While the residential property market remains sluggish, the demand for rental properties in the area continues to grow – and farmers sitting on empty cottages could well be cashing in.
According to the latest RICS Residential Lettings Market Survey, average rents in the West Midlands increased by nearly five per cent compared to the national figure of 4.3 per cent over the past year and are expected to increase about five per cent again over the next 12 months.
Rental increases have been driven by sustained growth in demand and stable supply and surveyors estimate that average gross yields currently stand at 5.2 per cent.
Demand is coming from would-be buyers having to remain in rented accommodation as they struggle to access mortgage finance.
If you are thinking about renting out a property it pays to take advice from an agent to ensure that you are within the law and also to help market the property.
Most rentals these days are sourced from the internet and a property agent will have access to the property site Rightmove to market the property for you quickly.
The last thing you want in your property is an undesirable tenant, so avoid this by tenant referencing. Even if you know the applicant you must have them checked out. We use an external agency which will have access to credit checks and previous landlord and employer history. You must know your potential tenant’s credit rating and you must follow up all references.
The two important legal requirements for letting property concern tenants’ deposits and Energy Performance Certificates. We would recommend that you always take a deposit – at least one month’s rent, but sometimes more if the house is furnished or if pets are allowed.
To comply with the Tenants’ Deposit Scheme this deposit must be protected, either through an insurance-based scheme or by registering it with the government’s Deposit Protection Service.
If you are not protecting a tenant’s deposit you will lose the right to serve notice to regain possession of the property and you may be fined as well.
It is also a legal requirement to provide an Energy Performance Certificate for all rented properties being re-let. Specialist agencies offer this service and the certificate lasts 10 years.
In respect of other legal obligations, we can arrange gas and electricity safety checks, as well as checks on soft furnishings.
Hollie Savage is part of the team at Berrys, Shrewsbury