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How to become a landlord: a guide to renting out a property in the UK

7-minute read

Simply Business Editorial Team

7 January 2022

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Who counts as a landlord? And what are your responsibilities if you become one?

In our guide on how to become a landlord in the UK, we break down the key considerations for anyone thinking of renting out a property for the first time, keeping you on the right side of the regulations.

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Am I a landlord?

There are lots of reasons why you might be thinking of letting your property. Maybe you want to try before you buy in another area. Maybe you’re moving away for work for a while. Your decision could be spurred on by any number of life events and choices.

If you're just renting out the flat or house you've been living in, you may not think of yourself as a landlord. But as far as all the rules and regulations are concerned, you’re classed as a landlord if you rent out a property.

What’s a resident landlord?

Your responsibilities will be different depending on whether or not you live with your tenants in the property you're renting out.

If you’re letting rooms in a property that’s also your main home, this makes you a resident landlord. Besides needing to keep the property safe and in good repair, there are some added benefits to this setup:

  • you get to set the agreed rent
  • you can give less notice to end a lease
  • you may be able to earn £7,500 tax-free rent a year from the rent a room scheme

Rental property health and safety requirements

All landlords are obliged to keep their rental properties safe and free of health hazards.

Below is an overview of some of the key requirements, but remember to check the government website before renting out your property.

Gas and electrical safety

Your responsibilities include making sure all gas and electric equipment and appliances are safe and in good working order. You can read more about landlord safety responsibilities, including getting a gas safety certificate.

In 2021, it became mandatory for landlords in England to carry out electrical safety checks in all rental properties. Read our guide to electrical safety standards to make sure you’re compliant.

Smoke and carbon monoxide detectors

You’ll also need to fit and maintain smoke detectors and carbon monoxide alarms.

From 2022, the rules are being extended so that landlords in England and Wales will be required to install carbon monoxide detectors in all properties with fixed appliances such as gas boilers or fires.

Our 2022 rental market predictions include information on what you’ll need to do and when the new rules could be introduced.

Meanwhile, it’s important to remember that there are slightly different rules for landlords in Scotland.

Council inspections

English and Welsh councils can decide to do a Housing Health and Safety Rating System (HHSRS) inspection. They might inspect your rental property if your tenants have asked them to, or if a survey has revealed that your property could be hazardous.

Fire safety regulations

Landlords must comply with the Furniture and Furnishings (Fire Safety) Regulations.

You need to make sure all upholstered furniture, as well as loose furniture and upholstery, is fire safe when tenants move in.

Read our fire safety regulations article for further guidance.

Stay on top of tenancies with our landlord checklists

Landlords have a lot of responsibilities, which can be daunting, particularly if you’re renting out a property for the first time.

That’s why we’ve put together three handy checklists to help landlords manage all stages of a tenancy:

How to rent out a property – landlord maintenance responsibilities

Besides keeping your property on the right side of health and safety regulations, you also need to keep your property in good condition.

Repairs you’re likely to be responsible for include:

  • structural repairs
  • repairs to sinks, baths, toilets etc.
  • boiler and heating system repairs
  • fixing things you damage while making repairs
  • other serious damage to the property
  • repairs to common areas, if it’s a flat

Keeping an eye on your finances (and there's more on this below), it’s worth doing your research on how much maintaining your rental property could cost you.

Our guide to redecorating a rental property gives you the key information on how often you’ll need to update your kitchen and replace carpets, as well as whether you should let tenants redecorate.

Energy efficiency in your rental property

You'll also need to make sure you get an Energy Performance Certificate if you're renting out your property.

In England and Wales, you’ll need to meet Minimum Energy Efficiency Standards (MEES). This means it’s illegal to rent out a property with an EPC rating of F or G. The minimum EPC rating for new tenancies is set to be upgraded to C in 2025 (extended to all tenancies by 2028).

The Scottish government intends to introduce similar rules, setting a minimum EPC rating of D by 2025. However, its plans have been delayed by the Covid-19 pandemic.

Our guide to EPCs explains everything you need to know, with some top tips on how to make a property more energy efficient.

Gaining access to your rental property

To make repairs, you may need to access your property while tenants are living in it, but you need to give them at least 24 hours’ notice, unless it’s an emergency that needs dealing with straight away.

Read our guide to landlord access rights to make sure you’re compliant with the law and maintain a good relationship with tenants.

Your tenants may also be able to claim for a rent reduction if the repairs you need to make are very disruptive. This is known as ‘rent abatement’.

