If you purchase a property in the UK but do not intend to live in it yourself, you will generally let it out. This guide outlines the basic information and key considerations you should be aware of when acting as a landlord in the UK.
Commonly used rental terms in the UK
In the UK, an estate agency acts as the landlord’s agent. As a landlord, you will therefore enter into an agency agreement (Terms & Conditions of Business) with the appointed agent. Generally, only the contracted agent has the authority to market the property and source tenants.
Estate agency services are broadly divided into two categories: Letting and Management. Each service has its own fee structure, usually based on a success fee model, meaning no fees are payable until a tenancy agreement has been successfully signed.
Since the terms and conditions vary from one agency to another, it is essential to review the contract carefully. At Benham & Reeves, we ensure that any questions from landlords are fully explained, so please feel free to contact us if you have any queries.
In practice, landlords usually choose between “Letting only” or “Letting + Management”. While a letting-only service comes with lower fees, the landlord must then handle all property management responsibilities personally. It is important to note that UK rental regulations are frequently updated, and failure to comply can result in penalties or fines. Landlords who self-manage their properties must therefore keep up to date with relevant legal requirements and obligations.
As a non-resident landlord, renting your London property requires complying with several local laws and lettings rules. From providing proof of ownership and completing anti-money laundering (AML) checks to ensuring proper EPC and safety checks, there are many things to look into.
Some London councils also have Selective Licensing rules, and hiring a professional lettings agency can help you with all the necessary compliance to rent your property successfully.
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In London, rental properties are generally marketed as either “Furnished”, where the landlord provides basic furniture, or “Unfurnished”, where no furniture is supplied.
As a rule, appliances such as fridges and washing machines that are already installed when the property is purchased will be provided to tenants and included in the tenancy agreement, regardless of whether the property is let as furnished or unfurnished.
Any furniture or appliances supplied by the landlord fall under the landlord’s management responsibility. This means the landlord is obliged to repair, maintain, or replace items that fail due to fair wear and tear. However, where damage or breakage is caused by tenant negligence, the tenant is responsible for reinstating the item. Importantly, landlords cannot charge tenants the full cost of replacing an old item with a brand-new one. Instead, deductions must be calculated on the basis of the item’s lifespan (useful life), with the tenant only liable for the loss of value corresponding to the remaining lifespan at the time of damage.
In London, the majority of rental properties are offered furnished, and providing basic furniture generally makes a property easier to let. However, for larger houses, it may be more practical to let the property unfurnished, depending on circumstances.
At Benham & Reeves, we work in partnership with Instyle Direct, a specialist furnishing company, to provide landlords and new property owners with comprehensive furniture packages. We often see properties that remain vacant when listed as unfurnished, but let quickly once professionally furnished. Choosing the right furnishing option can therefore play a crucial role in ensuring a smooth letting process.
Once a property is placed on the rental market, viewings will begin. Prospective tenants may then submit an offer, which marks the start of negotiations. An “offer” is essentially a set of proposed tenancy terms put forward by the prospective tenant. These typically include: rent, contract type, tenant and occupant names, their professions, proposed start date, length of tenancy, break clause conditions, deposit amount, and any additional requests.
There are many points that may be subject to negotiation at the offer stage. In some cases, the terms proposed may not lead to agreement. For this reason, it is important to review each offer carefully with the agent and take a flexible, case-by-case approach to ensure a successful letting.
Once the terms of an offer have been successfully negotiated and agreed, the formal tenancy procedures begin. The typical process involves the following steps:
1. Reference check: Before drafting the tenancy agreement, the tenant’s references are checked. This is usually carried out by a professional reference agency, which verifies income, employment, previous rental history, and whether there are any County Court Judgments (CCJs) for unpaid debts. In the case of corporate assignees or international students relocating from overseas, alternative procedures may apply. In all cases, it is essential for the landlord to be satisfied that the tenant has sufficient financial standing and reliability.
2. Tenancy agreement: Once references are approved, a draft tenancy agreement is prepared and reviewed. The agreement sets out the tenancy terms, tenant’s obligations, landlord’s obligations, legal compliance requirements, end-of-tenancy and possession provisions, and handling of the deposit. The format and content of the tenancy agreement may vary by agent, but landlords should ensure that their rights are adequately protected and that tenants’ contractual and statutory obligations are clearly covered. Benham & Reeves provides landlords with a comprehensive tenancy agreement.
