Check out our landlord's quick guide below of things you'll need to consider before renting out your property:
Getting the property ready for rental
Now that you have decided to rent out your property you'll want to maximise the letting potential by making sure you address the condition, the quality of the presentation and attention to detail. The most important thing to remember is that you are not going to be the one living in the property, so your personal taste should take second place to what the market demands. Better properties attract higher rental yields and tenants tend to stay for longer. We will advise you accordingly when we first visit your property if any improvements are required.
The first thing that a potential tenant sees is the front of the property, so the exterior should be in good, fresh decorative order. Any pathways and driveways should be cleared of weeds and should be tidy, presentable and rubbish free.
Trim hedges, mow the lawn, repair any cracks, holes or blemishes or walls, give the windows a lick of paint and make sure the house number is clearly visible.
If you are letting a garage with the property, this should also be cleared and made ready for use. The garden should also be tidy and presented in an attractive manner, dig up any dead or unsightly plants and if possible add some new ones.
Ensure that all available utilities are connected to the property including, telephone line, gas, water and electricity. Where provided, check any LPG/OIL tanks are in working condition and any septic tanks attached to the property are emptied.
Furnishings, Carpets, Curtains & General Interior
Your property can be let fully furnished, part furnished or non-furnished, this will be entirely up to you. We can advise you at the time on whether to furnish or not, and to what level.
You'll find that most tenants prefer plain, neutral colours for decoration and you will also need to take in to consideration wear and tear, especially on carpets.
Carpets should be good quality, practical and hard wearing and not too light in colour, it may also be appropriate to fit wooden floors in some of the rooms. Whatever you decide, it should be good enough to last.
Bathrooms should have a good quality shower, and Kitchens, ideally, will be well equipped and functional. Again, good quality is important in these areas.
Window areas should have curtain rails or blinds installed, curtains do not need to be provided but it does assist in the letting of the property.
ALL electrical, plumbing, waste, central heating and hot water systems MUST be safe, sound and in good working order.
Any instruction/operating manuals for any appliances and electrical equipment should be left in the property. Details of any maintenance contracts should also be supplied.If you are letting your property for the first time a plastic folder with all such documentation in is a good idea to leave in the property for the tenants use.
Before the commencement of a tenancy the whole property should be made clean throughout. This is of the upmost importance especially when being let out for the first time as an inventory is taken of the condition of the property which is used as evidence if any discrepancies or cleaning issues arise when a tenant vacates.
Other Important Considerations
Do you have a mortgage on the property? - If you have a mortgage on the property that you intend to let then you will need written permission from your mortgage lender if not already a buy to let mortgage. Depending on who your lender is will determine whether they want to include extra clauses within the tenancy agreement.
Is your property held on a Lease? - If you are the leaseholder of the property then you will need to check the terms of the lease and prior to letting obtain any necessary permissions.
Council Tax & Utility Services - Arranging for transfer of the council tax and utility services in to the correct tenant name is part of our services. We assist in taking meter readings for each of the services connected to the property along with the council tax and transferring them in to the tenants name. Once a tenancy begins it is the tenants responsibility to pay all utilities along with the council tax unless certain elements are stated to be included in the rent.
Insurance - You should ensure that you have adequate insurance cover for buildings, contents and public liability in place. It is recommended that specific Landlords Insurance cover is used. Failure to notify your current insurer that the property is to be used for rental purposes may invalidate your policies.
The Cost of Letting Your Property
While your thoughts maybe leaning towards how much you can get by letting your property, you must consider and budget for any costs that could arise, for example:
- Monthly mortgage payments due on the property
- Expenses for bringing the property up to the required standards in terms of safety and regulation
- Annual regulatory requirements (example: annual gas safety certificate)
- Letting agent and management fees
- Insurance fees
- Contingency budget for ad hoc maintenance and repairs
Post - If you are renting out a property where you no longer live (e.g.: you are moving and want to let the property) then you will need to arrange to have your mail re-directed to your new address.
