ARLA guide for reluctant landlords

ARLA guide for reluctant landlords

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ARLA guide for reluctant landlords

Letting agents reporting a rising number of homeowners renting out their properties because they cannot sell has more than doubled in a year, says the Association of Residential Letting Agents (ARLA).

The latest figures show almost half of letting agents (47%) were letting properties that the owners were unable to sell – up from 18% a year earlier.

ARLA blames difficulties in arranging mortgages for buyers as the main reason for the increasing number of reluctant landlords.

Operations manager Ian Potter said: “The rise suggests homeowners are struggling to sell their homes due to the sluggish market are increasingly looking to the private rented sector to utilise their property in the short term.

“Renting a home short-term is a good option for anyone who has found a buyer for their home, but not found the right property to buy themselves. Equally, for anyone ‘testing’ a new area before committing to move there, or working away from home for short periods, renting can offer more stability and home comforts than a hotel.”

Short-term lets can range from a week to several months, and are common in cities holding major sports and cultural events, like the London Olympics and the Edinburgh Festival.

ARLA has also issued advice for landlords contemplating short term lets:

  • Price for bills – Price the letting cost to cover utility bills for a short term let
  • Ready to rent – Clean the home throughout and make sure small details are covered, like replacing light bulbs and clearing away rubbish.
  • Notify lenders – Tell mortgage lenders and insurers about the let as you may need permission from your bank or building society and must upgrade home insurance policies.
  • Meet tenant expectations – With short-term lets, tenants expect extra services, like linen and cleaning. Don’t forget to price these in to the rent as well.
  • Clear payments – Take cash or make sure electronic payments clear in your bank before letting the tenant move in. Set up a separate rent account away from any other cash to prevent ID theft or hacking.
  • Meet and greet – Meet the tenants or arrange for a letting agent to deal with the handover so you can see who you are dealing with. Make sure you have verified a home address – most short term tenants will have their driving licence or passport with them.

Comments

Paul Barrett

6 years ago

All excellent advice apart from notifying lenders.
Nobody with an ounce of common sense will do this.
Unless of course they don't mind coming off their existing mortgage product and being put on a higher interest rate with the mortgage being more onerous.
Oh yes and you might be required to pay about £10000 off of the previous mortgage.
I appreciate sites like this have to give advice as per the law.
But it is actually ridiculous advice.
Not many accidental LL will notify lenders, if they do they will be stitching themselves up.
It is outrageuous that lenders change the terms of a existing mortgage just because the occupancy status of the property changes.
It restricts the ability of people to move round the country where employment opportunities maybe whilst still retaining their PPR.
All that should happen is the borrower notifies the lender of a change in the occupancy status, the lender notes it and that is it.
It would be reasonable however for the Lender to see the revised household insurance policy converted to a LL policy

 CP12
EPC
Proper inventory
Ideally an RGI policy
Electoral roll form with tenants on it.
AST
Ideally a LL contents policy to cover malicious damage and theft by tenant.
Until this occurs  'accidental landlords' WILL NOT notify lenders; they are not idiots.

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