If you don’t carry out repairs, your tenants may take you to the small claims court, or they may get the repair work done themselves and deduct the cost from their rent.

They could also ask the council to carry out a Housing Health and Safety Rating System (HHSRS) inspection.

There's a certain level of money management required if you become a landlord, as you'll be legally responsible for things like securing the deposit from your tenants and paying tax to HMRC.

You may also need to make sure rent is paid in good time for you to meet your monthly buy-to-let mortgage payments, if you have one.

Check your tenants' right to rent

Whether you have a tenancy agreement in place or not, if you're renting your house out in England, you'll need to check all those who are living in it (and are over 18) have the right to rent in the UK.

You can sign up for email updates on the right to rent policy on the government website.

Protecting your tenants’ deposit

You’re required by law to put your tenant’s deposit into a government-approved scheme until the end of the tenancy.

Read our landlord’s guide to tenancy deposit schemes for full details of what’s required in England, Scotland, and Wales.

Tax and National Insurance

It’s also worth noting that earning money from renting out your house is treated the same as earning any other income. This means you need to pay tax, minus any related expenses, on your income, including any rent you take in.

You don’t pay tax on the first £1,000 of income you get from renting out property you personally own. If your annual income from property rental is £2,500 or more, you need to declare it on a Self Assessment tax return.

Read our step-by-step guide to Self Assessment for landlords to get started.

If your income from renting out your property is between £1,000 and £2,500 a year, you should contact HMRC.

Meanwhile, you only need to pay Class 2 National Insurance as a landlord if:

  • your profits are £6,475 a year or more
  • being a landlord is your main job
  • you rent out more than one property
  • you buy properties to rent out

Should landlords use a letting agent?

If you let through an agent, they’ll be able to tell you the going rate for similar rental properties in the area. An agent can also manage viewings, inventories, tenancy checks, lease setup, and tenancy checkout for you.

If you want even less hassle, most will also fully manage your rental property for you, taking care of things like repairs and mid-term inspections.

But this service usually comes at a higher cost than if they’re just doing the initial marketing and tenancy agreement. Read our guide to letting agent fees for an idea of how much it could cost you.

If you decide to go without an agent, and it’s your first go at being a landlord, make sure you do your research.

How much rent can landlords charge?

It’s easy to find information on how much rent other landlords are charging with a quick search on one of the major property portals, like Rightmove, OnTheMarket, or Zoopla.

We’ve also got information on the UK’s best buy-to-let areas so you can see how your area compares to others around the country.

Working out your rental yield will give you an indication of your return on investment, alongside whether you have enough money to cover mortgage repayments and property maintenance.

What insurance do landlords need?

Some people renting out a property for the first time mistakenly think that a standard home insurance policy will cover them. It won’t.

While landlord insurance isn’t required by law, it can protect your financial interests and give you peace of mind, just in case something goes wrong during a tenancy.

You can choose from a wide range of covers depending on the level of risk you’re prepared to live with. Besides the standard landlord insurance policy, some also choose to cover themselves for:

Unoccupied property cover is always worth bearing in mind if you think your property is going to be vacant for any length of time.

You might also want to consider landlord legal expenses insurance. With your Simply Business policy, you'll have access to a number of useful services and a legal advice helpline through DAS Businesslaw.

What rights do landlords have to take back possession of their property?

There are some situations in which landlords may be entitled to take back possession of their property before the end of the lease term.

These include but are not limited to:

  • the property being unfit to live in
  • late or non- payment of rent
  • repossession by the landlord’s mortgage lender
  • breaching the terms of the tenancy agreement
  • causing damage
  • anti-social behaviour
  • fabricating credit checks or references

Following restrictions due to the Covid-19 pandemic, the evictions process in England returned to normal in October 2021. Read our article on the current eviction notice periods, the forms you need to use, and how to reduce the need for evictions.

The rules for evicting tenants in England and Wales are the same, but they’re slightly different in Scotland.

What if the property is an HMO?

If you let your property to three or more tenants, who form one household but aren’t in the same family, your property may fall into the House in Multiple Occupation (HMO) category.

You need a licence for an HMO if five or more people live there. You can find out what you need to know about the rules on HMOs in our article.

We’ve also got useful information on the fines you could receive if you don’t have an HMO licence or break your local authority’s landlord licensing rules.

Did you buy your property to let it out or did you unintentionally end up being a landlord? Tell us about your experience below.

Photograph 1: BullRun/stock.adobe.com

Photograph 2: kucherav/stock.adobe.com

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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