Whether you’re applying for your first buy-to-let mortgage or you’ve upsized and kept your apartment to let, as we head into London’s busiest season, it is a great time to become a landlord. Watch the following how-to video for our best recommendations for a successful, stress-free first let.
Foxtons Lettings experts, Gareth Atkins – Managing Director of Lettings and Fran Giltinan – Managing Director of Property Management & Customer Experience, answer the most frequently asked questions by landlords. Whether you’re becoming a landlord for the first time or you just need a refresher, here’s what you need to know.
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Video transcript for accessibility:
Q: Is it a good time to become a London landlord?
GA: I think it's a great time to become a landlord in London at the moment.
I think there's a few factors that come into play. The first thing is the amount of demand that we have for properties in London if you are looking to let something. So if you own a property and you're able to rent that out, you're going to have a huge amount of demand from tenants and that makes your product very desirable. It also means, generally speaking, you get a good return on that investment.
Q: What are the most common mistakes first-time landlords make?
FG: The most common mistakes that a landlord could make are probably assuming that they can manage it themselves and because they have a good quality property or flat that there will be no issues with it, and that's all they need to focus on. They probably also can have a tendency to underestimate their obligations and the expectations of a tenant at the same time.
Q: What should a first-time landlord consider before searching for a tenant?
FG: The first thing a landlord should consider is do they have the time, the knowledge, the expertise to manage it. The second area that they should consider is there are over 150 pieces of compliance that govern our industry, and the health and safety of a tenant and the tenancy is absolutely paramount.
So, are they fully clued up on all the certification that they need? If it's in a licensed area, do they really understand the implications that are involved? Do they have the time and the necessary know how to deal with maintenance issues when they crop up? Will they be able to live up to the expectations of a tenant in terms of speed of response?
Q: What factors should first-time landlords prioritise when setting a rental price?
GA: I'd probably give landlords the same advice that I give to tenants when it comes to setting a price and what price you would offer. A tenant often thinks that the only thing a landlord cares about is the price, and a landlord often thinks that the only factor they should take into account is the price.
Actually, there are four things that constitute a good offer. So one is price.
The next is when someone moves in versus when it's available because a vacancy period is expensive to a landlord. The next is the quality of the tenant, i.e. is the tenant a family? Are they professionals? Are they sharers? Those things open up a different number of applicants to every property.
And the final aspect is how long someone will rent it for and what their conditions are. A tenant who can move in straight away and is able to offer a long-term contract and is able to take it as it comes, is often worth a lot more to you than someone who might be able to offer a little bit more, but moves in a lot later and asks for a lot of conditions.
Q: Where can first-time landlords find information and resources to help them navigate?
FG: Clearly a first time landlord can jump online and start Googling how to let out a property.
There are some easy resources out there, such as the How to Rent guide, which really neatly explains the obligation of both the landlord and the tenant. There are trade bodies, my favourite, NRLA. Clearly there's ARLA and the property mark bodies as well. But in all honesty, a first time landlord shouldn't be relying on Google searches and reading a few documents to really brush up on their skills and their knowledge.
You need a fully qualified estate agent that has poured through many, many files of knowledge and built up expertise over a number of years to professionally manage that property on their behalf, to protect their asset and to also to make sure we look after the health and safety of the tenant and the tenancy throughout its duration.
Q: How does Foxtons cater to tech-savvy first-time landlords in today’s digital age?
GA: For the last 40 years, Foxtons has been a leading estate agent, and during that time we've also been innovators when it's come to technology. We are able to find a tenant and put them in the front of the right property. We've done many, many tenancies in less than two hours, and we provide a platform that means that landlords and tenants can be involved in the whole process from beginning to end digitally if that's the journey that they want to take.
Q: How does a first-time landlord attract a high-quality tenant?
GA: One of the number one questions we get asked is, how do you attract a high quality tenant? And I've probably got three tips. Number one, you need to use a good high street agent like Foxtons. They're going to attract the right people and stereotypically they're going to be able to screen them for you.
Number two, dress your property. Make sure it looks immaculate. If something looks brilliant, people are going to buy into the belief of what it's going to be like when they live there.
