What is private-sector letting?
Do you own a home, but are you unsure whether it falls within the private rental sector? Many landlords do not know the difference between social housing and deregulated rentals.
What is private-sector letting?
If your property is in the private rental sector, you benefit from normal market forces: supply and demand. Put simply, you are free to set the rent. If not, you are bound by the points system. This means the government determines the maximum rent you may charge. Many landlords nevertheless let social housing at private-sector rates, but risk tenants taking their case to the Rent Tribunal.
When does a property fall within the private rental sector?
This depends on numerous factors and is not easy to calculate. Broadly speaking, the number of points your home is worth is largely based on its WOZ assessed value, energy label and additional points for amenities. In the past, location points were awarded separately, but that valuation is now included in the WOZ value.
What are the risks?
As mentioned, many landlords are unaware of the new housing valuation system. The law governing private-sector rentals has changed over the past year. We regularly encounter experienced property investors who are not fully aware of these new rules.
If a tenant believes the rent is too high, they have the right to approach the Rent Tribunal. It determines the property’s exact value under the points system. If too much rent has been charged, you as the landlord may have to repay the excess and/or reduce the rent. This also depends on when the tenant approaches the Rent Tribunal.
Advice from a letting agent
Are you planning to let your property, but are unsure whether it falls within the private rental sector? Our agents have extensive experience calculating these points. They can quickly tell you whether you face a risk and what improvements you could make to limit it. Perhaps selling and later investing in a more marketable rental property would be a better option? Some specialists charge for a written report, but we would be happy to visit you and offer advice without obligation!