3. Signing the tenancy agreement: After both parties have reviewed and approved the draft, the agreement is signed. While wet-ink signatures on printed contracts are still possible, most agreements today are executed using secure online signing platforms. At Benham & Reeves, we use an e-signature system that is legally binding and fully compliant.
4. Payment of rent and deposit: Once the agreement is signed, the tenant must make the initial rent and deposit payment. Rent is paid in line with the agreed terms—typically one month in advance, though in some cases several months or even up to a year in advance. Funds must be cleared and confirmed by the agent before the tenant can move in.
5. Preparing the property: Prior to the tenancy start date, the property should be cleaned and any agreed requests (such as additional furniture, removal, or replacement) carried out. Where possible, any outstanding repairs should be completed in advance.
6. Inventory check: On or before the tenancy start date, an independent inventory clerk conducts a detailed check-in inspection of the property, including furniture and fittings. An inventory report is prepared, usually supported by extensive photographs. The tenant has seven days to review and confirm the accuracy of the report. Utility meter readings (electricity, water, gas, heating, etc.) are also taken at this time. In the UK, utilities are not disconnected during void periods, so landlords remain responsible for charges up to the tenancy start date, after which the tenant becomes liable.
7. Key handover and move-in: After the inventory check has been completed, the keys are handed over to the tenant and the tenancy officially begins.
During the tenancy period, landlords have a number of obligations. Most are set out in the tenancy agreement, although some are statutory and may not be explicitly stated in the contract. Where anything is unclear, landlords should consult their agent. The key obligations are outlined below, though this list is not exhaustive and landlords should check requirements on a case-by-case basis.
1. Repairs and maintenance: Landlords have a legal duty to maintain the property’s structure and exterior (e.g. roof, walls), as well as essential installations such as water and sanitation systems, electricity, gas and heating. In addition, landlords are contractually responsible for repairing or replacing appliances, furniture, and other fixtures provided with the property and listed in the inventory.
2. Quiet enjoyment: Tenants have the right to occupy the property without unlawful interference from the landlord or third parties. For example, landlords (or their associates) may not enter or visit the property excessively during the tenancy, as this would constitute a breach of the tenant’s right to quiet enjoyment.
3. Insurance (Building Insurance / Contents Insurance): Landlords must ensure that the property has appropriate building insurance. In the case of flats, this is usually included in the service charge, while freehold houses typically require separate cover. Building insurance does not extend to internal fixtures, furniture, or contents provided under the tenancy; separate contents insurance may therefore be necessary.
4. Required consents: There may be restrictions or approvals required before letting a property. For example, in apartment buildings, the freeholder or building management company may require the landlord to obtain a licence to sublet. In some areas, the local council may impose licensing requirements. If the property is mortgaged, the lender’s consent to let will also be required. Where a mortgage was originally taken for owner-occupation, interest rates are often lower than for buy-to-let mortgages, so landlords should check whether rates or terms will change once the property is let.
5. Tax obligations: Rental income is subject to UK tax, even for non-resident landlords. Where tax is not deducted at source under the Non-Resident Landlord (NRL) scheme, landlords must file a self-assessment tax return at the end of the financial year. Please refer to the tax section of this guide for further details.
At the end of the tenancy, an inventory check-out is conducted by an independent inventory clerk, just as an inventory check-in was carried out at the start. The check-out compares the condition of the property at move-in and move-out. If tenant negligence has caused damage, the cost of repairs will be deducted from the deposit, with the balance returned to the tenant. Tenants are required to return the property in the same condition as at the start of the tenancy, allowing for fair wear and tear.
However, any deductions from the deposit must be agreed by the tenant. Landlords cannot make unilateral deductions without the tenant’s consent. Under an Assured Shorthold Tenancy (AST), deposits are protected by a government-approved scheme, and landlords who deduct without agreement risk penalties.
Deductions cannot be made for fair wear and tear (the natural deterioration of the property and its fixtures and fittings).
Landlords may only claim for:
If there are unpaid charges such as rent arrears or outstanding utility bills, these may also be deducted from the deposit.
All deductions must be supported by evidence. Typically, this will include the inventory check-out report together with repair estimates, contractor invoices, or receipts for replacement items.
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