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The comprehensive guide on becoming an accidental landlord

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Posted on: June 2nd, 2017 by Vivo_Team

As experienced fast property buyers, we have met a wide variety of homeowners looking to sell their home fast for a number of reasons, including those who have become ‘accidental landlords’. While the term itself may seem strange, it is a growing trend amongst homeowners in the UK. Here, we look at what is meant by the term ‘accidental landlord’ and help answer many of the common questions people who find themselves in this situation have.

Front lounge of a house from an accidental landlord

What is an accidental landlord?

Unlike professional landlords, who make a living from specifically renting out houses, the definition of an accidental landlord is someone who rents out their property due to circumstance rather than choice. This process normally starts when a homeowner is unable to sell a property (one they currently live in or have inherited) in a timely manner. Rather than leave it empty, it can make sense to rent it out to ensure that they are able to make the mortgage repayments. Before they know it, they have become a landlord without ever intending to do so. Being an accidental landlord can be problematic, too, especially if the property in question is far away from where the owner currently resides (perhaps they have relocated for work or inherited a property from a distant relative). Moreover, being a landlord requires a lot of commitment, which some homeowners do not have space for in their lives.

So, if you have found yourself becoming an accidental landlord and you’re not sure what to do, or if you have decided to rent your property because you’ve been unable to sell, there are a few things that you need to consider to make sure you keep yourself and your property protected.

The legalities of becoming a landlord

Your mortgage

The first step to take before advertising your home to potential renters is to ensure that your mortgage type allows you to sublet your property, so get in touch with your mortgage provider. If, like many accidental landlords, you are struggling to sell your home but believe that the housing market might improve in the coming months, then it’s worth checking if your mortgage provider can grant you ‘consent to let’. This allows you to rent your property out for a 12-month period without having to change your mortgage – perfect for those looking for a short term solution.

In the situation that your lender does not provide you with consent to let, a more permanent solution would be to switch your current mortgage over to a consumer buy-to-let mortgage. It’s important that you do this before renting the property out as doing so without the mortgage provider’s consent can result in a breach of contract. This could lead to providers asking for full repayment of the loan, thus increasing the risk of you defaulting on the mortgage. Another thing to be mindful of when changing to a new mortgage is that it may result in higher interest rates and an administration fee. Moving forwards, once you have sorted your mortgage it’s time to look at changing your insurance, making sure you and your property are protected.

Landlord insurance

As you have now gone from being a resident to a landlord of the property, the residential insurance that you have in place also has to change. The first step is to contact your insurance provider and discuss changing your current policy to landlord insurance. This type of insurance gives you more protection, covering you against tenants not paying rent, damage to the property and liability for accidents. Now that you have the correct insurance in place it’s important to know the legal obligations you have to comply with as a landlord.

Rules and regulations

As the process of renting your house involves a third party (your tenants), there are regulations that need to be followed to make sure both sides are protected. A good starting point would be to check if the tenant is legally allowed to rent in the UK in accordance with the Right to Rent immigration act of 2014, as not adhering to this could result in a large fine or even a prison sentence. Once a person has cleared the check, you then need to ensure that their deposit is put into a government-backed tenancy deposit scheme such as the Deposit Protection Service or Tenancy Deposit Scheme within 30 days of receiving it and provide evidence of this to your tenants.

Additionally, ensure that your property is safe to live in and that important safety checks such as gas safety have been carried out before the tenant moves in. You must then provide tenants with a copy of all appliance inspection records for reference, should any break or be damaged during their tenancy. Furthermore, depending on the county your house is located in, you may need to have a Landlord Licence before you are able to rent your property; this legislation was introduced in 2006 with the main purpose of ensuring that landlords keep their rental property up to standard. At the moment there is no central body that controls all property licensing schemes, so the best thing is to contact your local council to see if this applies to you. A good example of a county that currently requires you to have a landlord licence is the London Borough of Barking & Dagenham.

