Accidental Landlords:London Rental Market

BigG10

Hi All,

Firstly...very helpful forum. Have been an observer for a while.

SITUATION
My partner and I are hopefully about to become landlords. Something we never intended to do but something we are determined to get right for the benefit of any would-be tenant and of course for our own benefit. We fully intend to be the best possible landlords we can be :-)

QUESTIONS:
1) What is the demand like for 1 bedroom flats to rent in West London? (35 mins overland to Waterloo/40 mins tube)Ours is £875 PCM with recently returned kitchen, bathroom, new laminate floors, new power shower blah blah blah? Just want a feel for the market.

2) is the market busy in Jan? All the LAs we have spoken to say it is. We had three viewings the day before our letting agent shut up shop for the holidays...we thought this was pretty good!

3) we currently live in the flat and have pets. We don't mind our future tenants having pets either. However, will having our furry friends in the flat have a detrimental effect on viewings?

FURTHER BACKGROUND
We have done our research using this site and read the new landlord thread/article. We also have 3 months back up mortgage payments ready to roll just incase as well as savings for maintenance incase anything goes wrong. We also know about tax implications and have quotes for LL insurance...what great help this place has been.

agrinnall

Do you have consent to let or are you switching to a BTL mortgage? If so then I'd say you are in a reasonable position to go ahead with your plan. Having pets may deter some people from viewing, but I would have thought that could be offset by potential tenants who have pets themselves and who will be exceedingly grateful to find somewhere that doesn't mind them.

BigG10

Consent to let. For maximum of 4 years - although dont want to let for that long. Intend to sell as not really interested in becoming a landlord long term. However, whilst we are letting, we want to get it right!!!

princeofpounds

Hi BigG10. Having rented in London many times before, it's nice to come across a landlord with a seemingly good attitude.

You shouldn't have any problems renting out a flat with good access into London as long as it is priced appropriately (which I can't advise you on as it is so street and property-specific). On top of price, the main thing is that the package you are selling is 'suitable' for the target market. No point trying to rent out a luxury family home in the middle of a sink council estate for example, at least at the price you would hope to achieve anywhere else.

The letting market is operational pretty much all the time in London, except perhaps people want to avoid moving before Christmas. For family houses, there is maybe a peak around the pattern of the school year, and for young professionals rentals (like yours may be) there is something of a peak as people graduate from universities and move to londo. But it tends not to be too dramatic because everyone is doing their own thing after a few years in the workforce anyway, with different contract ending dates and so on.

Correctly priced and marketed, you shouldn't have problems getting viewings and if the propoerty is decent I would be surprised if you didn't have an offer within a matter of weeks if not days.

The fact that you will allow pets is great, and it means that you are even more likely to be able to find a tenant as there are plenty of tenants out there with pets who find getting suitable accommodation difficult. They tend to be more long-term as a result also, which is good.

I don't think you having pets on a viewing will be an issue, except perhaps to the small minority that are genuinely allergic. And I would always make the point that the property will be deep-cleaned before handover (unfortunately agents have a poor record of lying about such things so you might not convince 100% of people). But I would think that this would be more than outweighed by the people interested in a pet-friendly property.

The main thing to do is familiarise yourself with your legal obligations, things like gas safety, deposit protection etc. etc. Too many accidental landlords get this wrong.

The other thing to be careful about it your agent. Too often they will present an attractive package to the landlord, and then gouge the tenant at the other end, effectively spoiling your relationship with the tenant and taking money out of the accommodation budget that could be spent on rent.

So don't just ask what fees you will be paying. Ask them what they will charge the tenant for credit checks, referencing, drawing up agreements and so on. You might be shocked. And remember, that all comes out of the rent budget eventually.

Any information you can get on how they behave towards tenants will be important, because remember they represent you to your tenants.

Oh, and just spotted your note about wanting to sell eventually. Be honest about this when the time comes. Give a tenant a year uninterrupted at least if you can, and plenty of notice and flexibility when you do come to sell. Avoids upsets. Nothing worse than moving into a place and then being told just 12 weeks later that the landlord is going to sell up so start searching again!

Annisele

BigG10 wrote: »

3) we currently live in the flat and have pets. We don't mind our future tenants having pets either. However, will having our furry friends in the flat have a detrimental effect on viewings?

Depends on what the "furry friend" is. Personally I wouldn't mind a cat too much, but a rat or a Great Dane would put me off. (The latter not so much because I don't like them, but because I'd think "these people think it's OK to keep a dog that size in a one bedroom flat...have they no sense?).

BigG10

Annisele wrote: »

Depends on what the "furry friend" is. Personally I wouldn't mind a cat too much, but a rat or a Great Dane would put me off. (The latter not so much because I don't like them, but because I'd think "these people think it's OK to keep a dog that size in a one bedroom flat...have they no sense?).

Completely agree...would be reluctant to allow a dog - too small and unfair on the dog! We have a cat and a house rabbit who are best of friends (yes it can happen).

