Letting guide for Indian landlords

As an Indian landlord, you may find the idea of remotely managing your London property rewarding but an extremely demanding responsibility. Most clients have employed Benham and Reeves’ property management service to avoid such complexities. However, whether you choose to benefit from our professional property management systems or handle things independently, you need to be thorough with the legal, financial and practical aspects involved. We have compiled it all in this letting guide for Indian landlords in London below -

Permissions needed

Before you let your property, there are a few permissions you must receive -

a. Mortgage - If your property is mortgaged, ensure you receive consent from your mortgage lender before letting it out

b. Leasehold - If your property is leasehold, you must ask permission from the freeholder

c. Insurance - Update the insurance provider about your intention to let the property

Tenancy types

Ensure you choose the appropriate tenancy agreement, as this decision will protect your interests while letting the property. Benham and Reeves is here to guide you in selecting a suitable tenancy agreement whenever you let your property.

Assured Shorthold Tenancy (AST)

One of the most commonly used agreements for residential lettings in the UK, the Assured Shorthold Tenancy (AST), is applicable when the annual rent is below £100,000. This agreement outlines key terms, including the rental period, start date and responsibilities of both the landlord and tenant.

AST is an ideal option if you’re letting the property go to a small group of individuals.

Non-Housing Act Tenancies (Including company lets)

This agreement is introduced when the tenant is a company rather than an individual or in case the rent exceeds £100,000 per annum. Also known as Contractual Tenancies, this agreement is used when an AST isn’t applicable.

Short-term letting agreement

This short-term agreement can be used if your property is to be let for six months or less. It outlines clear terms for tenants and landlords. However, tenants don’t benefit from additional statutory protections under this agreement.

Notification of termination of tenancy

As an Indian landlord in London, if you need to end a tenancy, it’s crucial you serve the tenant a valid, well-drafted written notice. It could be either a Section 21 or a Notice to Quit – depending on the type of tenancy. If you don’t correctly serve this notice, it can be considered invalid — meaning the tenancy continues under the original terms and conditions. Rent payments will continue until you serve another valid notice or the tenant hands over possession of the property.

Certifications

1. Energy Performance Certificate (EPC)

Remember that you are legally required to possess a valid Energy Performance Certificate (EPC) for your letting property. This certificate rates your property's energy efficiency and is valid for up to ten years. You need to hand over a copy of this certificate to the tenant too, when they move in. We can get this EPC certificate for your property through an approved provider to ensure compliance.

2. Selective licensing

In some London areas, landlords are required to obtain a selective licence from the local council before letting properties. This area-specific rule ensures compliance with local housing standards. You can end up paying hefty fines if you fail to fulfil this step.

3. Right to rent checks

In the UK, all landlords must confirm a tenant’s legal rights to rent before entering an agreement. This step involves verifying the potential tenant’s passport and visa. We are here to assist if you would like us to handle the physical verification process on your behalf.

Safety responsibilities

1. Gas safety - All gas appliances in your property must undergo an annual inspection by a certified engineer registered with the Gas Safe Register. This rule is covered under the Gas Safety Regulations 1998. Key factors include -

2. Electrical safety - Electrical safety became a primary legal responsibility for landlords in 2019. Key requirements are -

3. Smoke and carbon monoxide detectors

4. Furniture and furnishings compliance - Furniture and Furnishings (Fire) (Safety) Regulations 1988 is a set of rules for domestic upholstery and furniture fire levels. Under this law, you are required to ensure all furniture in your rental property meets its criteria. This includes sofas, beds, cushions, furniture covers and pillows. Curtains, carpets, bed linen and furniture manufactured before 1950 are not subject to this rule.

Financial responsibilities

1. Rent collection

Benham and Reeves simplifies this process for you by -

2. Tenant’s deposit

This includes collecting a deposit amount from the tenants, equivalent to five weeks’ rent. This amount is a safeguard that covers any potential damages or unpaid rent. This deposit is required by the Housing Act and is registered with a Government-backed tenancy deposit scheme.

Note - In the case of corporate tenants, a letter of guarantee can be used to replace the deposit

3. Tax obligations

Note that the profit you make on the rental income is subject to taxation in London. All rental income must be declared to HM Revenue & Customs (HMRC). If you are joint property owners, you need to submit individual tax returns. Deductible allowances reduce your tax liability, including mortgage interest, letting and management fees, insurance, ground rent and service charges, furnished items’ replacements, repairs and maintenance, redecoration and legal and accounting fees.

4. Overseas landlords

The Non-Residents Landlord Scheme applies to your case as you reside outside the United Kingdom. Under this scheme -

Note - It’s advisable to complete the HMRC process and submit it before the tenancy begins to avoid any unnecessary tax deductions. If you’d prefer, we can bring the form to you or direct you to the relevant digital resources.

5. Letting fees

You are required to pay fees when introducing a new tenant, renewals, extensions or handover of existing tenancy agreements. You must also pay these fees when any new deal is set up after the initial tenancy period ends.

Preparing the property for tenants

1. Document inventory

Before the tenants move in, document a detailed inventory report. This is done to secure yourself in any disputes over deposit deductions. This step also ensures transparency with tenants. As a landlord, you are liable to carry all necessary proof during deposit disputes. Without a check-in (and a check-out), it’s highly doubtful your claims will succeed.

2. Handing over the keys

If we are managing your property on the moving-in day, our agents can hand over the keys to the inventory clerk or directly to the tenant. We will also hand over the tenant a point of contact from our team to reach out to in case of any issues or queries.

3. Utility bills and council tax

Your tenants will be responsible for paying utility bills, including gas, electricity, water, telephone, council tax and the TV licence (unless otherwise agreed in the tenancy terms). If our team manages your property, we will inform the local council and utility providers of the new tenancy. Relevant meter readings will be presented to account for accurate billing. If you instruct us only for tenant-find or rent collection services, you must provide meter readings to third parties.

Property maintenance

1. Your responsibilities as a landlord

You are contractually obligated to ensure the safety of both your tenant and the property. The property needs to be well maintained. Swift maintenance is the key to avoiding costly repairs and protecting the property’s long-term value.

2. Dedicated property management service

Our services are carefully designed to eliminate the hassle of day-to-day property maintenance. We assign you a dedicated project manager — a single point of contact who will oversee all aspects of your property’s management on your behalf, including handling repairs and maintenance, liaising with utility companies and managing service charge payments — all while keeping you in the loop.

3. Maintenance and repairs

We partner with certified contractors who are insured and experienced in handling rental property repairs. Besides, our contractors are available 24/7 to address urgent issues. We also secure a set of keys to your property in London to allow timely access for contractors and emergencies.

4. Timely property inspections

We understand the importance of carrying out routine property inspections to monitor the condition of your investment. Your dedicated project manager will conduct at least one thorough annual inspection to examine the house’s condition. A comprehensive report will be shared with you each time the checks are carried out. This report will list down any required repairs or areas of concern.

End of tenancy

1. Checkout procedure

For Indian landlords opting for our fully managed service, we will tackle the complete checkout process. This procedure will include -

If a landlord has opted for our tenant-find and rent collection service, the following is to be handled by them -

Why Indian landlords in London choose Benham and Reeves

As an Indian landlord, managing a property in London can be a hectic, challenging task, especially when you may be required to cater to the high expectations of corporate tenants. Listed below are a few reasons why Indian landlords trust us with property management -

Our commitment to you

We understand the unique needs of Indian landlords. Hence, our services are designed to offer you peace of mind -

With Benham and Reeves’ professional management services, you can focus on other priorities while ensuring your London property stands in top condition and complies with UK regulations. Contact us today to simplify the letting process in London.