent SpareRoom survey of over 6,000 renters found that 96% of Brits are struggling to find accommodation at the moment*. Interestingly, we saw the opposite happen last summer, with landlords desperate to fill empty rooms but tenants reluctant, or simply unable, to move.

The increase in demand has been driven by people coming into the market, rather than moving within it. According to the same poll of over 6,000 renters, many are moving back out of parents’ or friends’ houses, flatsharing after renting on their own or owning a property, and overseas students (and students in general) are starting to return to cities. This results in a lot of people looking for rooms without vacating their current property, putting pressure on the market.

SpareRoom’s research reveals exactly where these people are moving from:

–           Another Flatshare – 29% 

–           Parent’s home – 25%

–           Outside UK – 14%

–           A friend’s house/flat – 10%

–           My own rented properly (not shared with anyone else) – 6%

–           Partner’s house/flat – 5%

–           Student accommodation – 4%

–           A property I own – 1%

–           Other – 6%

Flatshare site SpareRoom surveyed over 400 landlords to find out what has caused this drop in supply**. 

59% of landlords said they have fewer rooms to fill than this time last year, and almost half (43%) of those with fewer rooms said they’d filled all their rooms and they were now tenanted. But this isn’t the only reason why landlords have less availability currently: 

• 14% aren’t expanding their portfolio due to high house prices
• 10% aren’t expanding due to uncertainty in the market
• 9% have sold one or more of their properties
• 8% can’t develop properties due to a lack of tradespeople or materials
• 6% are planning on selling up and leaving the market

We asked landlords with fewer rooms which issues were currently affecting them the most – surprisingly the pandemic wasn’t a leading factor. Please see the results below: 

• Increased legislation – 26%
• Fewer tax breaks for Buy to Let – 22%
• The threat of further legislation – 22%
• Covid affecting their lettings business – 11%
• Shortage of tradespeople – 10%
• Shortage of building materials – 5%

Matt Hutchinson, SpareRoom director comments: 

“There’s no doubt Covid hit the rental market hard. Last year it was landlords struggling to fill rooms – this year it’s tenants struggling to find them. But the pandemic isn’t what’s keeping landlords awake at night – it’s government policy.

Recent legislation and tax reform made it clear that the government wants to steer the private rented sector away from an over-reliance on smaller investors. More legislation seems inevitable. Although the Tenant Reform Bill has been put on ice until 2022, many landlords are concerned about what it will bring. What tenants want most is stricter regulations for dealing with rogue landlords, so it’s highly likely the sector will see further change in the coming months and years. Hopefully whatever the government chooses to do will target the real problem landlords and get them out of the market, making it a better place for landlords and tenants alike.”

Technology is becoming more important for renters wanting to rent at the top end of the market. The attraction is understandable: there is technology for almost everything in the house, including integrated music systems, multi-room temperature management, and the capacity to remotely lock doors, all of which can be controlled from a tablet or phone.

These more complicated systems are often already installed in rental houses.

The following are the benefits and drawbacks of renting out a property with a complicated technological system or moving there as a renter.

PROS

CONVENIENCE

These smart home technology solutions, when utilised appropriately, can make life much simpler for both tenants and landlords. The ability to operate anything remotely, from the heating to the curtains, allows you to keep an eye on the property while you’re away and remain in charge when you return from the comfort of your own bed or sofa.

SECURITY

There are now devices that can mimic your daily activities while you’re gone, making your house seem inhabited.

FUNCTIONALITY

The usefulness and usability of these technologies are undeniably appealing.

MARKET ATTRACTION

In a market of more sophisticated tenants, a well-equipped home with smart home technology will stand out and frequently let ahead of a less technologically adept competition.

CONS

UPDATING

Instruction manuals are readily misplaced, and whoever is in charge of a property is also in charge of keeping this smart home technology up to date. Manuals can be difficult to replace as technology advances.

