Call for clarity on rent-to-rent

Landlords need more clarity on rent-to-rent arrangements, with the NRLA calling for better official guidance to prevent landlords falling foul of rogue operators.

The association recognises the model has been open to misuse, and, in response to a consultation run by National Trading Standards, said that stronger guidance, and improved information about how rent-to-rent operates, would help landlords and tenants identify legitimate schemes.

Recent research carried out by the NRLA found landlords have had mixed experiences with rent-to-rent, with some citing a lack of clear guidance from sources such as the Government and Trading Standards as an issue.

Instead, it was reported, many landlords are relying on advice from other landlords, often via social media.

The issues 

When working as it should, rent-to-rent allows landlords to pass responsibilities and compliance over to third party rent-to-rent agents.
These agents pay the landlord a guaranteed rent, typically below market value then lets out the property to tenants at a higher rent, keeping the difference as their payment.

On paper it could be seen as a win/win. Time poor landlords can outsource day-to-day management, while those without large capital payments to put down on a property can make a living from property.

However, landlords need to be careful, as there are risks.

Some landlords who have entered into such arrangements said their properties were returned in a poor condition, others that third parties were renting their homes to undesirable, sometimes criminal, tenants. Others did not receive the rent as promised.

In addition to this mortgage conditions sometimes prohibit rent-to-rent, and the practice has also been given a bad name by those running unlawful rent-to-rent schemes – subletting properties without the landlord’s permission. 

What does the NRLA want?

In its submission, the NRLA outlined the complexities of rent-to-rent and called for the Government to produce clear guidance to raise awareness of the potential risks for landlords, and as well as clear directions on how to correctly operate such a scheme themselves.