The Complete Guide to Becoming a Landlord in London
By Azeem S. | Created on 21st July 2025
Maybe you’ve never rented out a property before but often wondered whether becoming a landlord might be the thing for you. Perhaps you have money to invest and are considering property, or you’ve inherited a place and are wondering whether to let it out rather than put it up for sale.
Whichever route you are taking, if you have property in high-demand areas like Stratford or East Ham, strong rental yields can generally be achieved. However, there is a lot more to being a landlord than simply collecting rent payments.
This guide explains how to become a landlord and details all of the key responsibilities and considerations to consider before making your decision.
Is It Worth Becoming A Landlord In London?
London rents are the highest in the UK, and becoming a landlord can be lucrative in the long term. East London offers lower-cost homes and some of the highest rental yields, with Stratford leading the way. Croydon, Enfield, and Ilford offer consistent appeal to commuters, enhanced by the opening of the Elizabeth Line. But there are no guarantees. You’ve got to consider all the pros and cons before buying an investment property.
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If you are purchasing a second property to rent out, you will need to pay stamp duty and a second home surcharge. London average rents have been growing consistently but more recently, the growth has slowed down. Nevertheless, the demand for rental properties in areas with convenient commute times, with lower rent than central London, remains high and rents are still rising.
The commute time from Ilford to central London can be made in around 30 minutes and the average monthly rent is around £1,800. To live in a more central part of London, such as Kensington, the average monthly rent is over £3,500. Therefore, professionals working in London can still keep travel times to a minimum and avoid the higher rental prices by living a little further out.
What’s It Like Being A London Landlord?
One of the first things you need to understand about becoming a successful landlord is that it is a business, not a hobby, that you can easily fit around many other commitments. You should approach the responsibilities professionally and seriously.
This means being organised with your paperwork and records, learning how to market your property to the right target audience and making clear decisions based on the best business case.
As a landlord, you must manage your cash flow carefully. Vacant properties, late payments and maintenance costs can quickly make an impact. Monitor spending carefully and look for savings that could raise your cash flow in the long term.
You must be able to deal with your tenants professionally, always maintaining open communication while remembering that yours is a business relationship, not a friendship.
Your Rights As A Landlord
You have a right to expect your tenants to pay rent on time, look after the property and meet the terms in your tenancy agreement. If they don’t, you can take eviction proceedings against them under landlord and tenant laws, including the Housing Act 1988.
You do not have the right to enter the property unless you have given the tenant 24 hours’ written notice, and the only exception is in the case of a genuine emergency.
Questions To Ask Before Letting Property
As a prospective landlord, there are a few questions you might want to ask yourself before getting started:
Am I Allowed To Let My Property?
If your investment property is a leasehold, ensure that the terms of your lease allow you to rent out your property. There may be a condition that you need to obtain consent from the freeholder. Some freeholders will restrict the types of tenants you can rent to, for instance, couples or families only.
You will likely be unable to rent your property under the terms of a standard residential mortgage. If you want to rent your home for a short period, mortgage lenders may grant consent to let. However, in most cases, you must switch to a buy-to-let mortgage, which usually costs more.
Will I Rent Out My Property Furnished Or Unfurnished?
Furnished properties often attract higher rents, but you may need to spend money up-front to fit them out, and you will need to insure and maintain the items you include.
Your decision should be influenced by the type of property you have. Small, city centre apartments are more likely to attract young people with fewer possessions who prefer furnished. Larger houses appeal more to families who may wish to bring their furniture with them. There is plenty of advice about this online.
Will I Allow Pets?
Most landlords prefer tenants not to have pets because they are concerned about property damage and smells. But there are pros and cons. There’s a growing movement to encourage more pet-friendly rentals. If you are prepared to consider well-behaved pets, this may attract a larger pool of potential tenants and allow you to charge a higher rent.
Under the Renters Rights Bill, it will become even more difficult to say ‘no’ to having pets in your rental property – so there is likely to be less choice in the matter when the bill comes into force.
Will I Allow Tenants To Smoke In The Property?
You can include a no-smoking clause in your tenancy agreement and advertise the place as being for non-smokers – in reality, it may be difficult to police. But if you are sure that you don’t want smokers in your investment property, make sure you say so early on.
How Much Profit Do I Expect To Make?
When contemplating becoming a landlord, you must determine whether it will be a lucrative investment. Estimate the rent you will likely achieve and factor in void periods, as the property may be empty between tenancies. Make a list of all the costs of being a landlord, including your buy-to-let mortgage, landlord insurance, letting agent fees, maintenance, and repairs.
You can start calculating rental yield using your investment property’s purchase price, projected annual rent, and costs.
Understand Your Landlord Responsibilities
These are the housing laws for landlords in England. Note that they differ in Northern Ireland, Scotland and Wales, and your local council may also operate its own local schemes.
Landlords must fulfil specific health, safety, and legal obligations and comply with various regulations, including tenant and local laws. Here’s an overview of the essential guidelines to follow:
1. Repairs & maintenance
Landlords are responsible for most repairs and maintenance in rental properties. This includes hot water and heating, electrical wiring, plumbing and sanitation, and repairs to the external structure of the building.