DIFFICULTIES IN OPERATING

Tools are only as good as their operators – too complicated smart home technology systems might be more of a problem than a solution if tenants are unable to use them. Having a three-hour training session for the tenants just so they know how to use their new home will be really unpopular and prove to be rather difficult.

MAINTENANCE

These systems often need upgrading, and upkeep can be pricey for landlords.

Technology is a wonderful tool that, when utilised wisely, can significantly improve one’s quality of life. Clearly, there is plenty to consider, but technology can only be as helpful as the tenants and landlords make it.

Landlords may be excused for being perplexed by the rules and legalities on access. The legislation makes them accountable for safety and maintenance and threatens them with severe fines if they do not comply. However, if they enter the property without authorisation, they can be sued for trespass and violating the tenant’s right to ‘quiet enjoyment.’ What does this mean?

Tenants’ Rights

Tenants have a right to ‘quiet enjoyment’ of the property under common law. This is an implicit provision, or covenant, that has been stated or inferred in English property conveyances and leases for centuries. This clause requires the landlord to allow the tenant to dwell in the property without excessive interference, that is, “without interruption of possession”.

‘Quiet enjoyment’ is a phrase that is often misused. In Jenkins v Jackson, a case from 1888, the court declared that the phrase ‘quiet’ in the covenant “does not imply undisturbed by noise.” When a tenant is in possession peacefully, it has nothing to do with loudness… ‘Peacefully and quietly’ means without interference.

In a nutshell, it means that the renter must be allowed to live in (or ‘enjoy’ in the old-fashioned sense of the term) the property without interference from the landlord or anybody acting on his behalf. This safeguards the renters’ interests.

Landlords’ Rights

Tenants, however, must allow landlords access. Both the Housing Act of 1988 and the Landlord and Tenant Act of 1985 require that every rental agreement include a condition or covenant stating that the tenant must provide reasonable access to the property for repairs to be carried out.

Landlords will, of course, want access to the property in order to do these repairs. In addition to access for repairs, the landlord has the right to inspect the property’s condition. The landlord or someone acting as the landlord’s agent may enter the property at any “reasonable time of day” but only after providing the tenant with at least 24 hours’ written notice.

Landlords should not claim any special privileges regarding how often and when a property may be accessed. Access to a leased property is difficult; for a renter, it is their private home, yet for a landlord, it is a precious asset that must be carefully managed. To make this work, some kind of agreement with the tenant is required. As a result, it’s not uncommon to hear of landlords being accused of trespassing on a leased property by disgruntled tenants.

Getting The Proper Balance

In general, there are two categories of tenants; those who give easy access to the property and appreciate having a proactive landlord who maintains the property and others who do not. The other categories stipulate that they must be present for any maintenance or inspection visits. As a landlord, you must assess the sort of renters you have and how to deal with them, as there is no perfect solution. Essentially, you must have a positive working relationship with your tenants.

Balancing tenants’ rights and landlords’ legal duties might be challenging, but it should be doable if addressed with mutual respect and practicality.

As a landlord, there are certain responsibilities that will come under your remit – you can’t simply rent out your property and wait for the money to come in. Although tenants will certainly have their own set of responsibilities, one of the benefits of renting (for the tenant) is that the landlord will deal with repairs and maintenance. 

In fact, if you’re budgeting in advance and you want to ensure you’re always going to be able to cover any repairs that need to be made to keep your property at its best and to keep your tenants happy, you’ll need to put aside around 10 percent of your rental income. You might not need to use it, but it’s far better to have it and not need it than need it and not have it. That’s all part of being a landlord. Read on to find out a little more about the kinds of maintenance and repairs that you may come across and have to deal with; the more you know, the more prepared you can be. 

Unexpected Repairs 

We’ve talked about landlords having to be prepared, putting away 10 percent of their rental income, responding quickly to requests from the tenant, but sometimes the unexpected happens, and although you might not have been waiting for these specific repairs to be needed, you’ll still have to deal with them. Some of the most common unexpected repairs will include kitchen appliances, heating and hot water, electrics, and plumbing. Essentially, anything that can happen without warning in your own home could happen without warning in your tenant’s home – be ready to spend out to get these issues fixed as soon as possible. 

