What Landlords Need to Know About Letting Their Property in London
London isn’t the only city in the UK for lettings. In fact, Northern Powerhouses, as well as plenty of towns and cities around other parts of the UK, are proving to be rental hotspots. Which is why this is the first in a series of posts looking at being a landlord in the UK.
We thought London was the best place to start, what with it being the UK’s capital. With more than eight million people living in the city, and with renters outnumbering homeowners, London offers a strong rental market.
If you’re thinking of investing, are a first-time landlord, or simply want to brush up on your knowledge, we’ve got you covered. Our guides to being a landlord will tell you everything you need to know about letting your home in a particular town or city.
So, without further ado, here is what landlords need to know about letting their property in London.
Where should I invest in London?
It’s all about the yields when it comes to investing in a rental property. A rental yield is how much income a property generates compared to its overall value. The higher the yield, the better the deal. London has some of the most expensive property in the UK, which means yields are typically lower than in other cities and towns.
However, it also has the most in-demand rental market, so it’s not all bad news. Being a landlord in London means there will be plenty of renters to choose from. But where should you be looking for an investment property?
Ideally, you want to look for areas with potential — postcodes that are undergoing, or have recently undergone, regeneration. There are plenty of areas along The Elizabeth Line (Crossrail) that will increase in price (rental and sales value) within the next few years but are affordable now.
East London’s Leytonstone, North London’s Tottenham, South London’s Woolwich and West London’s Uxbridge are all areas where property value is more affordable and is likely to rise over the next five-or-so years.
How do I instruct an agent in London?
Whether you’re thinking about buying an investment property or have one already, instructing a letting agent is your best bet for letting it quickly. There are two main types of agents: high-street and online agents.
High-street agents charge on a commission basis, taking a percentage (anywhere between 8–15%) of your monthly rent, while online agents charge a one-off, flat fee — usually around £150. A high-street agent tasks one of their letting negotiators with conducting viewings. Online agents allow you to do the viewings yourself.
As an online agent, we clearly believe that our model is the way to go — especially at mashroom, where you can team up with your outgoing tenant for a smoother lettings process.
Whichever route you go down, make sure you choose an agent that is transparent about costs, has a good method for marketing your property (they should be on all the major portals at the very least), and provides full-on customer support.
What are my responsibilities as a landlord?
As a landlord, you will have specific responsibilities to your tenant. Here are some of the most important ones:
- Right to Rent—you must see proof of a tenants’ immigration status to confirm if they are legally allowed to rent in the UK. A passport will suffice. Failure to check is illegal.
- EPC—It is a requirement to have an Energy Performance Certificate in place before letting your home.
- Gas Safety Certificate—Landlords must have a valid Gas Safety Certificate before letting their home.
- Tenancy deposit protection—Landlords need to protect a tenants’ deposit with a registered scheme within 30 days of receiving the security deposit.
- Repairs—You are obliged to repair any structural problems that may arise during the tenancy, while also making sure that gas, water and electric supplies are safe.
- Entry notice—You need to provide at least 24 hours notice to a tenant before entering the property without them being present.
- HMO—Landlords wishing to let under “House of Multiple Occupation” rules need to get an HMO license. An HMO is when you let to at least three tenants (unrelated) who make up one more than one household.
Anything else I should know about being a landlord in London?
You also need to decide factors such as minimum tenancy length, will the property allow DSS tenants, whether it will be pet-friendly, and if you’re looking for sharers, single or joint tenants.
Before you put your property on the lettings market, you need to set a monthly rental price. Speak to your letting agent if you’re unsure about how much you should charge.
Being a landlord in London
London is a great place to own an investment property. It’s one of the most exciting and vibrant cities in the world and blends old and new like nowhere else.
If you have an investment property in London, you can look forward to high rental demand and being able to say that you’re part of one of the world’s most important cities.