The private rented sector in the UK has increased dramatically over the past ten years, partly driven by the appearance of ‘accidental landlords’.
According to the latest figures for 2017, the private rented sector accounted for 20 per cent of households in England. According to a survey by the National Landlords Association, up to 25 per cent of these properties could be owned by accidental landlords.
The term ‘accidental landlord’ is designed to distinguish between individuals who had no original intention of joining the buy-to-let market and professional landlords who invest in property for this specific reason. The opportunity now available to cash in a pension may be encouraging older age groups to move into property investment to provide an income in retirement. Alternatively, accidental landlords may have inherited a property or moved in with a new partner, thereby freeing up a property, or they may have moved for work and have been unable to sell the property they are leaving.
The worry is that this group of landlords is not familiar with its obligations, both to the authorities and to their tenants. It is not simply a case of finding a tenant and collecting the rent. If there is a mortgage on the property, the provider will have to be made aware of any change in circumstances. There are also specific statutory requirements relating to safety and insurance issues. Furthermore, you will need to engage with your tenants and foster a good relationship.
It is vital to be aware of your responsibilities. When choosing a tenant, be aware of the right to rent aspects of the 2016 Immigration Act, which places the responsibility on landlords to ensure prospective tenants have a right to reside in the UK.
As a landlord, you also have to comply with health and safety laws involving gas and electric supplies, fire safety, and the provision of a copy of the Energy Performance Certificate (EPC) to the tenant.
Inventories can cause problems at the end of a lease. Property inventory software from providers such as https://inventorybase.co.uk/ can prove useful.
Any landlord accepting a deposit from the tenant as part of the agreement must place this deposit with an approved third party under the tenancy deposit scheme (TDS).
Accidental landlords need to ensure they are engaging with the market for their own protection.