Print

Owners become renters once more

Catherine Deshayes

Those moving home are increasingly looking to rent their new home and let out their old dwelling, rather than selling and buying again.

An increasing number of people are switching from owner to tenant status, choosing to rent rather than move up the property ladder.

Reasons behind this growing trend include people being unable to sell or because they don't want to sell in the current property market.

Simon Preston, Chairman of postal address changing service iammoving.com, said, "People are shifting from owner occupying to renting and people who would otherwise have been selling their home are renting it out and then moving to other rented accommodation.

"This is happening all over the country, not just in the major cities," Mr Preston added.  

A survey by mortgage removals firm Moveme.com has shown that those who are changing address regarded commuter towns in the south as their favoured places to live, while the top ten least favoured were in London.

Tips for renting

If you are one of the landlords taking advantage of the increasing number of people who are looking to rent a property, follow these tips for a successful rental.

Speak to your lender - your mortgage lender needs to know you are renting out your home. Some lenders will allow this but the majority won't. Speak to a buy-to-let mortgage broker such as The Money Centre who can help you change your mortgage over to a buy-to-let mortgage to be on the safe side

Insurance - you need specialist landlords insurance on your property when renting your property out to tenants, at least buildings if not contents as well should you have it rented out furnished.

Tenancy deposit scheme - this is now a legal requirement. For all tenancy agreements that started on or after the 6th April 2007, landlords are required to protect their tenants' deposit using one of the Government Authorised schemes.

Within 14 days of receiving the deposit, the landlord is required to inform the tenant of how it is protected. There are three schemes to choose from. For more information visit www.direct.gov.uk/en/TenancyDeposit.

Gas certificate - this is a legal requirement. You will need a new Corgi certificate each year and a copy must be left with your tenants for their records. Contact a certified Corgi registered gas engineer - found in the Yellow Pages.

Energy Performance Certificate - effective from the 1st October 2008, landlords will have to make an energy efficiency performance certificate available to prospective tenants as part of the lettings process.

The certificate, which will be valid for 10 years, rates the energy efficiency of a property on a scale of A-G, and makes recommendations for improvement. The most energy efficient homes are in a band A.

Landlords will not be under any obligation to follow any recommendation in the EPC or carry out work in improve the energy efficiency of their property.

However, it is worth considering that tenants may use the certificate to help them choose which property to rent, making higher rated properties more desirable.

The EPC is required by law when a building is constructed, sold or put up for rent. EPC's can only be produced as a result of a survey by an accredited Domestic Energy Assessor.

They are used to collect standard information on the property including its size, how it is constructed and its hot water and heating systems. There are a wide range of companies qualified to produce EPC's.

Tax return - as a landlord you are now running a business, you will need to complete a tax return. Any good accountant should be able to advise you and help you with the paperwork involved.

Inland Revenue can come after you years after you may have stopped renting the property or even sold it.

Join a Landlord Association - these organisations are a life line to any landlord.

If you have any tenant problems or questions then landlords Associations are a great helping hand. You can find your local one using the internet.

At present, rental demand is still high, up 41% in a year nationwide, according to the lettings agent Your Move, which measures the number of leases commencing each month.

Gumtree, the classifieds website that includes rental properties, reports that 71% of the tenants it surveyed do not intend to take out a mortgage and will continue to rent.

It also found that 60% of mortgage holders would sell their homes and begin renting if mortgage repayments became too high.