Turn Costs 

Turn costs are something that you can absolutely prepare for in advance, and the longer you are a landlord, the more efficient – and cost-saving – you can be. Of course, these costs, the costs that you should expect to pay when a tenant moves out so that a new tenant can move in, will depend on how well the property was treated, but overall it’s wise to budget for new carpets (especially if the tenant was living there for over three years), changing the locks, and generally tidying the property up with a lick of paint. 

Damages 

The idea of a landlord having to pay for damages can be a controversial one. When a tenant leaves a property, some level of general wear and tear is allowed; after all, it’s hard to live anywhere and not make some mark on it in some way. Damages are anything that goes over and above this ‘fair wear and tear’ and could include holes left in walls, damages caused by pets, broken appliances, and so on. Although these damages are what a tenant’s deposit is for, and often the costs can be taken out of this deposit, sometimes there isn’t enough cash available, and sometimes it can be hard to get a decision from the authorities. In the meantime, you the landlord will have to pay out if you want the repairs to take place. 

General Maintenance For Building Code 

All properties have to be maintained up to a minimum building code that ensures they are safe places to live. Since a landlord has a duty of care towards their tenants, any maintenance issues that need to be carried out to ensure that this building code is adhered to must be dealt with quickly. This might include updating the electrics and making sure the heating and hot water are adequate. 

If you like the idea of being a landlord and renting out your property, you’re not alone; it’s a dream that many people have, and since it’s a very easy sector to get into – as long as you have the money and are prepared to put in the hard work – it’s something that many people have chosen to do (especially as the UK rental sector is said to be growing and by 2030 two thirds of people will be living in rented accommodation).

However, just because you can do it does not mean you should; there are many factors to consider first. Here’s a guide to help you determine whether renting out your property is the right thing for you, as well as things to think about after you start.

Are You Prepared For This Level of Responsibility?

There are many advantages to renting out your property and being a landlord, and the money you can earn – particularly if you have multiple properties – is definitely appealing. However, there will be work to be done, and it is a responsible task that you must be prepared to take on if you want to be a good landlord.

You will be responsible for maintaining your property, ensuring that any repairs are completed quickly, collecting your rent, and dealing with all of the laws and paperwork that come with renting a home. If you don’t do this properly, you might not only lose money, but you could also acquire a reputation as a poor landlord, making it difficult to attract excellent renters in the future.

Is The Property Ready To Be Sold?

Maybe you inherited a property. Perhaps you’ve moved in with someone else and now have a “spare” flat or house. Maybe you got a fantastic bargain on a home and paid much less than the market value since it requires a lot of repair and modernisation. This is just the start of your landlord adventure, not the finish. It isn’t even in the middle!

Before anybody can move into the property, before you can think about renting out your property, you must verify that it’s fit for human occupancy. This may be a little or large task, but renting it out too soon would only mean that your tenants are unhappy, and possibly unsafe. Making the home ready for renters will cost you money, whether it’s a full renovation or a fresh coat of paint and a garden clean-up. Make sure you have the money, time, and energy to do this.

Should You Hire A Property Management Company?

If you enjoy the concept of becoming a landlord but are concerned about the obligations and effort required to prepare the property as well as maintain it in the future, you might believe that you will be unable to fulfil your goal of being a landlord and renting out your property, and will need to try something else.

There is, however, a remedy. When you see how a property management firm can solve your lettings problem, you’ll realise that you can be a landlord while letting someone else handle the more difficult aspects of the job. A competent property manager will handle all aspects of renting out the home, from screening tenants to collecting rent to organising an inventory to managing maintenance. Then you can sit back and enjoy the benefits.

The lease agreement will typically outline the steps that landlords – or letting agencies working on their behalf – must take in order to make a rent increase. However, there are likely to be constraints, and it’s important to know what you can and can’t do.

