If you are thinking of letting your property this brief guide will lead you through and help you to understand the procedures if you are new to the process. If you have a query about any of the following points our friendly and knowledgeable staff are happy to answer your questions.
Congratulations - your property is now let!
Letting a property is a serious business, whether you are an investment landlord or a private individual letting your home for the first time. It demands careful planning, from the initial marketing to the time the tenants move in and beyond. As a landlord you need a professional agent who will look after your interests and, at the same time, make your life as stress free as possible.
Your property is a major investment so it is important that you are aware of your responsibilities as a landlord and know the best way to optimise your investment.
This guide is designed to offer comprehensive information about all aspects of letting a property whilst giving you an insight into the level of care we put into our service.
The first stage towards letting your property is to invite us to carry out a ‘Lettings Appraisal’. We provide this service free of charge and without obligation.
Every property is different so, in assessing rental value, we take account of the size of accommodation, condition, location and current demand. Most importantly, we have the knowledge of other similar properties currently being offered for rent and historic information on rents achieved.
During the appraisal appointment we will advise you of any action you could take to maximise the rental income and improve the property’s desirability to potential tenants.
One of the first decisions to be made is whether to let your property furnished or unfurnished. The advantages of letting unfurnished are:
Unfurnished lettings generally include the following:
You may choose to let your property furnished - often the preferred option for corporate or overseas tenants. If so, you need to be aware of the following:
First impressions count – the best presented properties do let more quickly and it is important to ensure that the property has all the necessary repairs redecorating carried out and is professionally cleaned prior to the start of the Tenancy.
Grey & Co can advise on the level and type of furnishings, fittings and appliances required and whether redecoration or other improvements are advisable.
At Grey& Co we fully understand that excellent presentation and maximum exposure of our clients’ properties play key roles in securing suitable tenants.
Upon receiving your instruction, our team will start the process of finding a suitable tenant. Prospective tenants who are registered on our extensive database will be contacted by telephone, text and email or post. A description, photographs and a location map will be distributed and it will be added to our property list. A selection of properties will also be included in our window displays. All internet advertising will be updated regularly in order to ensure continued enquiries. We advertise pro-actively and will continue to do so until a suitable tenant has been identified.
The internet has become an essential tool in the marketing of rental properties. Over 70% of people moving home use this medium to search for a property. Our property details are updated instantaneously, thereby accelerating the lettings process.
We also receive hundreds of enquiries via our website www.greyandco.net where we also have our own digital TV channel, or just type tv.greyandco.net into your browser. In addition we invest heavily in marketing our properties on three of the nation’s property websites: rightmove.co.uk, zoopla.co.uk and primelocation.com.
In particular, we are the only local agent able to advertise property in the International Property Centre in Park Lane London, providing access to the lucrative international investor market.
We are also members of The Guild of Professional Estate Agents
Statistics show that one in five house moves in the UK are as a result of job relocation.
We have built successful and long standing relationships with Banks, Embassies and International Corporations. We maintain contacts with the most prominent Relocation Agents and are invariably the first port of call when they are searching for property on behalf of clients in the areas we cover.
We will discuss every landlord’s particular requirements in detail and will find the most suitable tenant for you and negotiate any special conditions that you required and ensure that these are properly inserted into a tenancy agreement.
We carry out strict referencing procedures, using a specialist independent referencing company who demand the highest standards in the industry. This essential and detailed process gives us an understanding of tenants’ personal and financial circumstances. We will usually always include rent guarantee and eviction insurance free of charge for the first twelve months of the tenancy.
If you have taken out a mortgage on the property you are letting, which is not a buy-to-let mortgage, you will need to obtain the consent of your mortgage lender. It is very unusual for them to refuse permission but most will charge a small administration fee for giving consent. In turn, they may require information on the type of tenancy agreement you intend to use and the length of the tenancy and they will require certain notices to be served on the tenant. They will probably also require reassurance that a professional agent is being instructed.
When the tenant signs the agreement we take the initial one month rental payment and the security deposit. The level of deposit varies but it is generally the equivalent of one months rent. We always ensure that funds are cleared before the tenant is allowed to take up occupation. At this time we also ensure that a standing order has been set up for future rental payments.
As part of the Housing Act 2004 the Government has introduced tenancy deposit protection for all Assured Shorthold Tenancies (AST) in England and Wales where a deposit is taken. All deposits, paid under an AST, now have to be registered with a government approved scheme within 30 calendar days of receipt.
As a company we use The Deposit Protection Centre(DPS), we will ensure that all deposits are submitted and that the necessary prescribed information id given to the tenants prior to occupation.
