Rent is money paid by a tenant to a landlord for possession of a property for a specified amount of time and money.
Domestic lettings in the UK are very common (around 30% of all property) and are usually taken on an Assured Shorthold Tenancy (AST) and provide rights to both landlord and tenant. This would be the most common situation in the UK as it goes to support the Buy to Let industry.
The reason many people take a let is simply because they can't afford to buy. Letting is an upwardly mobile trait and therefore lends itself to the young professionals and to those younger life stages who tend to aim to achieve before settling with a family and getting involved with schools etc.
Rent in Manchester!
Of course, other renters are the people who don't buy for any number of reasons because they have not been able to save or have lost money or just don't earn enough money. Private landlords will wish to try to attract professional and reliable tenants so that they have an uninterrupted cashflow so that they can pay their mortgages. Social landlords such as Housing Associations and council housing tend to cater for those who can't afford private rental income.
Renting provides those with short term needs to live in a community for a while, giving them a proper address without having to pay hotel prices. Renting has typically been the equivalent of paying an interest only mortgage for that property. There are many reasons: student lets, young professionals, temporary workers - all require housing needs and in the cases of work, often times a company will pay for their employees under a company let, where the company guarantees the deposit and any necessary repairs. Letting provides an economic and social function and is socially accepted.
How to rent:
Those wishing to rent either as a landlord or tenant would mostly go to a reputable letting agent. Estate and letting agents are pretty much one and the same as people tend to put the two together although letting agents do have to do quite a lot of work! The letting agent will have a number of jobs to do: inspect the property to ensure that it complies with all legal requirements. Gas and electrical certificates as well as from October 1st 2008, Energy Performance Certificates will be required from the landlord. An inventory needs to be prepared to protect the tenants integrity ( a euphemism to make sure sure that nothing gets misappropriated) but the inventory also records the condition of the property so that a tenants deposit can be used in cases of damage but not fair wear and tear. The landlord will also have to produce evidence of identity to guard against the money laundering regulations.
The letting agent must also check the tenant's references. These will include an employers check as well as a credit check. Prospective tenants must also earn enough to cover the rent by 2 and a half times their salary. Needless to say, the letting agents will decline any applicant with poor credit references, CCJ's and no job.
Negotiating the amount:
Well it's obvious: the tenant wants to pay the least and the landlord wants to get the most amount of money. The role of the letting agent here is to act as a go between.
It should be borne in mind that a £25 reduction in monthly income, whilst perhaps a slap in the face for the landlord is only £300 over the year. So a property with a mortgage of £150,000 and monthly payments of around say £660, here a £25 drop is 3.8%. Its the other 96.2% that is of interest. Further, holding out for your desired letting income level may cost you a month's money anyway - ouch. So do the deal asap.
The tenant should exploit the landlord's weaknesses: there may be a block of apartments with 10 empty. Well it's a case of play one off against another. Try not to show your hand if you're desperate and remember that having made a low offer, if the landlord comes back with a ' can you improve on this a little bit more?' give a very small amount only - it means that they are thinking about it. Landlords: if an offer is tempting but not quite what you want, just say no. It's amazing how often you get what you want!
The tenants will generally have to pay a registration fee which covers the cost of checking their references. Further, they will have to sign the tenancy agreement, which is generally signed by the letting agent on behalf of the landlord. The landlord will sign a management agreement that confers rights and duties to the letting agent. The tenancy agreement will state how much the tenats have to pay per month, what date the payment is to be received, and the length of the term - generally either 6 or 12 months. The tenants will have to pay generally, a months deposit and a months letting income in advance. They will also be asked to sign a standing order or direct debit for the rent to be paid to them (if the property is managed by the letting agent) or direct to the landlord otherwise. The landlord obviously has to pay the mortgage! Once this has been done the letting agent will pass the keys to the tenant and they can take possession thereafter.
When is the best time to let?
The best time to let is in the summer. This is the most active time and is also traditionally the time when new terms start and therefore jobs tends to have a new lease of life at that time too. Whilst this is a generalisation, it really is the most buoyant time of the year. From a landlord's point of view, there certain times to avoid: the run up to Christmas - no one's moving really and peak holiday times Easter and peak school holiday August. Landlords should try to avoid leaving themselves exposed before Christmas to any void periods as these will be exploited by the tenants.
A brief note about insurance: The tenant needs to ensure that they are adequately insured in case of any loss of their personal possessions. It is not the landlord's responsibility to insure the tenants possessions. The landlord may have insured his own contents if the property is fully furnished, additionally the buildings insurance will cover any unforseen eventualities with regard to water escapes, fire and storms.
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