What Type Of Lease?

You will generally only be permitted implement a rent increase once a year if your renters are on a periodic lease, which rolls from week to week or month to month. You may agree on a new rent with your renters and have all parties sign an agreement to that effect, or you can utilise the government’s ‘landlord’s notice proposing a new rent’ form if there is no procedure for doing so under the lease agreement they signed. If the property has renters, you must give them notice if you plan to visit it, whether to examine the premises or perform repairs, unless there is an emergency.

If your tenants have a fixed-term lease (one that lasts a defined length of time, such as six months or a year), you cannot raise the rent during this time unless your tenants agree. However, after the set period expires, you will be able to make a rent increase. This just entails having your tenants renew their lease agreement with the rent changed.

If your renters pay their rent on a weekly or monthly basis, you must provide them one month’s notice of any rate increases. If their lease is for a year, you must provide six months’ notice.

Don’t Forget…

It is essential to remember that you are only allowed to raise the rent by a fair and reasonable amount, and if your tenants believe that a rent increase is excessive, they may appeal to a rent assessment committee. Alternatively, they might simply decide to look for accommodation elsewhere, at a fairer rate, and you might be left with an empty property.

Landlords are never going to enter into lease agreements expecting to face difficulties, and they definitely don’t believe that property damage is an unavoidable part of doing business in the private rental market, yet it does occur. Rather than hoping and crossing their fingers, what can landlords do to minimise any possible income loss and rental property damage?

Tenants

The overwhelming majority of renters are trustworthy, responsible, and polite, but there are outliers. Problems, difficulties, and damage arise in every company, whether they are material or reputational, and the private leased sector is no exception. Landlords face an inherent danger when they accept renters who are negligent, reckless, or even malevolent in their handling of the property and its belongings.

Landlords are particularly vulnerable to harm due to the nature of the property sector, since they must depend largely on confidence and surrender a fair degree of supervision and control when giving over the keys to the property. When that trust is lost, there are practical and legal consequences, but it is always preferable to minimise any risk from the beginning of the tenancy.

Landlords can take a variety of efficient measures to reduce the possibility of loss or damage, which include components such as interim property inspections, insurance, references, and contractual requirements. Let’s take a quick look at how you may prepare for the worse while hoping for the best.

Tenancy With Assured Shorthold (AST)

Before entering into a contract with a prospective tenant, it is both recommended and highly advisable to commission and follow up on any landlords’ references provided. However, keep in mind that these references are from the landlords that the tenant knows will offer the best review. Checks of their rental history will be much more informative.

Speaking with past landlords can allow you to detect any patterns of behaviour, problems with rent payment, general maintenance, or property damage. Questions such as: how was (any) harm caused? Did the renter notify the landlord as soon as possible? Did they accept none, part, or all of the blame? How peacefully was the situation resolved? This may be the first stage when red flags are raised.

Renter reference checks are a fast, inexpensive, and easy method for landlords to assess if a tenant is likely to be dependable and, more crucially, to pay their rent on time.

Checks should contain the following items:

• Negative credit
• Landlord citation
• Employer testimonials
• Calculations of affordability
• Checking the right to rent
• Documents – bank statements / identity proof

When you’re certain about your tenant selection, consider including specific terms in your AST. Many landlords use standard form agreements, however there may be unique factors that relate to your property, such as structural, geographical, or style, quality, and arrangement of interior fixtures and fittings.

Similarly, you may want to make certain that explicitly prohibited behaviours, such as smoking, keeping pets, or excessive use of open fires, are clearly emphasised so that your intentions are not misunderstood. Consider the problems that make your property especially vulnerable to harm and plan for them. The renter is also responsible for informing you of any harm that has happened or, more crucially, circumstances that may soon lead to damage, in order to reinforce any known duty in specific terms.

Landlords must also ensure that the property is well-maintained and that safety is prioritised, with necessary gas and electrical certifications, smoke alarm inspections, and compliance with current laws, such as the Homes Act – suitability for human habitation.

