Letting to students can be extremely lucrative, especially international students as they are often from wealthy backgrounds and willing to pay rent upfront. Landlords could be missing out by dismissing the student letting market.

However, when you rent to students, whether they are British or international students, there are some rules you must be aware of.

Right-to-rent checks

It doesn’t matter who you let your property out to, the Right to Rent legislation places demands on landlords, and it’s vital to know what the law says and what your responsibilities are.

Before the start of a new tenancy, you must check all tenants (aged 18 and over) can legally rent your residential property. This is the case even if there is no tenancy agreement, they’re not named in the tenancy agreement, or the tenancy agreement is not yet in writing.

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 safe-keeping. Also, record the date when you carried out the check, and the tenant should be present. More information on which documents are acceptable in a Right to Rent check can be found here.

The Rent to Right checks must be carried out within 28 days of the start of the tenancy.

The Right to Rent checks do not apply to students living in university halls of residence or student accommodation.

What if the tenant can’t produce the right document/s?

international-student-rent-checksA tenant may not be able to produce the right documents, but that doesn’t automatically mean they do not have a right to rent. You can use the government’s landlord’s checking service to ascertain whether the tenant has a right to rent, as it might be that the Home Office has their documents, or they have been given ‘permission to rent’ by the Home Office.

What if the tenant only has a ‘time-limited right to rent’?

When carrying out your initial checks, you may discover that the 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 (whichever date comes last).

You must notify the Home Office if your follow-up checks reveal that the tenant no longer has the right to rent property in the UK.

What happens if you don’t comply?

Landlords who rent their property to someone who is not legally allowed to rent in the UK can receive an unlimited fine or even be sent to prison.

How do I protect my income?

Student tenants can be difficult to reference using the standard process because they do not have a regular income and have usually come straight from living with parents.

Seek a guarantor

One option is to seek a guarantor for each student tenant. Usually a parent or guardian, the guarantor will themselves be referenced and is responsible for the rent if the tenant should fail to pay.

Ask for rent paid upfront

It can be 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.

Is there any other legislation to consider?

international-student-rentalYou 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.

If you have a letting agent acting on your behalf, then they can carry out the Right to Rent checks, reference checks for guarantors and advise you on applying for an HMO license. For more details about our services for landlords in Islington, Stoke Newington, Newington Green and Highbury, contact our agents today.