What are Buy-to-Let Landlord Responsibilities?
At the start of your investment journey, especially as a professional buy-to-let landlord, it’s vital to be aware of your legal and financial responsibilities – especially towards your tenants. Getting the fundamentals right at the start of your investment will put you in good stead going into the future, mitigating issues you may find down the line. Below you’ll find a check list of the landlord responsibilities you need to uphold.
Tenancy Agreement
There are a few different tenancy agreements but the most common is an assured shorthold tenancy (AST). These contracts represent the legal right for a tenant to live in the property – whether it’s a fixed duration or on a rolling basis.
BTL Service Charges
There are some costs associated with your purchase that would need to be covered including the survey fees, solicitor’s fees, letting agent fees, administration fees, tax fees and Stamp Duty Land Tax. Maintenance costs will also need to be considered.
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BTL Insurance
As with most investments, having insurance can give you peace of mind. Landlord insurance isn’t a legal requirement but taking out a policy can help protect you. Building insurance is necessary if you have a buy-to-let mortgage and also acts as protection for your investment, mitigating issues further down the line.
Register with a Tenancy Deposit Scheme
A legal requirement if you have a Buy-to-Let property in England or Wales – You must by law, put the deposits in a scheme within 30 days of the start date of the tenancy agreement.
Buy-to-Let Landlord Legal Responsibilities:
Other Buy-to-Let landlord responsibilities include complying with all of the legal requirements asked of you.
The amount of rent you can charge is based on many different elements, including market trends that are out of your control.
No one can guarantee a certain rental income, only predict based on average and past performance.
If you can’t find tenants, you run the risk of having void periods where you can not cover your mortgage repayments. Similarly, if house prices crash, so will the value of your property. Ensure that you understand why buy-to-let is often seen as a long-term investment, markets fluctuate and generally, investors will be more interested in securing steady rental income.
Major repairs or difficult tenants can increase your costs – having a ‘rainy day fund’ can help mitigate expensive issues further down the line.
Landlord FAQs
How many landlords are in the UK?
According to the latest research by HMRC, the number of landlords in the UK now exceeds 2.65 million, showing the increasing popularity of buy-to-let across the country.
The cities with the highest number of landlords includes Birmingham (27,060), Leeds (24,450) and Edinburgh (23,200), while the London boroughs with the most landlords include Barnet (31,380) and Wandsworth (22,120).
With property prices forecast to rise by 21% over the next four years, it’s expected that the number of landlords will rise with it and the number of UK households within the private rented sector will hit 25%.
How to become a landlord in the UK?
If you’re considering how to become a landlord in the UK, the answer is relatively simple. You just need to buy a property and let it out to a tenant for a monthly return.
As the asset has grown in popularity, many people have also found themselves as ‘accidental landlords’, inheriting houses or buy-to-let properties that they start renting out.
Depending on the property you let, you may need a license to do so. This largely depends on where you’re letting or if you’re letting a house-in-multiple-occupation (HMO).
Finally, you’ll need to consider the responsibilities you’ll have as a landlord. Many of these are mandatory and required to make sure that you’re being legally safe.
At this point you may consider working with a property manager or a letting company to help you look after the day-to-day.
What is landlord insurance?
Landlord insurance is pretty self-explanatory – it’s insurance for landlords. It can protect against a variety of different things depending on how much cover you’re looking for.
It’s advisable for landlords to consider insurance, especially if they’re looking at building a wider portfolio over the long-term.
What does landlord insurance cover?
Landlord insurance in the UK can cover as much – or as little – as you want it to. The insurance itself has the capacity to cover the building from any theft or weather damage, as well as any financial losses caused by your tenant defaulting on rent.
You have the freedom to choose what you’d like your insurance to include, so this decision is completely down to you.
Do I need landlord insurance?
Landlord insurance isn’t a requisite for buy-to-let property, but with this covering everything from building damage to unpaid rent, it’s often the first thing landlords think of when purchasing a rental property.
For investors that want to protect against eventuality, it can be a good idea to shop around to find the best insurance policy to fit your needs.
How much is landlord insurance?
Average prices are helpful in many different ways, setting expectations being the most important one. However, there isn’t necessarily an average price for landlord insurance in the UK.
Landlord insurance can cover a variety of different things, so what you choose to include in your insurance policy will depend on how much you stand to pay.
What should a landlord provide in an unfurnished property in the UK?
Deciding whether you’re going to rent out your buy-to-let property as furnished or unfurnished is a fairly important decision, one which will need to be decided early on in your investment process.
If you decide to let your property unfurnished, you will just need to provide the necessities. Tenants typically expect white goods, bathroom and kitchen fixtures, flooring and curtains.
In comparison to furnished properties, which include everything from a sofa to beds and a kitchen table, the expectations for unfurnished rental properties are considerably lower, which in turn, makes your upfront costs as a landlord much lower.
While this may impact the volume of your enquiries, it does result in a lower initial outlay.
Do landlords pay council tax?
Whether or not landlords pay council tax on their buy-to-let property is a choice, with HMO landlords often including this tax – as well as bills – in the overall monthly rent.
However, many landlords also choose to exclude this tax from their rent and leave this responsibility to their tenant.