Property Reports

It is critical to follow best practises in inventory property management before your tenants come in. A comprehensive examination of the premises, down to the smallest detail of the décor, equipment, and furnishings, as the information will clearly indicate the condition and provides both parties confidence and establishes an equal footing. The inventory report process may be time-consuming and complicated, but there are methods to make it easier. Using a managing agency is one apparent option, but if you are a self-managing landlord and are not interested in the cost or delegation required, another feasible option is to hire an inventory business or expert to produce the report.

A knowledgeable clerk will know what should and will not be included in the report, will ensure that any prospective points of contention are addressed from the beginning, and will set the standard for all future reports such as interim inspections and, of course, the check out at the end of the tenancy.

Property Inspections

Once the lease begins, your property is at its most vulnerable since, although you have some rights of access, they are balanced in law against the tenants’ rights of privacy, thus your best defence throughout the tenancy is frequent property inspections.

Ideally, you should visit the property on a frequent basis to verify that there are no maintenance problems, that the tenant is following the conditions of the AST, and that the smoke and carbon monoxide detectors are functioning and the renter is safe. The utilisation of a property professional or inspection app may minimise the time and effort required to conduct frequent inspections while maintaining the detail and completeness of the interim examination.

What should landlords do when a tenant moves out? The very nature of the rental market means that no matter how good a tenant might be, eventually, they will want to move on. They might have saved up enough of a deposit to buy their own property, they might need a larger home, or even a smaller one. They might just want a change. 

When this time comes, it is vital to get the property ready for the next tenants as soon as possible so that you are not losing out on the rental income for too long. If you’re wondering what should landlords do when a tenant moves out, here are some tips. 

Inspect The Property 

This is a job that is best done before the current tenant leaves so that if anything needs to be put right, you can discuss it with them. However, if you are unable to do that, you will need to get there and check everything over as soon as you can after they move out. Alternatively, you can hire an inventory company to do the job for you – this can be extremely useful if you live a long way from the property. 

If there are any problems, you will need to discuss these with the tenant. If they cannot put the problems right, their deposit will be required to cover the cost of repairs. Otherwise, the deposit needs to be released back to the tenant within ten days of their leaving date. 

Tidy Up

Depending on how long the tenants lived in the property, another answer to the question of what should landlords do when a tenant moves out is that you may need to repaint the walls, put up new wallpaper, or even replace the carpets. This will often be down to general wear and tear and isn’t the responsibility of your ex-tenants. Ideally, they will have cleaned everything before they went. Still, you may need to look at the end-of-tenancy cleaning prices and hire professionals to make everything look absolutely perfect for prospective tenants. 

You can also dress the property by installing your own furniture. This can help a property rent more quickly as prospective tenants will be able to see how they can make it a home. An empty property can be difficult to rent out. 

Reduce The Council Tax 

Once the tenants move out, they will no longer be paying the council tax on the property, and it will fall to you as the landlord to pay it. You must contact the council involved and apply for a reduced rate if the property is empty. If you don’t, you could be paying hundreds of pounds over and above what you should be. 

Change The Locks 

When it comes to wondering what should landlords do after a tenant moves out, changing the locks is often forgotten. Even if you had the most trustworthy, reliable tenant you could have hoped for, it is still wise to change the locks once they move out. You never know if there is a spare key still around, or if they made copies. Of course, generally, a tenancy agreement will require any copies to be handed in as well, but if they can’t be found, or they have been forgotten, you may simply never know about them. Changing the locks means you can ensure the property is kept safe and that the next tenants are the only ones who have keys. 

Becoming a landlord is something that some people accidentally fall into, but it’s also something that can be a well-thought out, permanent career move for others. If you’re thinking of reasons to be a landlord, you might be wondering what you can get out of it. We’ve put together some great reasons for you to become a landlord; here are some of the best ideas.