Income Tax - It you are currently residing in the UK, it is your responsibility to inform Revenue and Customs of any rental that you receive and to pay any taxes due.
Non UK Residents - If you are living outside the UK then there will be certain additional information to complete for Revenue & Customs so that the full rental payment can be made direct to you. We can assist with this.
LEGAL REQUIREMENTS & HEALTH AND SAFETY REGULATIONS
As a Landlord you have a duty of care to anyone renting your property and must ensure the following checks and certificates are in place prior to a tenant moving in. Also there are certain legal regulations that must be met in order to be able to let your property.
LANCASHIRE LETTINGS WILL ADVISE THE LANDLORD ACCORDINGLY AND CAN ARRANGE FOR ANY CERTIFICATES OR WORKS REQUIRED TO ENSURE THE LANDLORD COMPLIES WITH ALL OF THE REGULATORY REQUIREMENTS AT THE TIME OF THE LETTING OF THE PROPERTY.
As a landlord of a property equipped with gas appliances you need to understand and comply with the law relating to gas safety.
- Under the Gas Safety (Installation and Use) Regulations 1998 all gas appliances and flues in rented accommodation must be checked for safety within 12 months of being installed, and thereafter at least every 12 months by a competent engineer e.g. a GAS SAFE registered gas installer (Council for Registered Gas Installers).
- All gas appliances and associated pipe work and flues should be maintained to ensure they are safe to use and prevent risk of injury to any person.
- Provide the tenant with a copy of the safety certificate before their tenancy commences or within 28 days of the checks being done and retain copies of the certificate for 2 years.
The Electrical Equipment (Safety) Regulations 1994
The electrical supply and appliances within a property must be safe at all times. Appliances must be checked for defects (e.g. badly fitted plugs or frayed wires etc.). If an item is found to be unsafe then this should be removed from the property prior to offering it for rent. There is no statutory checking procedure at present but we strongly recommend that all landlords' have a 5 Year inspection of electrical appliances including an electrical supply safety check, by a qualified electrician. Records of any checks should be retained and provided for inspection if required.
The Plugs & Sockets (Safety) Regulations 1994 (Consumer Protection Act 1987)
Any plug, socket or adapter supplied which is intended for domestic use, must comply with the appropriate current regulations.
Building Regulations - Part "P"
The Landlord and Tenant Act 1985 puts the responsibility on the landlord to make sure that the electrical installation of their property is safe when a tenancy begins. From 1st January 2005, all domestic installation work must be carried out by a Government "Approved" Contractor. Electrical Contractors will also have to verify that the works complies with (BS7671). Failure to comply with these regulations is a criminal offence and could result in fines of up to £5,000 and/or imprisonment.
The Furniture & Furnishings (Fire) (Safety) (Amendment) Regulations 1993
It is now an offence to install any furniture in let properties that do not comply with these regulations.
The regulations apply to
- Seating Furniture
- Pillows and scatter cushions
- Stretch or loose furniture covers
- Children's furniture
- Garden furniture suitable for use in the dwelling
and any other item with similar type fillings of which must carry the appropriate labels of compliance.
Each item of furniture or furnishings will have a label attached to it stating compliance with the regulations. All new furniture must carry a display label at the point of sale. Furniture which has no permanent label or a permanent label which is not in one of these types should be assumed not to comply.
The regulations do not apply to
- Antique furniture made before 1st January 1950
- Bedclothes including duvets & pillowcases and loose covers for mattresses
- Sleeping bags
- Cushion covers
Due to changes to the Approved Code of Practice regarding Legionella Control, it is required that all rental properties must have a Legionella Risk Assessment carried out. The relevant legislation can be viewed at http://www.hse.gov.uk/legionnaires/
The 1991 Building Regulations require that all properties built since June 1992 must be fitted with mains operated interlinked smoke detectors/alarms on each floor. There are certain rulings with older properties that apply to having mains operated interlinked smoke detectors/alarms fitted and we can advise if these are required once we have assessed your property.
Smoke alarms need to be fitted on every storey of the property. The alarms must be in full working order at the beginning of each tenancy.
