It has been reported today that house prices have taken a dip this month leaving questions about whether now is the right time to sell.
The dip has been attributed to the influx of new properties to the market since the recent scrapping of HIPs and as many predicted, supply now outweighs demand.
Yet, on the other hand, demand for rental property is at an all time high and with serious shortages of good rental housing stock, sellers would be wise to give the option of letting out their property some consideration.
If you are thinking about becoming a landlord, here are our top tips:
- Consent to Let - you must (at all times) inform your Mortgage Lender of your intention to let your property. This is commonly refereed to in the Industry as a “Consent to Let”. Most Lenders are fine with this and some ask you to change the product that you are on to a Buy to Let mortgage or charge you a flat administration fee.
- Landlord Insurance – you must have specialist landlords insurance on your property when you are renting it out. If you do not inform your current buildings insurer you may risk invalidating your policy.
- Tenancy Deposit Scheme (TDS). This is now a legal requirement and landlords face big financial penalties if caught out. For all tenancy agreements that started on or after April 6, 2007, landlords are required to protect their tenant’s deposit using one of the Governments authorized schemes. For more information, visit www.direct.gov.uk.
- Gas Safety Regulations – It is a legal requirement for you to provide a copy to each of your tenants of a valid Landlords Gas Safety Certificate which has been carried out by a Gas Safe Registered Plumber and is usually valid for a period of 12 months.
- Energy Performance Certificates (EPC) – Landlords are be required to provide a copy of the certificate during the lettings process. Even though Landlords are not legally required to carry out any suggested recommendations in the EPC it is always worth considering that tenants may use this as a deciding factor when choosing a property to rent. The EPC is required by law when a building is constructed, sold or put up for rent and can only be produced by an accredited Energy Assessor.
- Tax Liability - It is wise to consider that as a Landlord, you are effectively running a business and will need to declare and income and expenses to the Tax Office – Any good accountant should be able to advise you on rental income tax.
- Keys – Make sure you have enough sets of keys cut for each of your tenants.
- Money – Do not release the keys to the tenants until you have your deposit and first month’s rent which is cleared in your bank account.
- Mail Redirection – ensure that you have all of your post re-directed.
Think prices will continue to fall for some time but if I had a property that I didn’t need to live in I would rent it out until the market gets back to ‘normality’ in the next 5-10 years. It depends what your individual requirements financially are though.