Is Letting Your Home a Good Option Right Now?

Posted by Marsh & Parsons on 21st October 2022 -

Letting a property can seem like a complicated process but, with over 160 years’ experience, we have developed our lettings service to make things as easy and straightforward as possible. Still, perhaps you’re not sure whether to sell or let your home. In today’s rapidly changing property market, it can be difficult to know what the right next step is. As with any important decision, it is necessary to consider all the relevant factors. In this blog, we’ve outlined some key points to take into account, including what the current market conditions mean for you as a potential landlord. Read on to find out more.

Why renting out your house could be the answer

The revised Stamp Duty thresholds unveiled on September 23rd 2022 may help create a buzz in the sales market for first-time buyers. Conversely, as mortgage rates rise both existing homeowners looking to move and those buying for the first time may decide to hold off until the market becomes more favourable.

Crucially, lenders’ criteria for mortgages, including buy to let, has not changed. If you’re a vendor looking for an alternative option to selling, becoming a landlord could be the answer if you are able to refinance. Our lettings team has seen evidence of very strong rental performance first hand throughout the year. During September alone, landlords secured rental increases of over 20% on average, with some achieving over 50%¹.

We’re expecting this strong lettings market to continue as demand for quality properties still far outstrips supply. Over the past month, most of the properties on our books were let within 24-48 hours, with some receiving up to 80 viewings during that time³. Our lettings team go above and beyond to achieve the best possible price for our landlords, and our rigorous vetting process means they have access to high quality tenants.

Now is a great time to get into the market as renters look to secure tenancies before the winter period. If you’d like some advice about letting out your home, speak to one of our team today.

Short-term vs long-term lets – which one is right for you?

A short-term let is typically anything up to a six month tenancy, whereas a long-term let is longer than six months. Which one is right for you will largely depend on your personal situation.

If you are moving in with a partner and don’t want to sell just yet, a short-term let may be a good option. Maybe you’re on secondment for a year, or perhaps you are relocating for the long-term but would like to keep your property as an investment, in which case a long-term let would be most suitable.

If you are unsure which type of let is right for you, you can get in touch with our team by clicking here.

Can I rent my house out on a normal mortgage?

This depends on your mortgage lender and your situation.

If you are a homeowner with a typical residential mortgage, you will need your lender’s consent before renting it out. This is usually called a ‘consent to let’, a formal agreement between you and your mortgage lender allowing you to rent out all or part of your property. Renting out your house without your lender’s consent would be a breach of your mortgage terms and is breaking the law.

If you are only planning to rent out your property temporarily your lender may give you consent. However, if you are expecting a permanent or longer-term tenancy, or if you don’t meet the criteria for a consent to let, you will almost certainly need to switch to a buy-to-let mortgage.

If you are on a Help to Buy or shared ownership mortgage, it will be very difficult to obtain a consent to let. Please contact the schemes for more information.

Do I need a licence to rent out my property?

If you are renting out your property, you may need a licence. This is mainly required for houses of multiple occupation (HMO), more commonly known as house shares, but can apply to other types of dwellings depending on where you live.

What is a HMO licence? If you have five or more people living in your property, you will need to apply for a licence. Depending on your local council, you may be required to apply for a licence for other types of HMOs too.

Some councils in London also have ‘selective licensing’. This is to ensure a proper standard is upheld in privately rented homes, whether they are classed as a HMO or not. If you are planning to rent out your property, be sure to check with your local council to see if you need a licence.

Are you ready to be a landlord?

If you’re thinking of renting out a property for the first time, it is important to consider the obligations and responsibilities of being a landlord. From inventories and safety measures to tenancy deposit schemes, there are a lot of rules and regulations that can be daunting and confusing for new landlords. If you live overseas, there will also be tax implications to consider. The upcoming Renters Reform Bill, the Government’s bid for a fairer private rented sector, will further change the regulations landlords need to comply with if it is passed in Parliament. For advice on becoming a first-time landlord, click here or speak to our team.

Looking for a stress-free solution? Marsh & Parsons can fully manage your property during the lifetime of the tenancy, making sure you are fully compliant with all regulations and handling any situations that might arise on your behalf. For more details on our property management services, click here.

Getting your home ready for renting

Whether you’re putting your home up for sale or for rent, it is important to make sure it is well presented. As a landlord, there are extra steps you need to take to ensure your property is renter friendly: 

Interior design

First impressions are everything when it comes to putting your property on the market, and interior design is your greatest weapon to make your home stand out from the rest. Creating a blank, neutral canvas for tenants to put their personal stamp on is usually the best option. Beyond a fresh lick of paint, keep your ideal tenants in mind when upgrading or renovating. For instance, families will have different requirements compared to students or young professionals. Generally, in any given area, the more attractive properties will be in demand from the best tenants and command the highest rents.

Repairs and regulations

Given that most tenants will be looking for a property well in advance, make sure all necessary repairs are carried out before booking a valuation and starting viewings.

To ensure your property is safe and habitable for your future tenants, you will need to obtain fire, gas and electrical safety certificates. This can be organised by our property and tenancy management team if you wish.

Insurance

There are a number of different types of insurance that are recommended as a landlord. These include landlord liability, buildings and content insurance. Though it is not law to have insurance, many buy-to-let mortgage lenders will include this as a stipulation.

So, is letting your home a good option right now?

As you can see, this depends on a large number of factors, but ultimately it depends on your individual needs.

At Marsh & Parsons, we use our expert knowledge of the local property market to advise on the best option for you based on your personal situation.

Click here to book a free, no-obligation appointment with one of our team.

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