The property market is often perceived as the safest long-term investment to make when safeguarding your money for your future. 

For example, different investment sectors, such as cryptocurrency, are too volatile and new. Therefore there is nothing to compare what the need for these markets will be in the future. 

However, when it comes to properties, the simple fact is that people will always need somewhere to live. Therefore taking the step to buy and rent out a property is often a great financial investment. 

Although please note that no investment is truly risk-free, it is important to research exactly what you are getting into when it comes to becoming a landlord.

So before you go ahead and put together that tenancy agreement, make sure you know exactly what each legal requirement you must pass is. 

Your Financial Responsibilities

You will face many responsibilities as a landlord, with your financial responsibilities being an obvious element always worth mentioning. For this reason, working with a trusted landlord accountant is important to ensure you are not breaking the law and making the most out of your profits.

The rental income you will have coming in from your property will have to declare to HMRC to make sure you are taxed accordingly. When it comes to the income generated by any rental properties you may have, you will only be taxed after the first £1,000 you will make. 

By working with a dedicated landlord accountant, you will be sure to be paying the right amount of tax as different types of properties will have different amounts of tax which can be difficult to navigate on your own.

Regarding tax and National Insurance, you will have to pay income tax on the money generated from your rental properties and Class 2 National Insurance if your landlord’s work counts as running a business. 

All businesses in the UK have to be registered with the financial conduct authority and are 

regulated by the financial conduct authority to protect consumers, create good market integrity, and promote healthy competition between businesses in each market.

When purchasing a property, it is important to note that you will be responsible for paying stamp duty on the property if the price is at any price above £125,000. Fun fact, this tax was introduced in 1694 to raise funds for the war, with the amount required to be paid changing over the years.

Top tip, remember to set aside some money to put into an emergency fund for the property. Things can be wrong, such as the boiler breaking, and it will be your responsibility to fix any issues associated with the property. Through having an emergency fund in place, you will not take a personal fit financially as hard as if you didn’t have that safeguard in place.

Property Safety Regulations

When it comes to the safety of your property, you are responsible for many different things, such as:

  • The electrical safety of the property
  • Make sure that the property has smoke alarms installed and passes all fire safety regulations 
  • You must make sure that the property has fitted carbon monoxide alarms
  • The property must have an EPC rating to showcase the property’s energy efficiency
  • A gas safety certificate must also be produced to prove that all gas equipment is safely installed

In Britain, there are different regulations and requirements between Scotland, Ireland, England and Wales; therefore, check what is specifically required where your property is located.

The property generally cannot pose any health or safety hazards, and your local council will use the Housing Health and Safety Rating System (HHSRS) to inspect your property for any possible hazards.

You will be required to make repairs to the structure of the property and anything inside the premises like heating, water or gas things. For example, this assessment will take five years to receive an HMO licence application. 

Licences And Insurance Examples

An HMO licence or House in Multiple Occupancy (HMO) licence is in place if more than one household shares common property areas such as a living room or kitchen. 

This licence is important to consider when going through the process of a buy-to-let mortgage, as although you are sure that it is a rental property you are buying, you can maximise the tenant possibilities you can have. HMO licences need to be in place, for example, if you rent to students who will physically count as their households.

Another consideration is to get great landlord insurance as this will offer financial help concerning any damage created to the building structure in the event of weather damage, accidental damage, natural disaster damage or riots. That way, you can be protected in case of the worst.