Setting Rent Levels
There are no rules about setting a rent level for your property however you should bear in mind other rent levels in the area to ensure you do not price yourself out of the market. It may also be worth considering local housing allowance (housing benefit) rates as the rates may determine its affordability to a tenant. More information can be found by visiting the Ceredigion Housing Options page.
In line with the Rent Smart Wales Code of Practice, landlords must provide tenants with information on the rent amount and payment arrangements, and how and when the rent will be reviewed. This information should be included in the tenancy agreement.
Landlords can only increase the rent of a fixed-term tenancy if the tenant agrees through a term in the contract. If they do not agree, it can only be increased when the fixed-term ends and you will still need to give them notice.
If the tenancy is a periodic tenancy (rolling on a month-by-month basis) the agreement should say how often the rent will be reviewed. Both parties can agree a rent increase for a periodic tenancy at any time and should confirm the increase in writing. Landlords cannot normally increase the rent more than once a year without the tenant's agreement.
In addition to the rent, landlords may have other fees they wish to charge the tenant. The new Renting Homes (Fees etc.)(Wales) Act 2019 restricts these to a permitted list.
You can charge a tenant the following permitted fees;
- Rent (but must not fluctuate throughout the term)
- Security deposit (must be held in authorised scheme)
- Holding deposit (max 1 week rent and must be repaid to the tenant later)
- Council tax (but only to the value of the bill)
- Utilities and communication bills (but only to the value of the bill)
- Certain payments in default of the contract, which will be set out by other statutory regulations. (Currently changing locks, new keys and interest on late rent payments)
All other charges such as check in fees, or a fee for renewal or amendment of tenancy are classed as prohibited payments and are no longer legal. You could be fined if you charge a prohibited payment. You will also be unable to issue a section 21 notice for possession of the property if you have taken a prohibited payment, and not repaid it.
If you let a property, you will usually be charged Income Tax on the rent you receive. The amount of tax you have to pay is determined by how much profit you earn and what your other income is less your personal tax allowance.
If you rent out a room in your home you may fall under the 'Rent a Room' scheme, which allows you to earn up to £4250 tax free.
For detailed information you should speak to an accountant or visit HM Revenue and Customs.
Assistance with Renovations
Ceredigion County Council have various schemes that can assist, by way of a loan or grant, with energy efficiency measures, repair and renovations, bringing empty properties back into use or disabled adaptations. For more information you can visit the Financial Assistance pages.