And number three, probably one of the most important ones that people forget is you've got to be a good landlord. You've got to make sure that when problems come up, they're dealt with quickly.
Obviously I'm going to recommend that you use an agent to manage it for you, but if you genuinely have that time, knowledge and experience and you want to keep on top of all of that legislation yourself, then you've still got to make sure that you are quick to respond and you get problems dealt with fast.
Q: How can I screen potential tenants to find someone reliable and responsible?
GA: In my view, the only way to effectively screen a good quality tenant in the current market is by using a third-party referencing company. Foxtons uses the biggest referencing company in the UK, and the reason we chose to do that about five or six years ago is because the technology out there now allows tenants of any walk of life to produce some pretty amazing forged references. And we use a third-party company whose own technology is constantly evolving. They share the information between their independent bodies to make sure that people don't slip through the net. And that for me is the reason why I believe we have so few arrears.
Q: What tips do you have regarding communication with tenants?
FG: Communication and maintaining a positive relation with your tenant is probably the most underestimated aspect of being a landlord. There's probably three factors you're going to have to consider versus about your time and your effort. Speed of response is absolutely crucial when it comes to managing a tenant's expectations.
The ability to triage a problem and know how quickly you need to respond. At Foxtons, we use masses of technology to really measure how quickly we respond to a tenant when they come to us with a query. How long does it take us to actually resolve that scenario, that issue? How do we manage to segment issues which we really need to move on today versus the ones that actually we can take a little bit more time to consider?
Clearly your knowledge as a landlord is imperative. If a tenant comes to you with certain queries, they're not always bog standard. If they ask you to leave a tenancy early, you need to really understand your obligations as a landlord. If they ask you, can I have a pet? You need to be prepared to know what you can and cannot say in these circumstances.
So don't underestimate not only the knowledge, but the time that you will need available to make sure you are there to respond to a tenant when they need you.
Q: What are the essential elements to include in a tenancy agreement?
GA: I can only give one piece of advice to landlords when it comes to what you do with a tenancy agreement. And my advice is don't go anywhere near it.
You need to be a property lawyer to properly write and edit a tenancy agreement.
I've worked in property for the last 21 years dealing with tenancy agreements that entire time and legislation constantly changes.
We change our tenancy agreement two or three times a year to react to changed legislation, but also to learn from anything that's come up during that year that might adversely affect a landlord. So from my point of view, my advice is you have to leave that to the experts.
Q: How can I prepare for and handle maintenance in a new tenancy?
FG: When it comes to starting off a tenancy. Prevention is always better than cure. So before you even think about moving a tenant in, you almost have to conduct a bit of a health and safety check on that property. Is it fit for purpose? Obvious easy things like is the sealant around the bath and the shower areas all good? Have you had the boiler service recently? Have you checked the smoke, the carbon monoxide alarms? From a compliance perspective, if you're an HMO, you're in a whole different territory.
Is there a sign in the communal areas detailing who the managing agents are? Is it fire safe? Do you have the electrical certificates? Is it clean? Are the environments tidy? There's a huge checklist that you have to go through before you can move a tenant into a property.
The only way we can keep track of it here at Foxtons is we've designed our own move in and compliance app that tenants and landlords can feel confident that before anybody moves into a property, we've gone through the 20, 30, sometimes 40 aspects that we need to consider and have audited before we'll allow somebody to move into that property.
Q: How do first-time landlords keep on top of legislation and licensing?
FG: There's only one way first-time landlords can keep on top of legislation and licensing, and that is to use a really top-quality estate agent because this field is ever changing and ever moving, and the regulation, as we all know, is always increasing.
When you've applied for a license, it's not as simple as just filling in a form online. When that license comes back, you will need to read it, you will need to interpret it, you will need to make sure that you adhere to all of the information and the conditions that have been set out in that license.
You always have to remember that at any point, the council without warning can knock on that door and check the condition of a property. And if as a landlord you are not prepared and that property is not fit, you're going to be looking at civil sanctions, potentially even criminal. The fines are hefty and it's not a territory you want to go into without being fully armed and fully prepared. And you need to know your stuff.
