The last few years have created the phenomenon of the ‘accidental landlord’. Even adverts refer to it nowadays, whereby a person who has by chance acquired a second property as an investment, may require specific insurance for the privilege.

The truest meaning of the term applies to those people who have had to move without having sold their present property, prior to the date of the relocation. These circumstances can occur for a variety of reasons, although most commonly it’s due to work transfer or family obligations.

To facilitate a move, often proposed sellers, who, straddled with a mortgage on their current home cannot afford to leave the property empty, whilst either renting or having to buy another property in a new town or city, they therefore choose to rent out their existing home, thus becoming ‘accidental landlords’. Other motivations include the combining of two independent households, whereby one or both of the partners will let their house(s) or flat (s) to enable a move together. This can mean that they either reside in one of the partner’s remaining property’s, or, let both of them and take a tenancy for something else between them.

These landlords have been increasing in numbers, certainly over the last couple of years, probably in part due to the high returns that residential property has historically produced, but also, since the introduction of higher and progressive Stamp Duty Land Tax (SDLT), many would- be buyers have found the acquisition costs too expensive, so have decided to let out their own homes and move into rented instead. A further contributory factor is the dramatic rise in sales values throughout London making purchase unaffordable and leaving the younger generations, in many cases, no choice but to rent. This has created a slower sales market with less volume of buyers and increased the time taken to find a purchaser and achieve a sale. Vendors who are working to a rigid timescale may find themselves compelled to consider the rental option, as this is offers more flexibility and a much faster turnaround, with proposed tenants commencing rent payments and taking occupation fairly quickly.

There are undoubtedly advantages for vendors-turned landlords, as they retain a property that may increase in value, which possibly pays for itself (after taking out the costs of any mortgage, repairs and fees), and ensures the retention of an asset base, that in some cases may even provide extra income. Additionally it enables a move to a new property and is a fairly simple process providing professional agents are used and the legislation and regulations are met.

But there are a few downsides too when letting your home, as there are responsibilities that go with the territory. During the course of a tenancy, repairs may be required, disgruntled tenants may phone at any hour of day or night to complain that the central heating has packed up, the washing machine is on the blink, or a leak has sprung from nowhere, amongst a host of other reasons, (I think by now I have heard most, if not all), so it can be a stressful experience and it doesn’t suit everybody.

Accordingly, when considering this option look at the achievable rental price (ask local agents to assess this for you), see what outlay is involved such as agents commission, tenancy agreement charges, inventory fees, associated expenses relating to meeting regulation and legislation, expenditure for any repairs that may be required, any mortgage costs per month, plus expenses for any legal work (if necessary) and extra accounting charges. Make sure that you investigate your tax position too, so that you understand whether this is financially viable for you.

If you are sure that rental is worthwhile, especially if you are moving abroad or some distance from the property, decide whether you want someone to formally manage your tenancy, so that matters such as rent collection, repairs etc. can be handled in your absence. The person or company of your choice will probably require payment so include the costs for this service into any proposed budget. This is usually money well spent, as a good manager should ensure that all repairs are dealt with rapidly, that your property is cared for and provide a higher possibility that your tenants will want to stay in situ for an extended period.

Published in London Property Magazine March 2017