Moving in together: 5 steps to renting out your other property

Moving in together to new homeTaking the plunge and moving in with your partner is a big step. And it’s not only the emotional commitment; if you own the home you live in, you’ve got to decide what to do with it.

‘Generation rent’

One option is to rent it out. If managed well, this could prove a seriously sensible financial decision. The UK rental market is booming, with high house prices, tighter mortgage availability and a shortage of supply driving demand higher.

And with the number of homeowners predicted to fall from 69% to less than 63% by 2015, demand for rented property will, in all likelihood, only get stronger.

Do the maths and target your market

Most importantly, work out if the expected rent will cover your mortgage payments. And allow for one month a year without a tenant.

You should also consider your target market: Will your property appeal to families, young professionals or students perhaps? Should it be furnished or unfurnished? Will a longer or shorter lease arrangement be appropriate?

Legal requirements

There are legal requirements regarding areas such as fire regulations and taxation, as well as insurance (to protect both you and your tenants). If the place burned down but you were still only insured as an ‘owner occupier’, for example, you wouldn’t receive a penny!

Key considerations

Here are 5 key elements you should consider if you’re going to rent out your property:

1. Letting agencies or DIY?
Many landlords use letting agencies to manage the property, and some even provide rent guarantees. However, this comes at a price; typically around 15% of the monthly rent.
However, a clued up landlord, with perhaps just one property to manage, can do it just as well. But if you really haven’t got time, or have moved away, consider asking friends if they’d act on your behalf for a monthly fee.

2. Your mortgage
You’re legally bound to tell the mortgage company if you decide to rent out your property. They may try and switch you to a ‘buy-to-let’ mortgage, which could mean higher charges, but by law they have to be ‘reasonable’ and not necessarily force a buy-to-let deal on you.
Call your provider and see what they can do and write to the ombudsman if you feel they have behaved unreasonably.

3. Don’t skimp on insurance
As a landlord rather than an owner occupier you need a different type of home insurance, and tenants probably won’t look after your home as well as you, so it’s vital that you’re correctly covered.
Additionally, you can take out landlord insurance which covers loss of rent, which can be useful in difficult economic times.

4. Type of tenancy agreement
This will normally be an assured shorthold tenancy (AST) of either 6 or 12 months, and provides protection for you in a number of ways: you can get your property back after the fixed period, end the tenancy at any time if your tenants don’t pay rent, and re-possess the property if it’s damaged.

5. Safety issues
As a landlord, the furniture and furnishings you provide need to comply with fire safety regulations. And the gas and electricity supplies must be safe and checked regularly. The same applies to the property’s upkeep (such as structure, windows, access, sanitation etc.).

Policy Expert

Whether you want assistance in finding the right home insurance policy or even handling a claim, we make sure it’s all handled by experts. For more information speak to one of our experts on 0203 014 9300 or email

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