What Does It Cost to Rent Out a Property in Putney?

Anyone considering becoming a buy-to-let landlord needs to factor in the costs of renting out a property when estimating their likely income. While some of the costs - such as monthly mortgage payments and letting agent fees - may seem obvious, there are many other fees to consider.  

If you’re looking to rent out property in Putney, you’ll find that, like other desirable London locations, rents are high. According to the home.co.uk website, average rents in the area range from more than £2,600 for a one-bedroom property to almost £9,000 for a five-bed.  

For anyone buying their rental property, prices in the area have fallen over the past year, according to the property website Rightmove. However, you’ll be looking at paying between £550,000 for a flat and £1,725,000 for a semi-detached property. To help you do the maths on making the rental project work for you, we examine the main costs of renting out property in Putney: 

1 Buy-to-let mortgage costs  

If you’re looking to buy the property rather than rent out a home you already own, you will need a bespoke buy-to-let mortgage. Usually, you can’t rent out a property bought with a residential mortgage and the interest rate you pay is likely to be higher. You may need to shop around to get a good deal and pass stricter affordability tests. However, there are plenty of companies out there offering landlord products. 

Remember, you will also need to account for the costs of buying the property such as conveyancing fees and stamp duty - including the additional three per cent second homes surcharge.
 

2 Essential costs of letting property  

Your initial outlay when becoming a landlord includes a number of essential costs to meet government regulations. These include: 

• Energy performance certificate (EPC) - your property must have an up-to-date EPC before you can let it. The property must currently achieve at least an E-rating, otherwise you will need to pay for improvements to increase its energy efficiency. 
• Gas safety checks - you must organise a gas safety check of all installations and appliances before your tenant moves in and every year thereafter. 
• Electrical installation condition report (EICR) - you must also organise an inspection of the electrics in the property including the wiring and all built-in appliances. This must be repeated every five years. 
• Smoke and carbon monoxide alarms - you will need to follow the rules for your type of property and fit and maintain the correct alarms - usually one per storey of living accommodation.  
• Landlord insurance - taking out building and contents insurance isn’t a legal requirement on landlords but is highly recommended. It may also be a condition of your mortgage. You can’t use a normal residential policy for rental properties - you will need to shop around for a landlord package. You may also consider other forms of landlord insurance such as rent guarantee insurance or appliance breakdown cover. 
• A landlord licence - check with your local authority, most likely Wandsworth Council in the case of Putney landlords. You must apply for a licence to rent out a large house in multiple occupation (HMO) - one with five or more unrelated tenants sharing facilities. Some councils also require licensing for smaller HMOs and even single household rentals. Wandsworth is currently proposing to extend its licensing scheme. 

3 Costs for professional services  

• Letting agent fees - you don’t have to use a letting agent to manage your rental, but it will save you time and hassle and most landlords do. Letting agents have different fees depending on the level of service. The basic level is usually for tenant finding and vetting with rent collection as an extra. Higher fees are charged for a more comprehensive service including property management and repairs and maintenance. 
• Accountancy fees - as a landlord you will need to register with HMRC for self-assessment and file annual tax returns. If you think you need the support of an accountant for this, add their professional fees to your list. 
• Legal fees - be aware that you may need to pay for legal assistance if there is a problem and you need to take eviction proceedings. The government’s ban on no-fault evictions is currently going through parliament, meaning you may need to take your tenant to court if they break the terms of their tenancy agreement.  

4 Other costs to consider  

• Maintenance and renovation - all properties need upkeep so factor this in. Remember that the size and age of the property will determine how much you need to budget for. 
• Utilities - add these if you are including bills in the rent, as some HMO landlords do. 
• Leasehold property costs - if yours is a leasehold property - many Putney flats are - account for ground rents and property management fees. 
• Cost of allowing pets - being pet-friendly increases your pool of tenants but can bring extra maintenance and repair costs. 

If you’re a prospective Putney landlord we’d love to talk to you in more detail about the costs involved and how you can make the project work effectively for you. Give us a call to discuss our landlord services today.