The Smoke and Carbon Monoxide Alarm (England) Regulations 2015
Private sector landlords are required from 1 October 2015 to have at least one smoke alarm installed on every storey of their properties and a carbon monoxide alarm in any room containing a solid fuel burning appliance (eg a coal fire, wood burning stove). After that, the landlord must make sure the alarms are in working order at the start of each new tenancy.
The Immigration Act 2014
Landlords from February 2017 now have to ensure that their tenant(s) have a legal right to rent in the UK and have to carry out specific checks to ensure all tenant(s) have a legal right to rent in the UK. Proof that these checks have been carried out must be retained and failure to carry out these checks could leave the landlord open to a fine of £3000 per tenant. Lancashire Lettings carry out these required checks with certain levels of service - Let Only - Fully Managed - Guaranteed Rent.
The Disability Discrimination Act 1995 (DDA)
In December 2006, amendments to the above act came in to effect giving a disabled person the right to ask a landlord for reasonable adjustments to a property to enable he / she to enjoy the property and its features as an able-bodied person could. Such modifications are temporary and at the end of the tenancy can be reinstated. Any alterations and changes to the property will be at cost to the landlord.
Housing Health & Safety Rating System (HHSRS)
The Housing Health and Safety Rating System (HHSRS) is a new risk assessment tool used to assess potential risks to the health and safety of occupants in residential properties in England and Wales. The new assessment method focuses on the hazards that are most likely to be present in housing. The HHSRS assesses 29 categories of housing hazards, each hazard has a weighting which will help determine whether the property is rated as having Category 1 (serious) or Category 2 (other). Tackling these hazards will make more homes healthier and safer to live in. Landlords are advised to assess their property to determine whether there are serious hazards that may cause a health or safety risk to tenants. They should then carry out improvements to reduce the risks.
The Tenancy Deposit Scheme
The Tenants Deposit Scheme (TDS) government legislation came into effect in April 2007. All deposits taken for an Assured Shorthold Tenancy after that date must be covered by the scheme. The scheme is designed to encourage landlords and tenants to make a clear agreement at the start of the tenancy on the contents and condition of the property.
What Is An Assured Shorthold Tenancy?
The Assured Shorthold Tenancy is the default tenancy for most dwellings in England and Wales. It is a form of Assured tenancy with limited security of tenure, and an important class of residential tenancy in England and Wales. It was introduced by the Housing Act 1988.
Assured Shorthold Tenancy agreements are normally arranged for a six month period, but can be agreed for a longer period, e.g. twelve months. This type of tenancy allows the tenant to remain in the property for the first six months, or initial fixed period.
An Assured Shorthold Tenancy entitles the landlord to a possession order immediately after the initial agreed period, which is usually for six months. The landlord is therefore able to evict the tenant after the initial fixed term without a legal reason. If this is the case and the landlord does not wish to renew the tenancy then they are obliged to give at least two months notice to end the tenancy.
However, if both the tenant and landlord are happy with the agreement another tenancy can be agreed, for a new fixed period.
Energy Performance Certificates (EPC)
Since 2008 all landlords must have a valid EPC for their property available for any applicant or tenant viewing a property.
The certificate is valid for 10 years. It scores a property on energy efficiency from A (most efficient) to G (least efficient). It outlines ideas to improve performance. An EPC can only be carried out by a certified Domestic Energy Assessor. It will also show a buildings environmental impact by indicating its carbon dioxide emissions.
EPCs provide recommendations for reducing the amount of energy your tenants will use and lists:
- Suggested improvements, like fitting loft insulation.
- Possible cost savings per year, if the improvements are made.
- How the recommendations would change the energy efficiency rating of the property.
- You don't have to act on the recommendations in the report, however if you decide to do so, it could make your property more attractive to tenants by being more energy efficient.
The Energy Act 2011 includes provisions to ensure that from April 2018 it will be unlawful to rent out a residential property that does not reach a minimum energy efficiency standard. Currently this is an E rating so G rated properties will be illegal by April 2018 for all new tenancies.