2. Fitness for human habitation
As a landlord, you must ensure that the rental property is ‘fit for human habitation’ for the duration of the tenancy. If the tenant believes you haven’t fulfilled your responsibilities, they can take you to court. Issues which might make the property unfit for habitation include damp and rodent infestation.
3. Gas safety checks (annually)
You must arrange for gas safety checks to be carried out annually by a gas-safe registered engineer, including checks on all gas appliances in the property.
Landlords must have the electrical installations in their rental properties inspected and tested by a ‘qualified’ and ‘competent’ person at least every five years. An EICR (Electrical Installation Condition Report) certificate is issued following the inspection, and any required remedial work must be arranged.
5. Smoke & CO alarms
Under fire safety laws, there must be at least one smoke alarm on each floor of the property and a carbon monoxide alarm in any room containing a fuel burning appliance. Landlords are responsible for ensuring CO2 and smoke alarms are in proper working order on the first day of the tenancy.
6. Valid EPC certification
Rental properties must have a valid EPC (Energy performance Certificate) that provides prospective tenants with energy performance information, including the EPC rating and estimated energy usage of the property. Private rental properties currently must be a minimum rating of E but there are plans to increase this to C.
7. Deposit protection measures
You are required to protect your tenant’s deposit in a government-approved security deposit scheme. If you don’t use one of the deposit protection schemes, you could struggle to regain possession of the property, and your tenants could take you to court.
8. Right to rent checks
If renting out property in England, you must check your tenant’s right to rent your property. Right to rent checks must be completed for all tenants aged 18 and above, of all nationalities.
9. HMO & Licensing schemes
Many London boroughs now run Mandatory HMO (House in Multiple Occupation), Selective HMO and Additional Licensing schemes. Under these licensing schemes, local landlords are legally required to obtain a licence to rent out a property. The london.gov.uk license checker allows you to search by postcode to check which schemes apply to you.
10. Legionella risk assessments
Landlords have a legal responsibility to conduct Legionella risk assessments, ensuring that stored and running water temperatures meet the minimum measurements.
11. Providing tenants with key documents
Your tenants must be provided with certain documents, including an energy performance certificate (EPC) and a copy of the government’s How to rent checklist.
12. Prepare The Property For Tenants
To help you make your property as appealing as possible to prospective tenants, invest some time in sprucing it up. Deal with any outstanding DIY jobs and ensure that the property is decorated to a good standard in neutral shades.
Things To Do Before Your Tenant Moves In
Make sure your tenant has read and understood everything in their assured shorthold tenancy agreement and that the home is clean, tidy and ready for them. You should also ensure you have left instructions for all appliances, details of who to contact if there is a problem, when the bins are collected, etc.
1. Decide On The Rent
Work out how much rent to charge by looking at comparable properties in the area where you plan to invest. Try searching property portals like Zoopla and Rightmove to do this. You can also speak to local estate agents, who will be happy to give you a valuation, even if you don’t end up letting with them.
Be realistic about how other properties on offer match up to your investment. Do they have the same number of rooms, and are they in the same state of repair? The location will affect the prices that tenants are willing to pay. You must also consider the likely budget of the tenants you want to attract.
2. Get Your Paperwork In Place
Becoming a professional landlord means being organised from the outset with a sound filing system for online and paper landlord-tenant documents.
Have copies of all the gas, electrical, and other essential certificates in a safe place, ready for when you need them, along with your property’s EPC, insurance policies, and guarantees for any work you’ve done.
You’ll also need to keep copies of all the paperwork related to the tenancy, including the tenancy agreement, information about the security deposits protection scheme you are using, your rental inventory and proof that you have completed the right-to-rent check.
Once your tenant has moved in, you must keep detailed records of all the rent payments received and any costs related to the property, including landlord insurance, as these details are required to complete your annual tax return and pay the correct property taxes.
3. Create a landlord inventory checklist
Many landlord and tenant disputes centre around damage to the property and its fixtures and fittings. Create a complete inventory for your property to record the condition of each room and its fixtures and contents.
Include lots of detail and take some photos and videos to support the written description. At the beginning of the tenancy, the tenant should sign the inventory to confirm it accurately represents the property.
4. Arrange landlord Insurance
Buildings and contents insurance is not a legal requirement, but it is a good idea for obvious reasons. If you have a mortgage on your rental property, the mortgage provider will require you to have building insurance.
You will need specific landlord insurance; standard home insurance policies are not valid for rental property. Landlord liability insurance is also recommended. This form of public liability insurance covers you if tenants claim for injury or damage to their possessions linked to the property.
You might also want to take out rent guarantee insurance that covers any loss of income if your tenants don’t pay the rent.
Finding And Referencing Tenants
You can use a letting agent to find tenants for you and take care of screening tenants, or go it alone, advertising on local forums and sites like Gumtree.
However you go about finding tenants, background checks are a valuable way of ensuring they are likely reliable. Always obtain references to establish your tenant’s identity, creditworthiness and character. Your referencing process should include:
Check their ID and obtain proof of address – ask to see their passport or driving license and recent utility bills.
