How to Become a Landlord in the UK [Complete Guide]

So, you're thinking about becoming a landlord. Maybe you’ve been exploring property as an investment, or you already own a place you'd like to rent out. 

It can be a solid move – with rental income, long-term property value, and the opportunity to provide someone with a good home.

That said, it’s not just about collecting rent. You’ll take on the responsibilities of managing the property, keeping on top of repairs, handling paperwork, staying compliant with legal requirements, and sometimes dealing with difficult situations. 

If you're ready for the challenge, this guide will walk you through everything you need to know.

Is becoming a landlord right for you?

Before diving into the details, you’ll want to ask yourself if being a landlord is a good fit:

If these potential obligations seem manageable and you’re still excited, it’s time to move forward.

Licensing & permissions – What do you need

Your first step is to determine whether your property – or the property you plan to buy – requires any kind of license. This depends on the type of rental arrangement and the local council’s rules.

1. Mandatory HMO license

If you’re renting to five or more tenants who form more than one household (i.e., unrelated people sharing facilities like a bathroom or kitchen), you typically need a House in Multiple Occupation (HMO) license.

2. Additional licensing

Some councils require smaller HMO properties (e.g., three or four unrelated tenants) to be licensed. Check with your local authority to be sure.

Selective licensing

In certain areas, all rental properties need a license, regardless of how many people occupy them. This is known as “selective licensing,” often introduced in specific regions to improve housing standards.

❗ Remember that failing to get the correct license can lead to steep fines and even rent repayment orders. Make sure you investigate local rules right away.

These figures can vary by council. Always check with your local authorities for the latest fees and requirements.

How to secure a Buy-to-Let Mortgage

If you already own the property outright or you’ve cleared it with your lender to rent out your main residence, you can skip this section. 

But if you need to purchase a new home specifically to let, you’ll likely need a buy-to-let mortgage.

What do you need to know?

Example

Suppose you find a flat in Liverpool for £150,000. 

You might put down a 25% deposit – £37,500 — and borrow the remaining £112,500. 

If your monthly mortgage payment is around £350 (interest-only), your lender will likely want your rental income to be at least £435–£508 per month (125–145% of £350) to approve the loan. 

If comparable flats in the area rent for £600–£650, you’re probably in good shape.

Prepare the property: Safety & legal requirements

No matter if you’re renting out your existing home or a new buy-to-let, the UK has strict safety and legal rules you must follow:

❗Note: You should keep digital and/or physical copies of all these certificates. 

If you ever need to evict a tenant (e.g., via Section 21 in England), you must prove you provided them with the necessary documentation at the start of the tenancy.

Self-managing vs. Using a letting agent

You have two basic options for managing your rental: doing it all yourself or hiring a letting agent. Neither is automatically better; it depends on your personal circumstances, time availability, and comfort with admin tasks.

How to advertise and find quality tenants 

If you opt for a full-service letting agent, they’ll likely take care of advertising. But if you self-manage (or go for a tenant-find-only service), here’s how to attract good tenants:

⚡Write a compelling listing

⚡Take clear, bright photos

⚡ Hold viewings

⚡ Tenant referencing

Setting up the tenancy

Once you’ve selected a suitable tenant, formalise the relationship with a written tenancy agreement – most commonly an Assured Shorthold Tenancy (AST) in England and Wales. 

Key details:

Remember: You must provide tenants with:

Failing to provide these documents can limit your ability to serve certain eviction notices (like Section 21).

What is your day-to-day management as a landlord?

Congratulations! You now have an occupied rental property. Here’s what to expect going forward:

⚡Rent collection

⚡Handling maintenance

⚡ Routine inspections

⚡Tenant communication

How to minimise void periods

A void period is any stretch of time when your property stands empty, generating no rental income but likely still costing you mortgage payments, insurance, and council tax. 

Here are some strategies you can implement to reduce voids:

Taxes & Financial responsibilities

Now, let’s move on to the less interesting part of being a landlord:

Rental income tax

You pay tax on your rental profits (rent minus allowable expenses). 

The tax brackets depend on your overall income, including any day job:

Also, note that mortgage interest relief is no longer fully deductible; instead, you typically receive a tax credit of 20% on the interest portion. 

So, keep a detailed record of every allowable expense, such as insurance, repairs, or letting agent fees.

Stamp Duty Land Tax (SDLT)

When you purchase a second home (or any additional property) in England or Northern Ireland, you pay a 3% surcharge on top of standard stamp duty rates. 

Here’s a simplified table for that surcharge:

Always check current government guidelines, as thresholds and rates can change.

Capital Gains Tax (CGT)

If you sell your rental property for more than you paid (minus allowable costs), you might owe CGT:

If the property was ever your main home, you might reduce the gain with Private Residence Relief.

National Insurance Contributions (NICs)

If property letting is your main source of income (rather than a sideline), HMRC might classify you as running a business, which could mean paying Class 2 NICs. 

Avoid common pitfalls

❌ Forgetting deposit protection: Not registering your tenant’s deposit within 30 days can lead to serious financial penalties (up to three times the deposit amount) and restrict your right to serve certain notices.

❌ Skipping proper referencing: If you skip credit checks or references, you might end up with a non-paying or disruptive tenant. A thorough screening process is crucial.

❌ Overlooking the need for an HMO/Selective license: Even if you’re renting to only three or four unrelated individuals in some areas, you might need a license. Always confirm with your council.

❌ Poor record-keeping: Sloppy bookkeeping can cost you come tax time, leaving you scrambling for receipts or missing out on legitimate deductions.

❌ Ignoring maintenance: Small issues left unresolved can worsen over time, resulting in expensive fixes and unhappy tenants.

Bonus tip: How to handle rent arrears or evictions

Sometimes, despite thorough referencing, tenants fall into financial difficulty or choose not to pay. If that happens:

❗Warning: Never attempt a DIY eviction by changing locks or removing their belongings yourself. That’s illegal and can lead to criminal charges.

Final thoughts

Becoming a landlord in the UK can provide a stable source of passive (or semi-passive) income and a chance to grow your capital as property values potentially rise. 

However, you must approach it like a business, meaning you stay on top of finances, regulations, and tenant relationships.

🏠 How Can ANNA Help Landlords?

If you’re a landlord in the UK, ANNA offers a complete package to simplify your finances, reduce your tax bill, and help you stay compliant – especially if you register as a limited company.

✅ Register as a Limited Company for free

Setting up a limited company for your rental property can be more tax-efficient. 

Instead of paying income tax, you’ll pay Corporation Tax (currently 25%), which could save you money – particularly if you’re in the 40% income tax bracket.

✅ Tax efficiency and protection

As a landlord operating through a limited company, you can:

✅ One-stop tax management

With ANNA’s +Taxes service, you can:

✅ Full landlord support with NRLA

When you register your limited company with ANNA, you’ll also receive free membership to the NRLA (worth £99) – the UK’s leading organisation for private residential landlords.

This gives you access to professional guidance, legal resources, and tools to stay compliant with changing legislation.

✅ Built for landlords

ANNA understands that landlords often have multiple income streams, not just rent. That’s why the platform offers flexible tools to manage accounting, tax, and admin for all aspects of your finances.

🚀 Ready to make your rental business smarter?

Sign up today and open a business account in under 10 minutes and get full support from ANNA and NRLA.