BigG10

princeofpounds wrote: »

Hi BigG10. Having rented in London many times before, it's nice to come across a landlord with a seemingly good attitude.

You shouldn't have any problems renting out a flat with good access into London as long as it is priced appropriately (which I can't advise you on as it is so street and property-specific). On top of price, the main thing is that the package you are selling is 'suitable' for the target market. No point trying to rent out a luxury family home in the middle of a sink council estate for example, at least at the price you would hope to achieve anywhere else.

The letting market is operational pretty much all the time in London, except perhaps people want to avoid moving before Christmas. For family houses, there is maybe a peak around the pattern of the school year, and for young professionals rentals (like yours may be) there is something of a peak as people graduate from universities and move to londo. But it tends not to be too dramatic because everyone is doing their own thing after a few years in the workforce anyway, with different contract ending dates and so on.

Correctly priced and marketed, you shouldn't have problems getting viewings and if the propoerty is decent I would be surprised if you didn't have an offer within a matter of weeks if not days.

The fact that you will allow pets is great, and it means that you are even more likely to be able to find a tenant as there are plenty of tenants out there with pets who find getting suitable accommodation difficult. They tend to be more long-term as a result also, which is good.

I don't think you having pets on a viewing will be an issue, except perhaps to the small minority that are genuinely allergic. And I would always make the point that the property will be deep-cleaned before handover (unfortunately agents have a poor record of lying about such things so you might not convince 100% of people). But I would think that this would be more than outweighed by the people interested in a pet-friendly property.

The main thing to do is familiarise yourself with your legal obligations, things like gas safety, deposit protection etc. etc. Too many accidental landlords get this wrong.

The other thing to be careful about it your agent. Too often they will present an attractive package to the landlord, and then gouge the tenant at the other end, effectively spoiling your relationship with the tenant and taking money out of the accommodation budget that could be spent on rent.

So don't just ask what fees you will be paying. Ask them what they will charge the tenant for credit checks, referencing, drawing up agreements and so on. You might be shocked. And remember, that all comes out of the rent budget eventually.

Any information you can get on how they behave towards tenants will be important, because remember they represent you to your tenants.

Oh, and just spotted your note about wanting to sell eventually. Be honest about this when the time comes. Give a tenant a year uninterrupted at least if you can, and plenty of notice and flexibility when you do come to sell. Avoids upsets. Nothing worse than moving into a place and then being told just 12 weeks later that the landlord is going to sell up so start searching again!

This is SO helpful. Thank you.

LA we have gone with Dexters. Purely for the fact they have let out about 5 properties on our little avenue in the last few months. Although they have been bigger properties. Any opinions on dexters?

There is a 1 bed house for let on our close for the same price as ours (875pcm) but it looks to be in a state inside. Ours MAY be slightly smaller in square footage but ours has allocated parking and small well kept front garden. Also in a better state internally - if I do say so myself!

We would at LEAST let out our property for two years. Giving a tenant a secure let. We have been shafted ourselves in the past...want to get the best for our tenant!

We spent the majority of yesterday building new storage cupboards and installing new heaters and a new power shower. We do just want everything right for our tenants. Would he embarrassed and hassle otherwise!

princeofpounds

No idea about dexters. To be honest, with letting agents it's often the individual office or even individual agent who matters the most. Whilst there is usually a general 'culture' in the brand and sometimes centralised policies it's not always a great predictor of your own personal experience

Mrs_Tubbs

The LA will give your details to the Inland Revenue as the rental income is taxable. If you go down the self assessment route, make sure that you're clear who'll be filing in the return (the one who earns less) and that you fill it in properly (include info from your P60, only the interest on the mortgage is tax free not the principle) and don't leave it until January! If you file your tax return promptly, that gives you more time to pay it.

Good luck

BigG10

Thank you! My partner already does a Tax SA as he often conpletes freelance work on top of PAYE job. I also have to fill one out as I used to be an actor. We always do it ourselves. Much easier! Also doubt much tax will be due because we won't make that much from it.

00ec25

Mrs_Tubbs wrote: »

The LA will give your details to the Inland Revenue as the rental income is taxable.

no they won't, its none of their concern (that only applies where the LL is resident overseas, then the LA is under a legal requirement to deduct tax). If LL is UK resident then declaring income is down to the LL not their LA

Mrs_Tubbs wrote: »

If you go down the self assessment route, make sure that you're clear who'll be filing in the return (the one who earns less)

you seem confused: - there is no choice, it is HMRC who will decide whether an SA is to be completed, it is not for the LL to choose

you are also making the assumption that the OP and partner are not married and/or do not both own the property (either as joint tenants or as TIC) . If they are married or are both owners then your statement is wrong. The person responsible for filing the SA return is the legal owner, this could be each of them as the OP has not confirmed the ownership status.

It is not a question of choosing who has the lowest tax and thus who declares the rental income, there are restrictions depending on ownership arrangements and relationship status .
- If married the choice is none, income split mirrors ownership share exactly.
- Only if not married is the position allowed where they can make a declaration of beneficial interest and split the income as they want