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Shorthold tenancies

Assured Shorthold Tenancies: a guide for landlords

Assured Shorthold Landlords get a bad name for the state of repair of the rental property: being greedy, having sub-par white goods and furniture and hiking prices unfairly. But it doesn’t take much to be a good landlord, and attract the best tenants.

When you become an Assured Shorthold Landlord, you will need to decide whether you find an Estate Agent to find tenants, or do this yourself. There are benefits to either, and it may depend in large part whether or not you have the time. If you go down the route of having an agent you can then decide if they will also manage the property: although you will still need to agree to all work and associated costs in advance, and you may find that you pay higher prices when work goes through your agent rather than direct.

An agent can guide you with regards to the relevant rental cost expectations in your area, a search online may also give you parameters for appropriate weekly or monthly costs to rent your property.

When you have interested tenants, ensure you have formal checks in place to assess their ability to pay and look after your property. References are essential to protect you as much as possible.

Once tenants are confirmed, and the rent and term of the shorthold tenancy agreed, you will need to formalise your contract in a written Tenancy Agreement. If you are not going through an agent it may be useful to know that the government has published a model tenancy agreement which can be downloaded for free. You will need to include whether the property is furnished (in part or whole) or not, and it is worthwhile considering whether to have a break clause (which allows early termination of the contract).

Prior to new tenants moving in there must be a check-in report carried out. This is also called an inventory. As of June 2020 landlords are responsible for the costs associated with setting up, renewing or ending the tenancy, including inventory and check-out fees. Both you and the tenants need to sign this report, and it should cover the state of repair of the rooms as well as the contents present. Photos can be useful as an extra safeguard.

You will also need to supply your new tenants with meter readings and your full contact details.

Before renting your property for the first time, or to new tenants, you are obligated to ensure that the property is a safe place to live. As a landlord you need to ensure:
  • The property is free from serious hazards
  • Smoke alarms and carbon monoxide alarms are fitted on every floor, and work (it is the tenant’s obligation to test these during the period of the tenancy)
  • Water, gas and electricity supply is in order
  • You have the documentation for the annual gas safety check by a Gas Safe engineer
  • Ensure the property is at a minimum of EPC energy efficiency band E
You will also need to ensure you have a 5-yearly electrical safety check by a qualified and competent person (new tenancies from 1 July 2020 and existing tenancies from 1 April 2021).


It is good practice to ensure the property and any contents as part of the rental are in a good state of repair. Do remember that should you need to go into the property for things like repairs you will need to seek permission to access and give at least 24 hours notice. You cannot enter the property without permission of the tenants.

At the end of the fixed-term agreement, you and the tenants will need to agree whether to continue the arrangement, either on a monthly basis, or through a new contract. It may be a chance to raise the rental price: a typical rent increase is around 3-5% annually. However, the costs involved in finding new tenants may offset any rental gain. And good tenants may be worthwhile holding onto!

It is important to remember that your rental property is a source of income, and thus treat it like a business. You will need to keep a thorough recording of the finances related to the rental property. Keeping records of income and expenditure will include a log of deposit receipts, rent receipts, maintenance and repair receipts. Digital records can be easier to manage. You should also record all landlord-tenant communication. UK tax laws determine what you can claim as allowable expenses, and what level of tax you pay on the profit.

The government provides guidance on this. It may also be worth seeking guidance of a recommended accountant, the benefit in tax savings can outweigh the cost.

Running your rental as a business means that money needs to exchange hands. Income will include:

  • Rent
  • a refundable tenancy deposit: this is capped at 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above. All deposits must be put in a government-approved tenancy deposit scheme (TDP)

Other permitted fees throughout the tenancy include:

  • a refundable holding deposit (to reserve a property) which is capped at no more than 1 week’s rent
  • payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
  • payments in respect of utilities, communication services, TV licence and Council Tax where the tenant has not paid these directly
  • a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement
  • payments associated with early termination of the tenancy, when requested by the tenant

Like all businesses, you will also need to ensure that you are protected. Most standard home insurance policies don’t cover rentals, and so one straightforward way to protect your property is through Landlord Insurance. This provides cover for the building and any furnishings you have provided as a landlord.  It can also protect you against loss of rental income and liabilities incurred if your tenants, their guests or other members of the public are injured on your property and you are found to be at fault.  It will typically include:

  • Buildings and Contents Insurance
  • Public and Property Owners Liability Insurance
  • Employers Liability
  • Loss of Rent Insurance

Landlords legal protection can be added to these policies to cover the cost of legal fees for things such as tenant eviction, tax disputes and criminal defence related to the policy.

Contact us to get a quote or discuss further.