The UK rental market has seen an unwavering demand over recent years and despite the high rates of interest and concern over property prices demand remains strong in the South East.
Why is demand for rental property so high?
The reality is that fewer houses are being built, buying houses is increasingly difficult for young people and demand for accommodation remains high.
Whilst landlords have been on this Government’s hit list for some time (mortgage interest restrictions and stamp duty increases) property is still an attractive investment for many with increased rentals and that feeling of security in that you are investing in something tangible which despite the press is still largely maintaining its value.
What’s happening in the property market?
The average price of a residential property in the UK dropped by just 0.4% in September to £278,601, marking the sixth consecutive month a decline was reported.
However this is after a period of solid growth and is considered by many commentators as simply a correction of the market.
The doomsayers will however say that there is likely to be a collapse in the property market.
If this happens it will be despite the huge demand for rental properties which so many areas are experiencing.
If you therefore haven’t been put off the negative press then how do you get started on the property market.
How to approach property investment
The key is to approach property rental with the same diligence, professionalism, and forward-thinking as one would with any other business.
Because a successful landlord isn’t just about collecting rent; it’s about offering a safe, compliant, and well-maintained property to tenants.
Legal Compliance Isn’t Optional, It’s Essential
Like any business, the rental property sector comes with its own set of regulations and legal requirements.
Not only are these measures in place to ensure the safety and well-being of tenants, but they also act to level the playing field in the market, ensuring that landlords adhere to a certain standard.
Here’s a recap of the key legal matters every landlord should have in place:
Gas Safety Certificate (CP12):
Every rented property with a gas appliance is legally required to have an annual gas safety check by a Gas Safe registered engineer.
Landlords should provide tenants with a copy of the Gas Safety Certificate within 28 days of the inspection or before they move in.
Energy Performance Certificate (EPC):
Before a property can be let out, an Energy Performance Certificate must be obtained. The EPC rates the energy efficiency of a property and lasts for 10 years.
From April 2018, properties must have a minimum rating of ‘E’ to be rented out.
Electrical Safety Standards:
Landlords are required to ensure electrical systems and appliances are safe.
An Electrical Installation Condition Report (EICR) needs to be obtained every 5 years from a qualified electrician.
Smoke and Carbon Monoxide Alarms:
Smoke alarms are mandatory on every floor of the property, and carbon monoxide alarms are required in rooms with a solid fuel burning appliance.
Right to Rent Check:
Landlords must check that all tenants have the right to rent in the UK. This involves checking and copying documents that prove the tenant’s immigration status.
Tenancy Deposit Protection (TDP):
If a deposit is taken, it must be placed in a government-approved deposit protection scheme within 30 days of receipt.
Tenant Information Pack:
Landlords are obligated to provide a ‘How to Rent’ guide, either a hard copy or via email link, to tenants.
Houses in Multiple Occupation (HMO):
If renting out a property to 5 or more people forming more than one household, and sharing facilities, the property might be classified as an HMO.
Special licenses and stricter regulations apply for HMOs.
Certain areas in the UK require landlords to be licensed. Check with your local council to determine if you need a landlord license for your property.
Repairs and Maintenance:
Landlords are responsible for most repairs, including structural repairs and the maintenance of sanitary fittings.
Protecting Tenant’s Data:
Any personal data collected from tenants must be protected in line with the General Data Protection Regulation (GDPR).
Legionella Risk Assessment:
Landlords should conduct a risk assessment for Legionnaire’s disease and take necessary precautions.
Getting it right from the start
By getting the legalities right from the outset, landlords can protect their investments, maintain good relationships with their tenants, and avoid potential financial and legal pitfalls.
One great resource to ensure you are always up to date is the National Residential Landlords Association (NRLA) who have checklists to ensure you are always up to date.
Ongoing success in your property venture
The dynamics of the property rental market in the UK underscore the importance of a business-like approach.
It’s not just about providing shelter but ensuring that all dealings are compliant, professional, and beneficial to both parties.
The key to success in the rental market is understanding the importance of preparation, due diligence, and continuous learning.
At Friend & Grant we have a wealth of experience in dealing with property investors and have a deep understanding of the tax complexities of property investment and development.
To find out more please contact Darren Hughes or book a discovery meeting using the links on this page.
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The content in this blog is correct as at 15th November 2023. See terms and conditions.