How to become a landlord in the UK

Becoming a landlord in the UK can be an exciting prospect – particularly as figures suggest that the rental sector has doubled in the last 20 years, rising from 2.3 million to 5.4 million privately rented households in the UK. 

With the trend predicted to continue, an additional 1.8 million households are expected to become private renters by 2025 and more than half of 20-39 year olds expected to be renting privately by 2025. 

But there is no getting away from the fact that becoming a landlord in the UK is hard work!  


What to consider? 

There is much to consider; from the legal side, to ensuring that tenants are settled and happy, and much more in between. 

Firstly, consider what kind of property you are letting out. If you have inherited an older property, it may be in need of some renovation work or a little TLC before you can put it on the market.  

Or if you have left your existing property to move in with a partner, it may already be rent-ready. A furnished property may attract a higher rental value per month but bear in mind that whatever furniture or appliances you leave in the property could be your responsibility to fix or replace when broken, not to mention the need to comply with the Furniture and Furnishings (Fore Safety) Regulations 1988. 

Work out whether there is any rental demand in your area. According to research, it is estimated that one in five British families now rent rather than own; larger houses in the suburbs are becoming a more appealing option than a studio in the city!  

And in Peterborough, tenant demand has grown by almost a third year on year.  

But while the prospect of becoming a landlord and having an extra revenue stream can be an attractive one, it is worth remembering that maintaining and selling buy-to-let properties can be an expensive business, so it’s important to understand the costs you’ll face. 

As well as the legislative financial commitments, there may be other outgoings that you haven’t planned or budgeted for, so having a contingency fund is advisable. 

You may not be able to plan for times when your property is empty – known as ‘a void period’ but be prepared that this may happen, remembering that while no rent is being generated; bills and other costs (including mortgage repayments) will still apply.  


 How do I get a mortgage on my rental property? 

When you buy a property as an investment, you won’t be able to fund your purchase with a normal residential mortgage.  Instead, you’ll need a specialist buy-to-let mortgage, and there are deals out there for first-time landlords, ‘accidental’ landlords and experienced investors with large portfolios (between four and 10 properties). However, you may need some assistance to navigate the buy-to-let mortgages minefield.  


  • Your monthly repayments are likely to be your biggest regular outgoing.  
  • The larger the deposit you have, the better the deal you should be able to get. The impact of coronavirus on the economy has meant fewer mortgages on the market, so if you have a deposit of less than 20% you’re unlikely to get a loan in the current climate.  
  • If you plan to take out a variable-rate mortgage such as a tracker, you’ll be at the mercy of the Bank of England base rate. If this rises, so too will your mortgage payments.   
  • Landlords with large portfolios might find it more difficult to take on additional finance, as banks now require more comprehensive evidence of profits from investors with more than four properties.  
  • Most borrowers take out an interest-only mortgage for their chosen property. They then only pay the interest on the loan as it accrues every month, generally from the proceeds of the rent they collect. The capital debt – the full amount of the mortgage – is paid at the end of an agreed term. 
  • When comparing mortgage deals, it’s important to assess the overall cost of the loan, as a cheap initial rate can sometimes be outweighed by high fees. Upfront fees on buy-to-let mortgages tend to be significantly higher than those on standard residential deals.  


What else to I need to consider? 

As well as the financial side of becoming a landlord, you also have a legal responsibility and duty of care to your tenants.  

  • Repairs and maintenance: If something goes wrong or breaks in the property, in some cases it’s up to you to pay for the repairs. This could be costs for a plumber to fix a leak, or to replace a broken appliance. Remember to keep all receipts for repairs you’ve paid for, as these could be tax-deductible. It may also be worth having a separate fund to replace worn-out furniture.  
  • First impressions really do count. Read our blog on how to make a great first impression through kerb appeal. 
  • With so many of us spending more and more time at home, it is no surprise that gardens are now being seen as a priority for renters. Paying attention to your outdoor space is now more important than ever, and here are some tips on creating an enticing garden without breaking the bank.  
  • Safety: If your property is being rented out as ‘furnished’, having fire-resistant sofas is crucial. If they don’t have a genuine safety label attached, they will need to be replaced. Boilers and gas fires should also be checked by qualified professionals and electrical upgrades carried out if necessary. Here’s a checklist of what to consider. 
  • Energy performance certificate (EPC):These are a legal requirement if you’re letting or selling a property. They cost between £50- £100 but each one lasts for 10 years, so you don’t need to get a new one every time a tenancy ends. 
  • Insurance:While tenants usually take on the responsibility for most monthly bills like gas and electricity, you’ll still be responsible for sorting out (and paying for) insurance.  
  • Agency fees:Letting an Agency handle your property means you don’t have to be ‘on-call’ for tenants nor will you have to worry about the 170+ pieces of legislation affecting the Private Rental Sector.  It also takes away all of the admin work!  They usually charge around 10 to 15% of the monthly rent, another cost to consider. Here is a quick guide. 

If you are interested in becoming a landlord and want more details, talk to us about how to get started. 

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