Landlord licensing for letting property

Selective Licensing

Check whether you need a license from your local council before renting out your property. If your local authority has introduced landlord licensing then it will be illegal to operate without one.

The Housing Act 2004 introduced Selective Licensing to help ensure landlords maintain their rental properties to a good standard, particularly in areas which are experiencing low housing demand and/or suffering from anti-social behaviour. Find out more about landlord licensing and our campaign against it here.

Rent Smart Wales

It became a legal requirement in November 2016 for all landlords with property in Wales to register the property with Rent Smart Wales. The rules also require landlords themselves become licensed to carry out letting or property management activities, or arrange for a licensed agent to undertake these activities on their behalf. Find out more...

How much can I rent my house for?

Get to know your market and find out how much similar properties in your area are being let for so you can set your rent accordingly. Think about your target demographic and consider who your property would be suitable for: young families, students, single professionals, etc. 

Decide whether to let the property as furnished or unfurnished. A property that offers a blank canvas is more appealing to most prospective tenants but students are unlikely to have accumulated enough belongings to furnish a house.

Legal responsibilities for landlords

The role of a landlord is not an easy one, to put it into perspective, there are currently around 145 pieces of legislation you need to adhere to when letting a property. By law, you must ensure your property is fit for purpose and the safety of your tenants is paramount. Take a look at our detailed guides to help you get to grips with your responsibilities.

Electrician working on fuse box
Electrical safety standards

The electrical safety standards came into force on 1 June 2020. They set out new rules to ensure all fixed electrical installations are safe and maintained correctly.

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Safety responsibilities for landlords

To help you get to grips with what’s expected, we have outlined the main safety concerns you need to be aware of and the legal obligations you must adhere to.

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Gas safety checks for landlords

Research has shown that more than one in three private landlords did not know it was their responsibility to get gas appliances checked.

Right to Rent checks

In England, landlords are expected to carry out Right to Rent checks in line with the Immigration Act. You must check whether your tenants have the right to lawfully live in the UK—failure to do so can lead to a fine or jail term.

Tenancy agreements and deposit protection

In Scotland it's a legal requirement to provide a written tenancy agreement, otherwise it’s considered best practice in the rest of the UK.

The agreement outlines everyone's responsibilities but remember, just because something's in the agreement and signed, doesn't mean it's enforceable. In England, when issuing the tenancy agreement, tenants must also be provided with a copy of How to rent: the checklist for renting in England.

If you take a deposit from your tenant, you must protect it in a Government-approved tenancy deposit protection scheme.

Deposits must protected within 30 days of receipt. In England tenancy deposits are capped at five weeks’ rent where the annual rent is less than £50,000, and six weeks’ rent where the annual rent is £50,000 or more. There is no formal cap on tenancy deposits in Wales. 

Deposits must protected within 30 working days of the tenancy start date and cannot exceed two months' rent.

Once protected, the 'Prescribed Information' generated must be served to the tenant; it outlines the scheme used and whether it's insurance based or custodial. Failure to protect a deposit will lead to problems over eviction, the full return of the deposit and a fine of up to three times the value of the deposit.

Landlord insurance

Your current buildings and contents insurer must be made aware of your intention to let the property, otherwise you risk invalidating your policy. There are specialist policies available to landlords to protect you against potential losses. Shop around different insurance providers to find a deal that's right for you. Whilst insurance can seem expensive, the savings and compensation offered in the long run is invaluable.

The protection most policies offer includes:

  • Buildings insurance: for potential damage to the property’s structure or built-in features
  • Loss of rent insurance: when you’re unable to rent out your property through no fault of your own (such as a flood or fire), this covers the potential rent lost
  • Tenant default/rent guarantee insurance: covers any rent lost due to the tenant not paying
  • Contents insurance: covers any contents that you have provided (tenants must get a separate policy for their belongings)
  • Liability insurance: covers any legal costs if you are taken to court, e.g. if the property causes injury to a tenant or visitor

Are legal fees covered in your insurance policy?
Be aware that in extreme cases you might need to take a tenant to court (or they may take you to court) which will incur further costs. Some insurance policies will cover potential legal costs as a result of being a landlord. However, by ensuring your responsibilities are upheld and you have followed the law correctly, you should avoid court altogether. 

Avoid disputes with a detailed inventory

A properly prepared inventory sets the scene for what you provide at the start of the tenancy. It plays a significant role in protecting both you and your tenant. A comprehensive inventory will help avoid disputes, whilst any such dispute that does arise at the end of the tenancy can be more easily resolved.

Chris Hamer
Chris Hamer Former Executive Chairman | Propertymark

Regular inspections will also help but remember you cannot legally enter the property without the tenant’s permission. It’s best practice to grant them 48 hours’ written notice (this should be stipulated in your tenancy agreement). 

Make copies of any keys a tenant may need for windows. doors, gas supply and electricity meters. It’s also worth digging out instruction manuals for the boiler, cooker, white goods, thermostat or house alarm so tenants know how to use them properly.

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What does a letting agent do?

Handing the reigns to a letting agent is an important decision, but what exactly does a letting agent do and how can you find one that's right for you? 

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