Checking income – Ask for at least 3 months of payslips. We recommend you require monthly earnings to be two and a half times the rent.
Employer’s reference – This should be a written statement confirming that your prospective tenant is in permanent employment. Do follow this up with a phone call to check authenticity.
Landlord’s reference – Hearing what a previous landlord says about them is invaluable. A reluctance to provide a landlord reference should set alarm bells ringing. If your potential tenant hasn’t rented a property, seek a personal reference instead.
Credit check – This will indicate whether the person has a history of not paying their bills. In the UK, you can use three credit reference agencies – Experian, TransUnion and Equifax.
Understanding Taxes For Landlords
Landlords will need to pay tax on their profits or if they sell their investment property. At the same time, there are various expenses which landlords can claim, and new regulations regarding digital accountancy from April 2026. See the full details in the headings below:
Paying Income taxes
The income landlords receive must be declared on an end-of-year tax return. If you are currently employed and are taxed by PAYE, you must register for self-assessment. You must do this by 5th October following the tax year you had rental income.
As a landlord, you must pay income tax on the profit you make after any allowable expenses have been deducted. Allowable expenses include maintenance and repairs (but not property improvements), buildings and contents landlord insurance, interest on property loans and any gas, water or electricity bills you pay.
Paying Capital Gains Tax (if selling up)
Landlords must also pay capital gains tax, so if you decide to sell your investment property in future, remember to account for this.
Claiming landlord tax credits
Landlords can claim tax credits on 20% of their mortgage interest payments. Historically, landlords could claim full deductions for mortgage interest but this was phased out by the government and replaced with the 20% tax credit on interest.
Claiming domestic items relief
You may also claim some tax relief on replacing domestic items, including white goods, sofas and beds. If you need to replace domestic items that are no longer usable due to wear and tear or breakages, tax relief can be deducted for the cost of buying like-for-like items as replacements. The additional cost for making upgrades or improvements will not be deductible under the relief.
Ending A Tenancy
If you want a tenant to leave your property for whatever reason, there are steps you need to take to stay on the right side of the law.
Currently, you have two ways to evict a tenant under the Housing Act 1988 legally:
Serve a Section 8 notice
Serve a Section 21 notice
Section 21 notices explained
A Section 21 notice isn’t technically an eviction. By serving a Section 21 notice, you are giving notice that you intend to regain possession of the property from the tenant. You can use Section 21 to give notice of possession without providing a reason as long as you are at the end of a fixed-term tenancy or during a periodic tenancy with no fixed end date.
Landlords who do not meet their legal obligations are not able to serve Section 21 notices. For example, if a landlord has not protected the deposit in an approved tenancy deposit scheme by the required deadline or has not provided a valid EPC or gas certificate to the tenant will not be able to serve a Section 21 notice.
Also, if the landlord has not obtained a required licence, such as a mandatory HMO, additional HMO or selective licence, they won’t be able to serve a Section 21 notice.
Section 8 notices explained
If your tenant has done something to break the terms of their tenancy agreement, such as failing to pay their rent, damaging your property or causing a nuisance, you can serve them a Section 8 notice. Subletting is another common type of lease agreement breach that falls under the Section 8 grounds for eviction.
Serving a Section 8 notice will involve court proceedings, so even if you have grounds for eviction, you may choose to use a Section 21 notice instead, as long as the tenancy’s fixed term is coming to an end.
Future changes to landlord responsibilities
There are a couple of upcoming changes which will affect your responsibilities as a landlord. Keep reading to understand both of them below.
Renters Rights Bill changes
Under the upcoming Renters’ Rights Bill (RRB), Section 21 “no fault” eviction notices will be abolished and landlords will be required to have a valid reason for evicting a tenant. Once the RRB comes into effect, landlords will have to use Section 8 for eviction proceedings. The bill will provide stronger grounds for eviction under Section 8.
There are, of course, many other changes that are due to come into force with this bill, including the Decent Homes Standard, Awaab’s Law and a new landlord database.
The Making Tax Digital Scheme
From April 2026, the Making Tax Digital (MTD)scheme will come into effect, with landlords earning over £50,000 in qualifying income (combined rental income and income from self-employment) required to use MTD for income tax. The qualifying income thresholds will reduce over the next tax years.
Read more about tax, self-assessment and allowances for landlords on the gov.uk website. If you are unsure about tax and self-assessment, get advice from an accountant with experience in property and tax or contact HMRC.
Decide Whether To Use A Property Management Company
Now that you have a better idea of all the responsibilities involved in being a landlord, you can decide whether you want to manage the property yourself, arrange repairs and collect rent, or use a property management company.
Using a property manager or property management company will make it much easier to be a landlord but also reduce your profits. A property manager usually charges around 10% of your monthly rent but will take away much of the hard work and headaches of being a landlord.
I began as a junior apprentice in a corporate estate agents in 2006 have been working in the property sector since, so over 14 years of experience. I have worked in a range of industries from Property sales and lettings, to construction, development, commercial sales and lets as well as facilities management and maintenance. I have a degree in Economics, enjoy keeping fit and healthy, support Man Utd and have a young family.
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