Income tax

Now that you plan to have tenants living in your property and will be receiving monthly rent payments, this is counted as an income by the tax office; income which you are now liable to pay tax on. Previously landlords were only required to pay tax on the amount of profit that they made from monthly rental payments. However, since the new changes to tax relief for residential landlords were introduced in April 2017, landlords are now required to pay tax on the total amount of their rental income, which is matched against their tax band and can only claim 20% back as tax relief.

Attracting the right tenant

The two main ways people choose to list their house for rent on the open market are unfurnished, which would perhaps suit a long-term, independent tenant, or furnished, which would likely attract someone looking for a home that is ready to live in. Before you list your property on the market, it’s a good idea to make sure everything is in good working order and any repair jobs you had planned are completed. By having your property in immaculate condition, you are able to maximise the amount you will be able to charge in rent.

Now that your house is ready, it’s time to find a suitable tenant to let your property to. Going through the process of finding a tenant and advertising your property can be a challenging process for the less experienced. As time isn’t a luxury available to everyone, many looking to save time choose to instruct a letting agency to do a lot of groundwork for them.

Finding the right letting agent for you

There are many letting agencies on the open market for you to choose from, but finding one that suits your needs can be tricky. It’s usually best to call a few to get a rough idea of the services they offer and the prices they charge. Make sure you consider how well established the agent is in your area and whether they have the necessary networks to market your property efficiently. Once you have all the relevant information, you can make a decision based on how involved you want to be as a landlord. A lot of agencies offer a wide range of services, from finding a tenant to running all the relevant background and reference checks, as well as managing the property all year around. This allows you to take a more hands-off approach if you wish.

Another thing you must consider when advertising your property is how much you will be charging for it, so find out what similar properties in the area are renting for to help you set a reasonable asking price for your own property. Even though it might be tempting to list the property at a higher price, there is a risk that it might sit on the market for a long time, eventually forcing you to lower the price.

Once that’s settled, it’s time to show the world how amazing your property is. The rental market is competitive with tenants trying to get the best value for their money, so you want to ensure any online listing of your property emphasises its best features. As the saying goes: ‘a picture is worth a thousand words’, so make sure to use high-quality photos of your property to add to your listing. Here are our top tips for taking property listing photographs:

However, if you feel that becoming a landlord is a responsibility that you do not have time for or is simply something you are not interested in pursuing, the possibility of selling your house quickly is still an option for you.

How can Vivo help you?

By now, you probably have a good idea of how complex the process of being a landlord can be. Making sure you’re fully compliant with all the relevant rules and regulations whilst managing tenants at the same time can add unnecessary stress to your life, especially if you will be living far away from the property or have simply become a landlord by chance. In these situations, opting for a quick house sale may be more beneficial for you.

If you live in and around Greater London, the home counties or the south east of England and have your heart set on selling your house but don’t want the hassle associated with doing so on the open market, Vivo may be able to help. As we buy property using our own cash, we are able to make an offer on your house quickly and, if you accept our formal offer, your house sale is guaranteed. What’s more, we also pay for all the legal fees connected to the selling a home, giving you peace of mind that the offer we make you is the full price you will receive, with no surprise costs later down the line.

Most accidental landlords have found themselves in this situation because they have struggled to sell on the open market, and many find fast property buyers as a useful alternative in their situation. This is especially true as an open market sale can be daunting as the sale isn’t guaranteed up until exchange. There is normally a large property chain involved, so all the communications have to go through several stakeholders, which can slow things down. However, when selling your home to Vivo, we will be in direct communication, avoiding many hold-ups and delays. This is because we’re a small company, available 24/7 and we’re happy to guide you every step of the way. Just fill in the quick, no-obligation form below and we will get back to you as soon as possible, or just call us on 0800 773 4922 and we would be more than happy to give you impartial advice. Even if we aren’t the right choice for you, we will make sure to let you know what the next best step is.


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