Is subletting on the up?
Ed Mead, Chief Executive at Viewber explains more about subletting, and how Viewber can carry out tenant verification services on behalf of landlords.
It’s a question we’ve been pondering here at Viewber HQ.
Our work with property managers, private landlords, local authorities and housing associations often involves tenant verification and occupancy checks.
Viewbers are requested to visit properties and meet tenants to ensure who is living in the property has the legal right to be there and to spot signs of over or under occupancy.
While we don’t always hear the end result of our checks, we do know that our tenancy verification services are growing in popularity – and we expect demand to keep rising. Why?
Almost certainly, that reason is the lack of homes available for renters. Rents in the private sector are at record levels, the supply of new properties to let is low, demand from renters is as strong as ever and existing tenants are unable to buy a property due to high mortgage rates.
Given this, it’s not surprising that rent to rent is becoming increasingly popular.
Under a rent to rent arrangement, a tenant (the rent-to-renter) rents a large property off the property owner, and then lets the property out to several people. The idea is that the income gained from multiple occupants yields a profit above the rent paid to the original owner.
Where the rent to renter understands their obligations this can work well for both landlord and tenants, but where the rent-to-renter does not understand their obligations this can create a number of legal problems for the landlord.
Usually, these legal problems stem from accidentally creating a house in multiple occupation (HMO), potentially leading to licensing, or the original landlord is not aware that the property will be sublet. Subletting can also involve the property being listed on holiday and short let sites, such as Airbnb.
Subletting is not an issue exclusively confined to the private rental sector. Some council and social housing tenants can – and do – exploit their lower-than-market-value rents and the shortage of properties for their own financial gain.
One case that made the trade press earlier this year involved a council tenant who moved out of her property and sublet it to a family for £900 per month.
Concerns about whether the named tenant was actually living in the property were raised by a contractor, who noted it was a family in situ and not a single person.
What followed was a three-year resource heavy investigation by Haringey Council to bring the case to a two-day trial at Highbury Corner Magistrates Court.
This followed news that a local authority property in Kensington was successfully recovered after being illegally sublet for almost 13 years, after the original tenant moved abroad. It capped a pivotal week for Kensington & Chelsea local authority, which recovered four sublet properties in just one week in 2022.
With rental costs at an all-time high and a cost-of-living crisis rumbling on, some tenants may see an opening to make money by subletting a property they rent from a private, social or council landlord.
Without regular inspections and tenant verifications, a subletting black market can easily develop.
As usual, well managed properties will avoid the worst of this happening – but despite the article, subletting, if managed correctly, can provide extra housing. Keep an eye on your properties.
There are a number of classic tell-tale signs that a property is being sublet but there are some other red flags too. These include:
• name on utility bills does not match with the ID that the tenant provides
• far more ‘phone chargers than unauthorised tenants
• A key safe being installed
• Overflowing recycling boxes
• Increased gas, electricity and water consumption in ‘bills included’ rentals
• Contact from people not listed on the tenancy agreement made via social media
• Different people frequently arriving and leaving with suitcases
• Locks fitted on internal doors
• A kettle, camping stove or other cooking equipment in bedrooms
• The given property appearing on Airbnb, Vrbo or other holiday let sites
• Sofas made up as beds
Viewber offers a full range of tenant verification services, which include looking for signs of subletting.
A locally-based Viewber can be booked to visit a property, speak to the current occupier, conduct a verification process and report back. They will note whether names on paperwork match, whether more people are present in the property than on the tenancy agreement and note down if there is anything suspicious.
A Viewber can also conduct welfare and property abandonment checks, as well as serve documents.
Our service operates on a nationwide basis, seven days a week, which is useful when tenants have restricted availability. A Viewber can also collect a key from a designated office, let themselves in and return the key once the assignment is complete – perfect for when hours at your desk really matter.
Get in touch to learn more about our services.