Buy-to-let Investor Guidance

Buying your Property

Contact a recommended letting agent for advice on the local housing market and expected rent.

Aim to find a property with nearby parking (preferably a garage), transport links, shops, universities and other amenities.

Letting your Property

Don't forget it may take some time to find a tenant, so be prepared to wait several weeks (or even months)before the property is let. This should not be viewed as a short term investment.

Make sure you get references for all your tenants from a reliable source i.e. previous landlord and/or current employer.

Maintain regular contact with your tenant once they move in. If they have any issues or requests, make sure you respond quickly to prevent problems escalating. If your tenant is unable to meet a month's rent payment, be understanding, and suggest postponing the rent, breaking it down into smaller payments or another suitable alternative.

Organisation is key! Make sure you keep your finances and paperwork in order at all times.

Maintaining your property

Stick to neutral decorations and furnishings because not everyone will have the same tastes as you

Regular maintenance is essential i.e. retouching paintwork and servicing gas and electrical appliances. We recommend that you find a reputable local tradesman, who you can rely on to keep on top of necessary work for you.

Make sure you keep up-to-date with relevant laws and tax regulations governing property investment by staying in regular contact with your lawyer, letting agent and financial advisor.

Legal Advice

Lender Contractual Information

Before you let a property you have a mortgage on, you need get permission from your mortgage company. Not doing so will breach contractual terms and conditions which could have serious consequences.

Tenant Contractual Information

The tenancy agreement outlining all the legal contractual information with your tenant is referred to as the Assured Shorthold Tenancy (AST).

The AST sets out clauses for you and your tenant to adhere to throughout the tenancy. You must make sure all your tenants are listed on the AST with all signatures included.

Always include your own address on the AST - if this is not in England or Wales (as required by the Landlord and Tenant Act 1987), you will need to provide an alternative contact address in England or Wales or use a recommended letting agency instead.

Your tenant has the right to challenge the rent if they believe it is too high. They can do this in the first six months by contacting the Rent Assessment Committee.

The AST gives you the right to recover possession of your property at the end of the fixed term (or after the first 6 months if there is a short fixed term or no fixed term at all). It is against the law to evict your tenant without a court order, so make sure you keep the term relatively short for a new tenant to avoid any possible difficulties occurring.

If your tenant refuses to vacate the property after the fixed term of the AST, you can obtain a possession order within two months under normal circumstances (see below).

Landlord Obligations

You are legally obliged to undertake any property repairs required during the tenancy. This includes repairs to the property structure, exterior, roof, drains, gutters, garden, as well as all heating, electrical and water appliances (more information below). Your tenant is, however, responsible for the general condition of the property's interior and any damages they cause themselves.

You must insure the property and its contents yourself, however your tenant will need to get their own separate insurance for their own possessions. It is recommended that you give them a copy of your insurance policy to avoid any disputes over insurance claims.

The AST allows you to inspect the property at any time during the tenancy term, however you must always ask for the tenant's consent.

Tenant Obligations

Your tenant is legally obliged to pay all utility bills themselves, which should be registered in their name. Any that are registered in your own name must be noted in the AST.

To avoid breaching any planning regulations, your tenant must use the property solely for residential purposes, and should not let the property to anyone else who has not been checked and approved.

Regulations for Letting Properties

You must arrange for a yearly inspection to be carried out on all electrical appliances in the property. This must be carried out by a National Inspection Council for Electircal Installation (NINEIC) inspector. All electrical items must also comply with regulations.

If there is gas at your property, you must obtain a landlord's safety record from a CORGI (Council of Registered Gas Installers) registered engineer.

All upholstered furniture must comply with the Furniture and Furnishings (Fire Safety) Regulations 1988. All compliant furniture will have a label in the cushioning. Smoke alarms are also recommended throughout the property.

For more information visit www.hse.gov.uk

This includes any property with 2 or more tenants who do not form a single household e.g. students. Landlords with HMOs in England and Wales of 3 or more stories, and with 5 or more tenants, must apply for a licence, outlining certain regulations regarding safety, amenities and landlord requirements.

This was introduced on 6th April 2007 to ensure that all tenant deposits are held securely until the end of the tenancy, to avoid possible disputes. There are 2 schemes:- (i) a custodial scheme, which is free to use and pays out apportionments at the end of the tenancy; (ii) an insurance-backed scheme, where the landlord retains the deposit but pays a fee to a 3rd party insurer to protect the deposit payment. With both schemes, disputes are to be settled by the Alternative Dispute Resolution (ADR).

Eviction & Repossession

If you wish to repossess the property after the fixed term, you must provide an official Notice Requiring Possession. A letter asking the tenant to leave is not enough.

The notice period must be a minimum of 2 months, and the official document should ideally be delivered to the tenant by hand to ensure they receive it.

If you wish to evict your tenant before the term ends, there is a legal process you must follow. You should consult a solicitor before taking any action. Offering to pay your tenant to leave may be a cheaper and less time-consuming alternative.

Forcing a tenant to leave by cutting off utility supplies or any other form of harrassment is against the law. You only have the right to evict your tenant if the AST contains such a clause and if you have a 'statutory ground' for possession i.e. if the fixed term has ended (a 'short hold ground '), if the tenant is in serious arrears of rent of more than 2 months, or if the tenant has breached any of the terms of the tenancy agreement.

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