Pepys Street RTM Company Limited

Letting your flat?

Updated: January 2012

The following articles are by John Walsh, who has been a landlord investor of prestige apartments in central London for nearly ten years. If you have any questions or would like some advice on any particular issue, you can email him on

Any advice given by John Walsh is entirely independent of Pepys Street RTM Company Limited.

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Deposit Schemes

All private landlords and letting agents who take deposits for Assured Shorthold tenancies are required to safeguard them with a Government authorised tenancy deposit protection scheme. The recommended scheme is mydeposits at www.mydeposits.co.uk (see "I am a Landlord").

It is a legal requirement that you issue a certificate to individual tenants, but not if you use a serviced apartment company.

If you do not issue a deposit certificate to the tenant within the first month of the tenancy, you are liable for a fine of £5,000 payable to the tenant. If your Letting Agent fails to register the deposit, the responsibility still falls to you along with the fine.

It is quick and easy to register and by using mydeposits you hold onto the deposit in your own bank account. Other schemes ask you to pay the money to them, but it is easier and more comforting to know that you hold the money. To do this you will need to pay an administration fee of around £25 each time to register and therefore insure the deposit. This way the money stays with you and the scheme cannot accidentally pay the full amount back to the tenant without your agreement.

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Olympic Rentals

It sounds attractive to have a short let for your apartment at perhaps ten times over the current market price. We have all seen the stories in the press about the high rental prices for Olympic property near the sporting venues. But how much of this is just wishful thinking?

John Walsh has several properties near Greenwich Park and hoped to have some Olympic enquires. When he has spoken to local agents many are happy to put the properties on their lists in the hope of finding cash rich sporting enthusiasts, but the reality is a stark one. For most visiting the Olympics they will only be attending one or possibly two events. The likelihood of them needing a property for the full period of the game is slim. So far, local agents are saying that the only Olympic enquiries they have had are from Landlords hoping to cash in!

Those who are part of the Olympic organisation are likely to stay in a hotel. There is a small demand from the families of spectators and those taking part, but they are unlikely to be able to afford current London prices for let only properties at inflated Olympic prices. The athletes themselves will be housed in the Olympic village in Stratford. So the reality is that there is unlikely to be a rush to rent your flat at Pepys Street for the Olympics. However, if there is going to be an offer on your flat it is important to think about the following:

• Do you know the agents contacting you? - It is highly unlikely that someone looking for an expensive short term let will go through anyone other than an established Letting Agent so a random call from an unknown mobile number should be treated with scepticism.
• How much should you be asking? - This is your decision but ensure that all money owed is paid to you in advance and has cleared in your bank account before the tenancy commences. It is highly unlikely you will be able to track someone down for rent once they have left the country after the games.
• Should you charge a deposit and how much? - Yes you should. Even if the rent is for a couple of weeks, you should ask for a standard six weeks deposit (calculated at your normal rental price). Remember, this is to ensure that damage caused during the tenancy is recoverable.
• Do you need to register this deposit? - No you do not. When it is a short let like this you can hold the deposit and administer its return.
• What fee will an agent charge? - Some agents are asking for fees of 25% + VAT and over. This is something you can negotiate with an agent but many ask prohibitively high fees for short lets, so be sure about what you are entering into.
• Sub Letting - Ensure that an agent does not sub let your flat during the Olympics without your knowledge and pocket the entire rent. If you have keys with an agent for a flat which is currently vacant, make unannounced spot check visits to ensure you are not being scammed. This is known to happen and with some of the most well known Letting Agents.

What is an EPC?

See here for further information on Energy Performance Certificates and your requirement to have one.

What is currently the best rental price in the block?

Rental prices are increasing within the block and a one bed fully furnished flat on an Assured Short hold Tenancy Agreement is now achieving £425 per week. If you know different then please let us know by emailing

What is a short let?

This is a rental period of a few weeks, sometimes three months. The rent for these periods is much higher averaging £780 per week for a one bed and £1,200 per week for a two bed flat. However, taking this option to let your own flat on a short let basis will mean you are likely to have void periods when there is no tenant and therefore no rent. The best option is Assured Short hold Tenancy which is often with a six month break clause.

Thinking of letting but not sure whether to use an agent to manage your property?