Long-Term Investment

There are many reasons to be a landlord, and one more is that investing in buy to let properties is a great long-term investment. Providing you can get a mortgage, you don’t need that much start-up capital (although there are still some costs involved; you’ll need to thoroughly research these first. It might be a good idea to make yourself a pros and cons list so you know you can afford it) and you can be making money within weeks if you pick the right property to invest in. Over time you can build your portfolio which means that, when you’re ready to sell those properties on, you can realise a great return.

You’ll Have A Retirement Income

As mentioned above, if you have a number of properties (or even just one will do if it’s the right one) and you decide to sell them and not buy anymore, you’ll have made yourself a nice chunk of money that is ideal for using to fund your retirement. Gone are the days when people were able to retire properly at 60 or 65 and just enjoy their lives; many people will need to keep working for years after they had hoped to retire. If you invest early enough in property, this won’t be an issue for you.

More Time With Your Family

A landlord who relies solely on the income from their rental properties won’t need another job, and therefore won’t be heading out of the door at the same time each day and commuting to an office, heading back later and finding that the kids are already in bed. You’ll gain a lot more time if you are a landlord because you will simply need to look after your tenants and properties. If you engage a management company, you won’t even have to do that. That means more time to play with your kids, more time with your spouse, you’ll even have more time to go on holiday. Life becomes a lot less stressful (although that doesn’t mean being a landlord isn’t hard work; it just means you’ll be working differently).

You’ll Learn A Lot

Even if you didn’t intend to be, if you’re a landlord you are also a business owner. That means you need to learn a lot about how to run that business, including all the tax implications, as quickly as you can. It’s always good to learn new things, and running a business as a landlord means that you’ll never stop learning; there is always something else that you need to know about, whether it’s new regulations or how to decorate a home to keep your tenant happy, there is certainly never a dull moment.

If you have bought an investment property, then you will want it to be rented out as soon as it is ready, otherwise you will be losing money. Here are some of the best ways to ensure that you can rent out your investment property quickly and that you find the right tenant at the same time. 

Research The Market 

Something that will put prospective tenants off choosing your property to live in, or even view, is the price. You may have a rent in mind that you want to achieve, but that doesn’t mean that price will be possible. You need to check to see what else is available in your area and compare those properties to your own. Find as many similar houses or flats as you can and note the rents they are asking for. This way, you can get a good idea of what you might be able to achieve. Be prepared to be flexible though when you want to rent out your investment property, as you may need to reduce your price over time or take an offer if you think it can work for you. 

Work Out The Costs 

Once you know how much rent you are likely to achieve, you should work out all the costs. For example, depending on your situation, you may be taxed on your rental income, which would be at 20 percent (or 40 percent for higher earners). This can make a big difference to your profit. There will be other costs associated with the property as well, such as the mortgage (if you have one), landlord’s insurance, and the cost of maintenance. If the rent you could get won’t cover these costs, you may need to look at alternatives such as selling the property or converting it into a multiple occupancy property that you can charge for by the room rather than as a whole. 

Advertise 

Unless people know that your property is up for rent, they won’t ask to see it. Therefore, you need to do as much as possible to advertise it if you want to rent out your investment property. If you choose to go with a lettings agent, they will do this for you, but of course they will also charge. If you prefer to do everything yourself, you can use social media to your advantage to begin with. You can share the details of your property and ensure that as many people see it as possible by boosting the posts to your chosen audience. You can use presentation software to put together all the benefits of renting your particular property so that prospective tenants can see everything they need to before contacting you. This saves you (and them) time because only those who are really interested in the property will need to see it. 

Local press can also be a helpful way to advertise your property, as can word of mouth. Really, the more ways you can promote it, the better, as the right tenant will spot it quickly, and you will be able to move them in sooner. 

Get Insurance 

Although the tenant will deal with the contents insurance, since you are the property owner, you will need to organise buildings insurance. You will also need landlord’s insurance. Landlord’s insurance is in place to protect you from non-paying tenants, for example, and will ensure that you don’t lose money in the long term.