Whisper it quietly, but the once prosperous buy-to-let market in the UK has stagnated somewhat of late, following a series of government clampdowns and rising base and mortgage rates on these shores.
For example, a 3% surcharge in stamp duty was added to additional property mortgages in 2016, while mortgage interest relief for landlords has was also reduced from 40% to a flat rate of 20% in 2017.
Still, if you want to enter into this market and rent out your property, there are a couple of important considerations to keep in mind. Here are some of the most important:
#1. Get Permission to Rent Out Properties
Let’s start with the basics; as you can’t legally rent out or sublet your property without the requisite permission.
More specifically, you should note that most mortgage lenders don’t allow formal buy-to-let arrangements, while even informal subletting could contravene the terms and conditions of your mortgage agreement.
Ideally, those of you who want to rent out your property will have to take out a buy-to-let mortgage, or at least this upfront with your lender before committing to an agreement.
#2. Take Responsibility as a Landlord
As a landlord, it’s also important to note that the fruits of this endeavour come with significant responsibilities.
For example, it’s crucial that you’re accountable for the safety of your property and its tenants, so you’ll gave to carry out annual gas and electricity checks while providing certification that the work is up to standard.
To this end, you’ll have to install functioning carbon monoxide and fire detectors in your property, while these will also have to be tested as part of your wider electrical checks.
Similarly, you’ll be responsible for insuring the structure of the property and paying for any accidental damage that impacts on this. Conversely, the tenants will need to take out contents insurance to safeguard their own material possessions.
#3. Make Sure That the Property is Habitable and Communicate Clearly with Tenants
When providing a property to tenants, you have a responsibility to ensure that this is clean, safe and ultimately habitable.
Failure to meet these standards will put you at odds with your tenancy agreement, placing you at risk of legal action in the future.
On a similar note, it’s crucial that you look to communicate clearly with your tenants and ensure that they understand their own responsibilities when renting your property. For example, you’ll need to stipulate what the tenant can and cannot do with regards to decoration, whether the property is furnished or not.
Of course, liaising with a letting agency can help in this respect, as it enables you to delegate responsibly for the management of your tenancy agreements and frees up more of your time for work and socialising.