In case of a dispute the DPS provides for the case to be dealt with by an Independent Case Examiner. The examiner is an impartial, qualified expert who will make a decision and this helps avoid the need for potentially protracted litigation.
In addition to the rent, tenants are responsible for paying water charges, council tax, gas, electricity and telephone bills.
These are clearly determined in Section 11 of the Landlord and Tenant Act 1985. The landlord will be responsible for maintaining the structure and exterior of the property, heating and plumbing installations and dealing with other routine repairs. If the property is leasehold, the landlord will also be responsible for paying the service charges and ground rent.
The tenant has a duty to take proper care of the rented property and use it in a responsible way, pay the rent and keep to the terms of the tenancy agreement and the property’s lease if leasehold. If the tenants cause damage to the property, they are usually responsible for the cost of repair or replacement providing it is not deemed fair wear and tear.
Landlords should ensure that they have adequate buildings and contents insurance cover in place including all fixtures, fittings and white goods (or plumbing and heating installations). Tenants are responsible for insuring their own contents and personal belongings. We will make every effort, but cannot guarantee to ensure, that a tenant takes out personal contents insurance.*
* Please note that standard homeowner insurance policies will usually not suffice once a tenant is in residence as you are no longer the owner occupier.
It is also important to check on cover periods should the property is empty for any long periods of time, although our tenancy agreement does show that the tenant has a responsibility to inform us if the property will be left empty for more than 14 days. We recommend that you check your policy thoroughly.
If the property is leasehold, the lease will specify whether or not it is necessary to obtain permission to sublet from the Freeholder. It is essential to clarify the situation before marketing your property as some leases place restrictions on the type of subletting that will be approved, or they may ask for a copy of the tenancy agreement and make a small charge for approving it.
It is essential to have a comprehensive tenancy agreement and detailed inventory/schedule of condition prior to each tenancy. We will arrange this on your behalf where required.
Grey & Co use an approved Tenancy Agreement which has been carefully designed to protect the landlord’s rights to possession, help control the tenant’s activities and comply with standard mortgage lender requirements. Tenancy agreements are normally for an initial term of 12 months, however shorter or longer-term tenancies can be negotiated depending on individual landlords’ circumstances, and include a break clause if so desired.
The Housing Act 1988 specifies different types of tenancy and, whilst there are several types, it is almost certain that the tenancy of your property will either be an ‘Assured Shorthold Tenancy’.
It is essential to have an inventory/schedule of condition prior to each tenancy. We have our own qualified APIP(Association of Professional Inventory Providers) staff members who can carry this out on your behalf.
At the end of a tenancy the property is inspected against the inventory and any damage or deterioration to its condition is noted. The tenant is responsible for the cost of rectifying any damage, over and above what is considered to be fair wear and tear caused by them at the property.
Legislation is now weighted heavily in a tenant’s favour. It is therefore necessary to provide properly prepared and accurate inventories/schedules of condition in order to protect the landlords’ interests.
We offer three levels of service to accommodate the differing needs of our clients:
This service is suitable for ‘experienced’ landlords, who wish to collect the rent and manage their property themselves. This service is only recommended for landlords who have the necessary knowledge of the Housing Act, the Gas, Electrical and Fire Regulations and who have the necessary experience to effectively manage their property.
Advising the likely rental income. Marketing the Property. Conducting viewings with prospective tenants. Applying for appropriate references. Negotiating the terms of the tenancy between landlord and tenant and drawing up the tenancy agreement. Collecting the first month’s rent and security deposit. Arranging an inventory and schedule of condition prior to the commencement of the tenancy if required, and registering the deposit with Deposit Protection Scheme.
This service is available in addition to our Letting Only Service for landlords who require the service of someone to collect rent and chase arrears. We can also arrange to pay bills on the Landlord’s behalf.
We offer a comprehensive management service suitable for landlords who prefer not to have the responsibility of dealing with day to day issues. This service is strongly recommended for overseas landlords, clients who are new to letting a property or landlords who prefer not to deal with day to day management.
In addition to the Letting and Rent Collection Services, the Full Management Service includes:
It is essential that your property manager is experienced and knowledgeable about property to ensure that money is not wasted on unnecessary repairs or outgoings and the return on your investment is protected.
Our property managers deal with any maintenance issues on our fully managed properties, and arrange essential repairs and payments to contractors. Our prime concern is to ensure that the property is maintained, on your behalf, in good condition. When appropriate, we will advise you of any improvements that may be required.
Unless you have preferred contractors, we will use one of a group of contractors who have proved their reliability and good workmanship. We have built up solid relationships with reliable contractors to try to ensure prompt service at a reasonable cost.
