It doesn’t matter who you let your property out to, the Right to Rent legislation requires landlords to verify that all tenants (aged 18 and over) can legally rent their residential property.
Can international students rent a house? Advice and Guidance for Landlords
Landlords are discovering the many benefits of letting to students. In university towns and cities, such as London, the demand for student accommodation is high and rental periods are long. As a result, landlords who let to students can expect some of the best yields when compared to letting to other types of tenants.
After spending their first year in halls of residence most students choose to rent privately for their remaining time at university. This may be renting a room in a house where each room is rented separately or renting a house with a group of friends.
There is an increasing number of overseas students looking for accommodation in London, and these students could be even more profitable as they are often from wealthy backgrounds and willing to pay rent upfront.
However, some landlords can have concerns over letting to international students because of complexity around the right to rent checks and an inability to provide a UK based guarantor. Here we address these concerns, and other aspects of renting to students, so landlords don’t miss out on this lucrative market.
Right to rent checks
It doesn’t matter who you let your property out to, the Right to Rent legislation requires landlords to verify that all tenants (aged 18 and over) can legally rent their residential property. Every new tenant must undergo the rigours of the Right to Rent checks – it is against the law to only check people you think are not British citizens.
This will involve asking to see original documents that prove that they can live in the UK. You will need to make sure these documents are genuine, and you must take a copy (a legible photocopy or photograph) of each document for your records. More information on which documents are acceptable in a Right to Rent check can be found here
Whilst it may seem time-consuming to check unfamiliar passports, this is no reason to write off letting to internationals. You can use the government’s landlord’s checking service
to ascertain whether the tenant has a right to rent. Also, here at Plaza Estates, we can undertake your tenant checks for you.
When carrying out your checks, you may discover that your student tenant only has the legal right to rent property in the UK for a limited period of time. If this is the case, you must carry out a follow-up check either 12 months following the previous check, or just before the permission deadline to stay in the UK is up.
How do I protect my income?
Student tenants can seem particularly risky as they normally do not have a regular source of income and have a reputation for being bad at managing their money.
Ask for a guarantor
Landlords mitigate this risk by requiring a UK based guarantor, typically a parent or close family member, who is responsible for the rent if the tenant should fail to pay.
Ask for rent paid up front
Landlords are often weary of international students as they are unable to provide a guarantor who is based in the UK. It is difficult to reference check parents of international students and complicated to take legal action against them should the rent not be paid. Instead, landlords can ask international students to pay a lump sum of six months rent at a time, which protects against fear of rent arrears.
Many landlords find that this is a non-issue as international students tend to pay their rent on time as they are worried about being unable to complete their course if they fail to do so.
Is there any other legislation to consider?
You are likely to be renting to several occupants who are not from the same family group. This means you may need to apply for a Houses in Multiple Occupations (HMOs) license.
As a simple rule of thumb, your property may be an HMO if:
- At least three tenants live there forming more than one household (even if they are all friends and occupy the property on a single tenancy)
- Toilet, bathroom or kitchen facilities are shared
An HMO requires a mandatory license if it is occupied by five or more people of any age. The Housing Act 2004 gives local authorities the power to introduce additional HMO licensing. Check with your local council regarding what licenses are required.
As a landlord of an HMO you will be required to make sure that:
- the house is suitable for the number of occupants (this depends on its size and facilities)
- send the council an updated gas safety certificate every year
- install smoke detectors
safety check the electrical appliances every five years and be able to provide safety certificates when requested
The council may add other conditions to your licence, for example regarding the standard of your facilities. They will let you know when you apply.
If you have an HMO but fail to apply for a license you face a fine of up to £30,000 per property.
At Plaza Estates, we can carry out the Right to Rent checks, reference checks for guarantors and advise you on applying for an HMO license. Contact us
today for more details about our services for landlords in central London.