Advice to landlords
We have put together some Frequently Asked Questions & Concerns – the answers we hope will assist you in the letting of your property.
Is there a demand for rented property and how long will it take to find a suitable tenant?
This varies from time to time and area to area but our experience suggests that there is always a high demand for quality residential property at rentals that are competitive within the marketplace.
How much rent will I achieve for my property?
This will depend on a number of factors to include location, condition, accommodation, facilities and level of equipment/furnishings. At Wilkinson Grant & Co , we offer a free, no obligation Market Appraisal and will advise you of the exact amount of rent we feel is realistic in the current marketplace. We will also suggest any improvements or alterations which would help to encourage a swift let. If you would like to arrange a Market Appraisal with one of our experienced Valuers please call 01392 455920.
Will we have any income tax liability from income derived from letting our property?
Income received from rented property is subject to Income Tax. There are some expenses, which are treated as tax deductible. We strongly recommend that you consult a tax specialist or by accessing HMRC website on www.hmrc.gov.uk for further advice. In accordance with the Finance Act 1995, HM Revenue & Customs (HMRC) has introduced a system of Self-Assessment for all the landlords who live overseas. Overseas Landlords may apply to HMRC for a certificate of Self-Assessment in order for rents to be paid over gross. Wilkinson Grant & Co would strongly recommend that all overseas Landlords apply for this. However, in all other cases Wilkinson Grant & Co are required by law to deduct the tax for all overseas Landlords at the basic rate from the net rental income and pay this on a quarterly basis to HMRC.
Do we let our property furnished or unfurnished?
The choice is yours as there is little difference in achievable rent. The current Housing Act does not differentiate between furnished and unfurnished tenancies in cases of repossession.
What about inventories?
We thoroughly recommend that you do not let your home without a Schedule of Condition/Inventory being carried out. We outsource to a company who have more than 20 years’ experience in the industry. The Schedule of Condition/Inventory at the commencement of the tenancy and Checkout Report will be at your expense. A signed copy of the report will be kept on file (for managed properties) which will be referred to by the inventory clerk, when she visits the property at the end of the tenancy, to carry out the Checkout Report. For Tenant Find and Rent Collection properties, Landlords will be sent a copy of the inventory.
Should we inform our Building Society/Bank of intention to let? Yes. Failure to do so may invalidate the terms of your mortgage.
Are there any rules and regulations to which I am bound as a Landlord?
There are many rules and regulations to consider before letting your home and below we outline the principles of the three most fundamental rules as follows:
(a) Fire & Furnishings (Fire)(Safety)(Amendment) Regulations 1993
These regulations came into force in March 1993. Broadly speaking the regulations require that all soft furnishings, upholstery or upholstered furnishings (including beds, mattresses, pillows, settees, armchairs, scatter cushions and bean bags) should conform and comply with earlier fire safety regulations which have been in force for some time, controlling the sale of such goods. The furnishings must comply with the following three tests, each of which measures the flame retardant properties of the furnishings: The Cigarette Test, The Match Test and the Ignitability Test.
(b) Gas Safety (Installation and Use) Regulations 1998
All landlords who let property with gas appliances are subject to this act. This not only includes gas fires and boilers but other appliances such as cookers, hobs and portable heaters.
(i) What must I do to comply? If your property contains gas appliances, they must be serviced on an annual basis and any remedial work undertaken to bring the appliances up to standard. In addition, the engineer must provide a record of the inspection, part of which must be supplied to the tenant(s). Anyone contracted by a landlord to install, repair or service gas appliances must be GAS SAFE registered.
(ii) Who should organise the inspection/service?
For Managed Properties, Wilkinson Grant & Co Ltd, as your agent, are happy to arrange for the initial service and the annual renewals. Furthermore, we will obtain the certificate and ensure that the tenant(s) has their copy. If you wish to use a particular contractor or arrange your own check, take care to select a GAS SAFE registered engineer and ask for the certificate. For Tenant Find and Rent Collection properties, then you will need to provide us with the necessary inspection documentation prior to a tenancy commencing.
(c) Electrical Equipment (Safety) Regulations 1994
These regulations state that all electrical equipment over 50 volts must be safe and also satisfy requirements relating to sleeving of pins on plugs, colour coding of main leads, labelling of cables and fusing information. Although the law does not say that the electrical equipment has to be tested, the best way to protect yourself from prosecution is to have relevant appliances tested annually by a suitably qualified electrician.
(d) Legionnaires Disease
These regulations came into force in 2013. Legionellosis is a collective term for diseases caused by legionella bacteria including the most serious Legionnaires’ disease, which is a potentially fatal form of pneumonia and everyone is susceptible to infection. Under general health and safety law, as an employer or person in control of a premises (e.g. a landlord), you have health and safety duties. You are responsible under The Approved Code of Practice for control of legionella bacteria in water systems to carry out a risk assessment to establish any potential risks and implement measures to either eliminate or control these risks.
(e) Carbon Monoxide Detectors
Changes were made to some of the building regulations in October 2010, including those relating to carbon monoxide detectors driven by health and safety concerns. One of the most significant changes now requires that a carbon monoxide detector be fitted in any rooms that have either a replacement or new fixed solid fuel-burning appliance installed. A gas safe engineer will be able to advise you on the correct location and position for detectors.
(f) Smoke Alarms & The Building Regulations 1991:
These regulations require that all properties built since June 1992 must be fitted with mains-operated, interlinked smoke detectors/alarms on each floor. Properties built before that date do not have such a statutory requirement, but Wilkinson Grant & Co recommend that the Landlord should consider the installation of mains-operated, interlinked smoke detectors/alarms in his property. New regulations come into force in October 2015 where all rental properties are required to have working smoke alarms and carbon monoxide detectors installed in all residential properties.
Are there any risks?
When letting residential accommodation, it must be accepted that a speculative venture is being undertaken and tenants do not always adopt the same standards of care and attention that an owner/occupier would. In addition, there is always a risk that they may default in payment of rent. The service that we offer has been created to minimise such risks, although it must be realised that they still exist. However, set against these risks is the fact that you will be retaining your capital investment and, if it is your home, you will be preserving it until such time as you may wish to return. We do recommend taking out legal and rent protection insurance and will be pleased to discuss this with you.