Complete Guide to Letting Property in South London
If you have a property in South London that you need to let, then we can definitely help. With more people choosing to rent in the capital than ever there is a lucrative market available on tap, but the pitfalls for landlords are numerous, so it is to rent intelligently, to the right tenants, to prevent all sorts of problems later down the line.
Your first step should be to work with us, to value and market your property, but alongside that you also need to know the issues involved. That’s where this guide can help.
In order to attract the responsible, considerate tenants, you will need to consider how you present the property. To get the highest possible price, ensure every aspect of your property looks its best for viewings and the maintenance is up to scratch.
Giving your property “kerb-appeal” and establishing a good first impression when prospective tenants pull up to a viewing is essential. A tidy and alluring exterior shows someone has made the effort and the property is well maintained. Making sure the number is clearly visible and the rubbish bins are tucked away can work wonders for getting that first impression just right.
- Declutter the interior and remove any large, unnecessary furniture to maximize the space available.
- Embrace neutral colour schemes to convey a clean, natural look.
- Undertake any necessary repairs to make sure everything is in good working order.
- Clean the property from top to bottom. Gleaming windows, spotless carpets and polished bathroom fittings can really bring out the sparkle of the property and makes a great impression on the buyer.
- Pleasant smells create a homely atmosphere. Leaving vinegar in bowls around the property for three days prior to the viewing, absorbs unpleasant odours and will leave the house smelling much sweeter.
- Clear the wardrobes and cupboard space as much as possible to provide sufficient storage space.
- Are you letting the property with furniture? Letting the property unfurnished doesn´t make much difference to the price you will receive each month, but letting the property with shoddy and broken furniture can seriously affect how much tenants are willing to pay.
Marketing is essential for attracting the right tenants. Think about how you will advertise the property. Will you display it as having four bedrooms or three bedrooms and a study? Do you want to let the whole property to one tenant or will you let the rooms out individually? These questions need to be considered as the way you present your property will determine if your tenants are younger professionals, or families with children looking to rent until they can afford to buy. Think about the area of the city you live in and the demographic of tenants who are likely to find the area desirable.
What are their needs?
We’ll help you save time with many of these questions, after all we are the property marketing experts but it’s good for you to get a sense of what is right for your property and the type of tenants you want to attract. Are you looking for non-smokers? Or people without pets? As dog ownership in London has risen by twenty percent in the last five years it may be an option worth considering to appeal to prospective tenants.
Who needs to be notified?
Before you receive tenants in the property there are some hoops that need to be jumped through. Your mortgage lender needs to be informed as they may have some restrictions on the type of tenancy you can offer.
You also need to notify the insurance company to make sure you are still covered for fire and theft. You will need to have the property insured for the duration of the tenancy. If you are letting your former home, you might have to change your insurance policy from homeowner’s insurance to landlords´ insurance. The premiums for these are not usually much higher than standard homeowner’s packages. If you are letting the property fully furnished it is recommended you take out contents insurance to protect your furniture from any damage that may be caused during the tenancy.
Lastly, if the property is owned on a leasehold basis you will need to notify the freeholder to ensure your tenancy is in compliance with the terms of a superior lease on the property. A copy of this lease will also need to be given to the tenants and certain clauses may need to be included in the tenancy agreement.
As a landlord, you will have certain legal obligations to fulfill to protect the tenants and the integrity of the property. For example, you have to keep the property well maintained and undertake any major repairs on the property. This also includes the interior of the property, like the plumbing, electricity and heating.
- All gas appliances have to be annually inspected by a Gas Safe registered engineer. Under the Gas Safety Regulations introduced in 1998 a gas safety certificate, known as the CP12, must be updated each year and a copy must be given to the tenant. Failure to comply with this measure may result in criminal proceedings.
- All electrical equipment must also be inspected and verified as safe by a qualified electrician. These Portable Appliance tests need to be regularly carried out to prevent the deterioration of electrical appliances included with the tenancy. There must also be operating instructions and safety information displayed before the tenants move into the house.
- You are also required by law to undertake “reasonable adjustments” to the property to be able to accommodate a disabled tenant.
- As of 2015, Carbon Monoxide alarms must be provided in any area of the property which contains a solid fuel burning combustion appliance. These alarms must also be maintained and fully operational when the tenants move in to the property.
- All upholstered furniture must be in compliance with the Furniture and Furnishings Fire Safety Regulations. Most furniture bought after 1988 will be labelled to indicate its compliance and it doesn’t apply to furniture made before 1950 or any bed linen items.
- If you are letting the property as a shared house and it is over a certain size, you may have to comply with additional electrical and fire safety regulations. These usually apply to properties over three stories high or with more than five occupants. These vary from council to council and you may need to get an additional license which limits the number of tenants that can legally occupy the property. If you are hoping to rent the rooms out individually it is worth checking with the local authority to see if your property qualifies.
- Any tenancy agreements signed after October 2008 need to have an Energy Performance Certificate (EPC) which displays the energy performance of the property and outlines what you can do to improve it. These must be obtained from a Domestic Energy Assessor and updated every ten years.
As a UK landlord you are required to declare the rented property to the inland revenue and will be taxed on the let accordingly. You will need to submit the relevant forms notifying the Inland Revenue before the tenants move in. Under UK tax regulations renting out a residential property qualifies as running a business and you will be taxed on your net profit once the running expenses have been taken away.
Your mortgage on the property cannot be legally considered as an expense and cannot be included in the tax evaluation. However, the interest can be considered an expense and is deductible from any profit before tax. The same often applies to loans taken out to improve and repair the property so it is worth checking with a financial advisor.
Similarly, maintenance and repair costs can be included as a business expense, but not significant improvements to the property.
Letting can make you a nice pot of money to supplement your income, but there are also expenses involved in renting out your home and these will need to be accounted and budgeted for. You will need to consider:
- Expenses involved in cleaning the property for viewings and carrying out maintenance work.
- Council tax
- Ground Rent
- Furniture and furnishings if you are letting it furnished.
- Insurance on buildings, contents and loss of rent.
- Agent fees
- Legal fees
Managing the Property
Once we have found the right tenants you need to consider how the property will be managed. We offer a comprehensive property management service which will consist of conducting credit checks on your tenants and obtaining references from previous landlords, organizing inventories and tenancy agreements, periodically visiting and checking the condition of the property and also collecting rent and arranging repairs.
To end the tenancy, you have to give two months’ notice in writing. Bear in mind that if the tenancy runs from the first day of the month, then you need to give two months’ notice from the first day of the month, even if you deliver written notice in the middle of the month, the two-month period will run from the first day of the following month.
Here is the final checklist to make sure you are all set to start the tenancy.
Check you have:
- Relevant insurance
- Permission from the mortgage lender and lease holder
- Informed the environmental health department if it’s a multiple occupation tenancy
- Furniture in accordance with fire safety regulation
- A gas safety certificate
- Had all the electrical appliances and wiring checked by a qualified electrician and they have been approved
- Informed HMRC and the council for tax purposes
Congratulations, you are now ready to let your property.