The difference could save you thousands per year. The cost of a fully managed service can be as high as 20% plus VAT. Managing a property like Pepys Street is quite straight forward. For the most part you need the name and number of a reliable building contractor who can offer you a good service. See here for useful contacts.

What does an agent do when they manage a property?

During a managed service any repairs and general maintenance are dealt with by the agent. However this entails the agent contacting a builder for which you will be charged. Often you do not have a chance to investigate works and repairs nor are you offered the opportunity to obtain comparison quotes. Agents sometimes add their own admin fee to this service too!

How much is a let only fee?

If you just want an agent to find you a tenant they can do this for a Let Only Fee, which is always negotiable, but you should not expect to pay more than 8% plus VAT for this service. For this they will market your property and find you a suitable tenant. This cost will also include a credit check. We recommend a MARAS check. The cost of this check and the administration of it will be included in the fee that agents charge. Check before agreeing that the agent you have chosen does indeed offer this service.

How do I get my rent payments?

As part of the tenancy agreement be sure to include a clause which instructs the tenant to pay directly into your bank account on or before the due date each month. We strongly recommend that you do not allow the agent to collect the rent on your behalf. This is simply their way of holding on to your money for sometimes up to six weeks or more. A rent collection service does not guarantee you will receive your rent, nor allow you any legal leverage over a non payment by your tenant. In this instance even on a fully managed service, your agent will advise you to take independent legal advice, at your own cost when pursuing a defaulting payment.

Also, if the agent collecting your rent goes into liquidation, you cannot reclaim the rent that may be lost from the agency or the tenant. You are advised to have the rent paid directly into your bank account by the tenant each month.

The New Rules on Renewal Fees

The Office of Fair Trading (OFT) secured a final High Court order against Foxtons in July 2010 which prevents them from using unfair terms in their contracts. The estate agent is allowed to charge renewal commission, but only if it continues to actively manage the tenancy. However, it cannot charge commission on the sale of a property.

This case, and the changes Foxtons has now made, sends a wider message to letting agents and businesses in general that important terms, particularly those which may disadvantage consumers, must be clear, prominent and actively brought to people's attention. Consumers should not be presented with a surprise bill for services they have not consciously agreed."

If you are not with Foxtons you need to remember to ask about renewal fees before you sign Terms & Conditions to see if there is a renewal fee and under what terms you are expected to pay. I personally inform letting agents in advance that I do not pay renewal fees and have asked for them to be removed from their Terms & Conditions. You can also cross them through before signing. I negotiate the terms of subsequent years directly with the tenant.

However, if you do rely on the agent to negotiate for you and set a higher rent then you can come to a negotiated renewal fee. Something around 3% seems fair. As a rule I only pay a maximum of 8% for a Let Only service - i.e. where they find you the tenant at the start of the tenancy but you manage the flat and collect the rent yourself.

If you do pay a management fee to an estate agent, be warned that repairs they arrange are often not charged at the best possible price but merely the most convenient for the agent. See here for a list of reputable and reliable service trades.

Water Rates - Are You Claiming Them Back?

Have you been claiming back your water rates as a Landlord?

All tenants, whether individuals or corporate sub letters pay the water rates. You as the Leaseholder are charged this through your Service Charge. You need to ensure that you have a clause within your tenancy agreement that states that water rates are deducted from the deposit.

The other utilities such as electricity, TV, phone and Council Tax are all paid by the tenant directly. Water rates can be calculated from the Estimated Service Charge Expenditure sheet you receive each year. You can then provide an invoice of these costs along with any others for cleaning and repairs that might be relevant. You do not need to be a registered company to raise an invoice.

Many landlords forget about this and end up subsidising their tenants by paying their water bills.

The following Estate Agents handle the letting of flats in the area and offer Leaseholders at 1 Pepys Street a reduced rate on their letting and management services as follows:

• Let only service: 7% + VAT
• Full letting and management service: 12% + VAT

Portland Apartments are a specialist Corporate Housing and Relocation service provider. They have an on-going requirement to rent good quality apartments at 1 Pepys Street on long term leases. To ensure their apartments are always in immaculate condition they fully manage all their properties at no extra cost, provide weekly maid services and have their own 24 hour contact service to assist with any guest queries or problems about the property. Over 60% of their landlords lease them multiple properties as they understand that their apartment is always incredibly well maintained, rents are always paid on time and they have security of tenure.