Let Agreed: What Happens Next?

Renting out your property can be a rewarding venture, whether you're an accidental landlord or diving into property investment as a new venture. However, it also comes with responsibilities, challenges, and decisions. Here's a comprehensive guide for first-time landlords. Why Rent Out Your Property? Renting out a property can provide a steady income stream, cover mortgage payments, and potentially build a portfolio of rental properties. It's a financial decision that can also be beneficial if you're temporarily living elsewhere and not ready to sell your property. How to Rent Out Your Property Decide whether you want to manage the rental yourself or enlist a letting agent to handle administrative tasks. Also, consider offering your property as a single unit or as a House in Multiple Occupation (HMO) for higher rental income, albeit with more responsibilities and expenses. Talking to Your Mortgage Lender If you're renting out your property for the first time, speak with your mortgage lender. They may require you to switch to a 'buy to let' mortgage for long-term rentals or grant permission for short-term rentals under existing mortgage terms. Understanding Landlord Licensing Some areas in the UK have landlord licensing schemes to improve property management standards. There are three types: Mandatory licensing for HMOs Additional licensing for specific HMOs Selective licensing for all landlords in certain areas Check with your local council for details and annual licensing fees. Setting the Rent Determine the appropriate rent based on property size, facilities, local market rates, and tenant incomes. Online rent calculators can provide estimates to help you set competitive rental prices. Tax and National Insurance Rental income is taxable, and landlords must declare profits after deducting expenses like mortgage interest payments. The first £1,000 of property income is tax-free. Landlords may also be subject to National Insurance contributions depending on their rental income and other factors. Legal Responsibilities for Landlords Ensure compliance with safety regulations: Conduct annual gas safety checks by a Gas Safe registered engineer Check electrical installations every five years by a qualified person Install smoke and carbon monoxide alarms as required Implement fire safety measures like fire-resistant furnishings and escape routes Right to Rent Checks Verify prospective tenants' immigration status before agreeing to a tenancy. Landlords are legally responsible for conducting right to rent checks to avoid fines. Creating a Tenancy Agreement Draft a tenancy agreement outlining both parties' obligations. Assured Shorthold Tenancy agreements are standard for private rentals in England and Wales. Online templates can provide a starting point. Protecting Tenants' Deposits Legally protect tenants' deposits using a government-backed deposit scheme. Landlords must return deposits at the end of the tenancy, minus deductions for damages or unpaid rent. Landlord Insurance Consider specialist landlord insurance to cover risks like unpaid rent or property damage. This type of insurance may include public liability, loss of rent, emergency cover, and legal expenses. Possession Rights Understand the legal procedures for regaining possession of your property, such as serving Section 8 or Section 21 notices, obtaining court orders, or negotiating with tenants. How Can butters john bee Help? If managing a rental property seems overwhelming, butters john bee offers full management services. A dedicated property manager handles tenant communication, repairs, and property maintenance, making the process easier for first-time landlords. Renting out a property involves careful planning and adherence to legal requirements. If you're considering this venture, butters john bee can provide guidance and support throughout the process. Contact us using the form below.

When it comes to rental agreements, it's important for landlords to consider how and when rent increases will be addressed. The specifics can vary depending on the type of tenancy in place. Periodic Tenancies For tenancies that roll on a week-by-week or month-by-month basis, landlords can typically only increase rent once a year without the tenant's agreement. Fixed-Term Tenancies During a fixed-term tenancy (e.g., six months), rent can generally only be increased if the tenant agrees to it. If not, any increase can only take effect after the fixed term concludes. Rent Review Clauses Some tenancy contracts include rent review clauses, outlining when and how rent increases will occur. This clause specifies the timing of the increase, the notice period provided to tenants, and the calculation method for the increase amount. If you need assistance managing payments or drafting tenancy contracts, butters john bee's property management services offer dedicated support to landlords. Learn more about Landlord Advice. Section 13 Notice When a tenancy agreement lacks a rent review clause or has expired, and the landlord wishes to raise rent, a Section 13 notice can be used. This notice requires at least one month's notice for weekly or monthly agreements, and up to six months for longer-term agreements. Determining Rent Increase Amounts Landlords must obtain tenant permission for rent increases exceeding previously agreed amounts. The increase should also align with local average rents for similar properties. For instance, if one-bedroom flats in an area rent for around £600 per month, it wouldn't be fair to ask £900 for a comparable property in the same location. Notice Period for Rent Increases Landlords must provide adequate notice before increasing rent. For weekly or monthly payments, one month's notice is required. For yearly tenancies, landlords must provide 6 months' notice. Remember, rent increases during fixed-term tenancies can only occur if explicitly allowed by a rent review clause in the tenancy agreement. Proposing a Rent Increase Landlords can propose rent increases by: Renewing a tenancy agreement at the end of the fixed term with an increased rent Agreeing to a rent increase with the tenant and documenting the agreement Using a 'Landlord’s Notice Proposing a New Rent' form to increase rent after the fixed term ends Tenant Response to Rent Increases Tenants can refuse a rent increase and challenge it through a tribunal process (e.g., Section 13). During this time, they must continue paying rent at the existing rate. If landlords and tenants cannot reach a rent agreement, the tenant may decide to vacate the property. For expert advice tailored to your local area, butters john bee offers comprehensive support to landlords and tenants alike. Contact us!