Letting Residential Property in the UK

Background:

Almost five million households rent their own homes in this country, of which 2.2 million rent from private sector landlords. With steeply rising house prices in the UK, an increasing number of people are choosing to rent their own homes, and putting off a move into owner-occupation until later years. Government now believe that the private rented sector (PRS) is key to easing Britain’s current housing crisis, and in helping to develop new housing in both rural and urban areas.

Assured and Assured Shorthold Tenancies:

The private rented sector was in steep decline from the post-war period until the late 1980’s. The Housing Act 1988 brought an end to this period of decline with the introduction of a fair framework of Assured and Assured Shorthold Tenancies. These types of tenancies now dominate the private rented sector (and parts of the public sector) and provide a fair framework of tenancies which gives tenants adequate protection against eviction and unfair rent increases without setting the balance of rights too steeply against the private landlord (as occurred in the previous Rent Acts). The system of assured shorthold tenancies which applies, by default, to most private sector lettings is described in our Letting Factsheet No. 19. Various minor changes were subsequently introduced by the Housing Act 1996 such as withdrawing the requirement for serving a section 20 notice on the tenant before granting an assured shorthold tenancy (see Letting Factsheet No. 22).

Statutory Forms:

There are certain statutory forms that are required to be used when dealing with assured and assured shorthold tenancies – these forms are described in our Letting Factsheet No. 29.

Housing Standards and Safety Regulations:

There are various regulations and standards which landlords must adhere to before a property can be let.

These are:

  • Safety Regulations
  • The HHSRS Safety Rating system for rental property
  • Building Regulations
  • HMOs

Safety Regulations

There are three specific safety regulations that apply to residential property. These are:

  • Gas Safety
  • Electrical Safety
  • General Product Safety

HHSRS Safety Rating System

Provisions in the Housing Act 2004 replace the old system of fitness standards with a new risk-assessment based system which applies to both ordinary residential dwellings and Houses in Multiple Occupation (HMO). The Housing Health and Safety Rating System (HHSRS) is designed to assess different categories of hazard, and provide a rating for each hazard. The five main categories of hazard are:

  • Dampness (e.g. excess cold/heat)
  • Pollutants (e.g. asbestos)
  • Environmental (space, security, light, noise)
  • Accidents
  • Structural (e.g. collapse)

The HHSRS is explained in greater detail in Factsheet No. 28.

Building Regulations

Build Regulations help to provide a safe environment for occupiers of both residential and commercial buildings. They also increasingly dictate what works and alterations a landlord can carry out on a property both prior to, and during a tenancy. There are now buildings regulations that apply to:

  • installation of new boilers and related plumbing works
  • alterations and improvements to the electrical wiring
  • installation of new windows and glazing

Houses in Multiple Occupation

Housing which is occupied by a group of individuals either living together as a group (e.g. a student house) or independently (e.g. bedsits) come under the general classification of ‘House in Multiple Occupation’ or ‘HMO’. It has been recognised that HMOs do, in some cases, present additional safety risks to the occupants for a number of reasons:

  • Bedsits often contain their own cooking facilities
  • HMOs are typically let to younger people, with higher incidents of fires starting as a result of smoking materials, candles, portable gas fires and other similar causes.
  • Occupants in one part of the building are often unaware and unprotected from fires in another.
  • HMOs are often situated in older and larger properties which historically have lower safety standards.

As a result of these risks, Government have implemented a number of regulations that govern the occupation and management of HMOs. In addition, the Housing Act 2004 introduced a new definition for a ‘HMO’ and a national scheme for the mandatory licensing of HMOs whereby all HMO owners are required to register with their local authority. For more information on HMOs, see our Letting Factsheets Nos. 40 & 41.

The Gas Safety Regulations require that landlords must ensure that all gas appliances in a rental property are serviced on an annual basis, and that a gas safety certificate is issued to the tenant at the beginning of the tenancy and annually thereafter. For more information, see Letting Factsheet No. 7.

The Electrical Safety Regulations (for more information, see Letting Factsheet Nos. 4and 5) require that electrical installations all electrical equipment supplied in a rented property should be safe. All portable appliances and associated leads should be visually checked before each tenancy. Portable appliances should be tested periodically and it is recommended that they are checked annually. Electrical installations must be checked every five years.

General Product Safety Regulations require that a property, and any appliances therein, is safe before letting, and that relevant safety instructions are provided to the tenant. More information in Letting Factsheet No. 9.

Tenancy Agreements:

A written tenancy agreement should be prepared before every letting. The agreement describes the key aspects of the letting (name and address of the landlord and tenant, the rent etc.) and sets out the main obligations of each party.

Although the default tenancy for private sector residential lettings is the assured shorthold tenancy, there are several different other types of tenancy that can arise:

  • Resident landlord tenancy
  • Company tenancy (where the tenant is a company or organisation)
  • Common law tenancy (tenancies excluded from Housing Act cover)
  • Mixed Use tenancies (where the tenancy is for both residential and business use (Factsheet No.33)

The different types of tenancy are described in our Letting Factsheet Nos. 18 & 19.

Modern tenancy agreements are required to abide by consumer protection legislation such as unfair contract terms regulations under the Consumer Rights Act 2015 – for more information, see Letting Factsheet No. 10.

Rent and Housing Benefit:

The rent will normally be agreed at the beginning of the tenancy, and defined in the tenancy agreement. Although a landlord is allowed to increase the rent, either using a rent increase clause defined in the tenancy agreement, or by mutual agreement, there is a rent increase procedure that applies otherwise, for assured and assured shorthold tenancies. For more information on the procedure for increasing rent under the Housing Act 1988, see our Letting Factsheet No. 13.

Housing Benefit

Some tenants receive assistance towards their rent through Housing Benefit. For more information on how the Housing Benefit System operates, and any recent changes to the housing benefit system, see our Letting Factsheet No. 15.

Repairs:

Generally speaking, the landlord is responsible for major repairs to the structure and installations, while the tenant is responsible for minor interior repairs and decoration. The tenancy agreement should set out who is responsible for what. Be aware, however, that landlords can’t get out of their responsibilities by adding a clause into the tenancy agreement that says they don’t need to carry out repairs, or that the tenant will have to pay for any repairs that need done. These are unfair terms, and will not be legally binding. You can find out more about unfair terms in Letting Factsheet No. 10.

Possession:

The law requires that a landlord may not evict a tenant from a property unless s/he has first obtained a court order. There are precise procedures that need to be followed before a court will issue a possession order. These procedures are described in our Letting Factsheet No. 20.

More Information:

This Factsheet provides a summary of some of the key aspects of renting residential property in the UK. For more detailed information, you are referred to the following sources: –

  • Ministry of Housing, Communities andLocal Government website –www.gov.uk
  • The Letting Handbook – available from The Letting Centre, website: www.letlink.co.uk