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Renting a House in the UK

Renting out a house

There are several options open to you when renting out your house and several caveats which you should be careful to avoid. Before you do anything, check that you are allowed to let out the property. If your house is mortgaged you will likely need the permission of the mortgage lender – speak to your lender early as it may take some time to get the relevant paperwork arranged. Equally, if you lease all or part of the property you will need the lessor's permission to sub-let. Part-owners with a Housing Association will fall into the latter category and should check with the Housing Association for their permission. Otherwise, if you own the property you will likely be in a position to do with it as you will, including renting it out.

Finding a tenant

If you have the time and the energy you can retain all of the duties of a landlord including liasing with your tenant, arranging maintenance, performing appropriate credit checks and taking up references. Alternatively for a percentage (usually 10% - 20%) of the rental income you can retain an agent to take on much of the time consuming work involved in being a landlord. Agencies have established means of advertising your property e.g. through their web sites, in newspaper display advertising and on their rentals list. If you opt not to use an agency you can find tenants through classified advertising in newspapers, on the web, through a local 'whats on' magazine or through your workplace. Often word of mouth will attract tenants with whom you have a link already – and may consequently be better tenants.

Formalities

You and your tenant will require a contract to record your agreement and spell out exactly who is responsible for which contingencies. A suitable contract can be drawn up by your lawyer or purchased through a legal stationer. You should always take professional advice on any areas which you have doubts about. It is normal to ask the tenant for a security deposit of around one months rent to cover damage incurred during their occupancy. Normal wear and tear is however expected and should not be classified as damage when it comes time to return the deposit.

If you rent out the house in a furnished condition you should take an inventory of the contents and make it available for the tenant to check. The tenant will be responsible for the council tax on the property, and will normally be responsible for arranging their own contents insurance. You should of course protect your investment in the property by maintaining building insurance.