The accounts team at Grey & Co try to ensure that rent is paid on the due date and passed on to you as quickly as possible. Statements of rental income and expenditure are prepared every month to ensure that you have full information for yourself and for your tax advisor.
The tenant pays rent directly to Grey & Co and commission is collected on the basis agreed in the tenancy agreement.
Grey & Co carry out several routine visits to the property during the term of the tenancy if we are providing a full management service.
Many tenants extend their tenancy on an annual basis. Grey & Co will negotiate a rental increase on the landlord’s behalf (when applicable) and will draw up an Addendum for the new term. If notice is not served on the tenant, the tenancy automatically continues on a statutory periodic basis.
If you are a landlord resident in the UK, your net income from your investment property is subject to income tax. The level of tax depends on your other income. If you are already a higher rate taxpayer, tax will be payable at the higher rate.
The normal method of reporting your taxable assets to the Inland Revenue is a Self- Assessment Tax Return form. We strongly advise that you take independent advice from a tax specialist.
At present, the following deductions can be made from your rental income to arrive at the net income, which is subject to tax:
The Non-Resident Landlord (NRL) scheme is for taxing the UK rental income of persons whose “usual place of abode” is outside the UK. If you are treated as a “non-resident landlord” you still have to pay UK income tax on rental income from your UK property.
Overseas landlords are responsible for obtaining their own tax exemption certificate and the appropriate forms should be submitted as early as possible as they take several weeks to process.
Unless a landlord can provide Grey & Co with a current Inland Revenue Exemption Certificate, the law obliges us to deduct basic rate tax from rents received and for us to account to the Inland Revenue on a quarterly basis. Any landlord named on the tenancy agreement, when living overseas, requires a separate Exemption Certificate. Grey & Co are registered with the Non- Resident Landlord Scheme and are fully conversant with the requirements of the scheme.
For both UK and Non-Resident Landlords, Grey & Co are obliged to inform HMRC of the gross rental received. Details on taxation are correct at the time of printing. Further information for non resident landlords and exemption application forms are available at The Inland Revenue, St John’s House, Unit 406, Merton Road, Liverpool L75 1BB. www.hmrc.gov.uk
Tel: 0151 472 6208
The following information is intended only as a guide for landlords and should not constitute a detailed interpretation of the complete Regulations.
Whilst the Regulations might appear onerous, they are designed to ensure the safety of the property and its tenants. Landlords should note that there are heavy penalties for non-compliance with these Regulations.
These cover all gas appliances, flues, meters and associated pipe work and require landlords to arrange an inspection, carried out by a ‘Gas Safe’ registered engineer, to check all gas installations. Once the engineer is satisfied that the installations fulfil all requirements, a Landlords Gas Safety Certificate will be issued, a copy of which must be held by us and given to the tenant before they move in. This certificate must be renewed annually.
Grey & Co normally arrange the initial inspection and, where the Full Management Service is required, annual inspections thereafter. It is advisable to arrange the inspection before a tenant is found, to avoid delaying the start of the tenancy. Breach of this regulation can result in heavy fines or even imprisonment.
Landlords are also responsible for ensuring that either the operating instructions are shown on the appliance or that an instruction booklet is supplied.
This Act covers all upholstery and upholstered furniture supplied by the landlord in a rented property, including beds, curtains, pillows, headboards, mattresses, cushions, sofa beds, futons etc. New compliant furniture will always carry the correct safety label.
These regulations apply to all persons who let accommodation containing electrical equipment. The electrical installation at a property and any electrical appliance should be safe and regularly checked. Remedial work should only be carried out by a qualified electrical engineer. The landlord is also responsible for ensuring that either the operating instructions are shown on the appliance or that an instruction booklet is supplied.
Grey & Co hold full details of all Regulations for landlords, if in doubt, you are advised to seek further guidance from us. Failure to comply with these Regulations may constitute a criminal offence under the Consumer Protection Act 1987.
From October 1st 2015 regulations require Landlord’s to install both smoke alarms and carbon monoxide detectors in all rented residential accommodation and Government guidelines advise both landlords and tenants check and test the alarms regularly, ideally monthly.
Energy Performance Certificates (EPC) have been introduced to help improve the energy efficiency of buildings. The EPC is required by law when a property is offered for sale or rent. It gives home owners and tenants information on the energy efficiency of the property.
Part of the EPC is a recommendation report which will list the potential rating that your home could achieve if you made changes. The report lists improvements that you could carry out and how this would change the energy and carbon emission rating of the property. You do not have to act on the recommendations contained in the report however, in the fullness of time, tenants may reject homes which are energy inefficient.
Landlords will need to provide an EPC to prospective tenants the first time you let or when you re-let your property. The EPC is valid for 10 years.
Details on regulations are correct at the time of printing.