A London Landlord’s Guide to Subletting

March 20, 2020

The rise of holiday homes in the UK has led to an increased focus on subletting. Yet, it’s something that was around long before Airbnb and similar offerings. This is especially true in London, where subletting is particularly prevalent in an environment where rents are higher than the rest of the country.

If you’re a landlord in England’s capital, the chances are that you want to familiarise yourself with the world of subletting — especially if the current tenant is allowed to sublet at times throughout the year. There is also the legal aspect to understand.

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Whether you’re new to the world of subletting or not, we have put together this comprehensive guide that looks at sublets in London. Read on, and discover everything you need to know in our London landlord’s guide to subletting.


What is subletting?

Many landlords are often left unclear as to what is involved with subletting. Essentially, it means letting out your property while you live somewhere else — or the current occupier lets the property out while they are in a different location.

All typical buy-to-lets in the UK are a form of subletting, as the landlord lets the property while they reside at a different address. However, subletting in its purest form takes on a different role for most, and often relates to when the current tenant lets the property to someone else or lets other rooms in the property.

Tenants need permission before they can sublet a rented property. Under many leases, including Assured Shorthold Tenancy (AST), subletting often comes with specific stipulations that are set out by the landlord. In some cases, landlords aren’t happy for tenants to sublet, and so they state this in the AST.


Different types of subletting

The primary type of subletting is when a tenant lets the property to someone else. Subletting takes on different forms, however.

Subletting rooms

In some cases, the landlord might let a multiple-bedroom property to one tenant. That tenant is then tasked with finding occupants for the property and essentially sublets the spare rooms. The extra tenants aren’t on the same lease and pay the initial tenant, who then transfers the money to the landlord. Such a scenario often falls under houses in multiple occupations.

Subletting the entire property

A tenant who lets from a landlord and then relets the entire property is subletting. Tenants often do this when they know the property will be empty for a sustained period. This type of subletting has increased in popularity over the years thanks to the rise of holiday home platforms.

Subletting to a company

Many landlords want to mitigate the stresses that can come with letting, whether it’s subletting or a more traditional type. As a result, they let their property to a professional company. That company then finds tenants via subletting. Essentially, the company acts as the head tenant to the landlord but has permission to let the property to other tenants.


What does my lease say about subletting?

If you live in a flat, there’s every chance that you will have a leasehold. A leasehold will layout stipulations from the freeholder that concern what occupants can and can’t do. This includes trivial actions such as saying you can’t hang washing on the balcony to more fundamental rules around subletting.

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New-build apartments tend to come with updated clauses surrounding subletting, though older buildings often don’t include any mention as renting wasn’t as popular when these leases were first drawn up (some leases in London are almost 100 years old). However, it’s rare for leaseholds to state that subletting isn’t allowed.

Much like different leaseholds, local council rules and regulations about renting and subletting change from borough to borough. For example, some might charge a small fee (often no more than £50) to allow you to let your home. However, this is mostly in relation to letting a property that was previously owned by the council.


Subletting with an Assured Shorthold Tenancy

All the stipulations between the landlord and tenant should be set out in advance — this is the key to any successful let. That way, there shouldn’t be any nasty surprises or unrealistic expectations during the agreement of the lease. Landlords can choose whether or not to include rules that relate to subletting in the initial contract between the two parties.

Some landlords will state that tenants are unable to sublet the property under any circumstances, while others will include specific conditions — eg, the tenant is only allowed to sublet for a set amount of days per year. Having a defined stipulation is vital so that there is no misunderstanding between the landlord and the tenant.


Tenants’ right to sublet

Tenants typically need to get their landlord’s permission before subletting a property. If they do so without receiving consent, they are liable for legal action from the landlord and can lose their tenants’ rights. In the worst-case scenario, a landlord can take action to evict the tenant.

However, landlords can’t unreasonably refuse a tenant’s request to sublet if the lease states they need approval. Any landlord who denies a tenant of the right to sublet in this scenario must provide a valid reason for doing so. If there is no mention whatsoever about subletting in the contract, the tenant has the right to sublet the property without asking for the landlord’s permission.

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There is a scenario where a landlord can refuse a request for subletting without providing a reason. If the contract is a periodic tenancy (month-to-month), the landlord can reject any request for subletting without having to provide a valid reason.


Why do tenants sublet?

There are many reasons why a tenant might want to sublet their landlord’s property. Some are financially driven, while other reasons include unforeseen circumstances that can change living arrangements.

  • Travel – tenants might travel for work, which means the property will be empty at times during the year.
  • Extra money – rents in London are more expensive than any other part of the UK. Subletting can help relieve the burden of high monthly rental payments.
  • Circumstances – a tenant’s circumstances might change during a tenancy: eg, they moved into a two-bed flat with another person, but the second tenant moved out, and they need someone else to help cover the rental payments.


How long can you sublet for?

How long a landlord or tenant can sublet for is entirely dependant on the terms of the rental contract or leasehold. Some leaseholds state that owners can’t sublet their property for more than 90 days in each calendar year.

Tenants who want to sublet will need to define the length with their landlord, who can determine how long subletting lasts. Landlords who are happy for tenants to sublet won’t define a period of time in most circumstances, especially if the tenant is acting on their behalf and letting other rooms in the property.


Should landlords allow subletting?

Subletting can be an attractive proposition, especially as it provides the chance to earn extra money — whether letting other rooms or the tenants give their landlord a percentage of a sublet. However, landlords need to be sure that everything is in order. Before subletting, landlords should always check the following:

  • Check the leasehold to see if subletting is permitted
  • Make sure the freeholder grants permission
  • Make stipulations around subletting clear in any contract between the landlord and tenant
  • Vet tenants properly to make sure they are trustworthy


What are a landlord’s alternatives to subletting?

Outside of a typical sublet, London-based landlords may choose to work with a real estate company like Blueground. More than a property management company, Blueground takes care of the furnishing, marketing, subletting and tenant relations for your flat.

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We make letting easier for landlords by finding highly-qualified renters and managing your property in the long run from three to five years plus. Best of all, you receive monthly rental income at the market rate while we take care of sourcing top business executives and expats looking for a stylish, furnished home.

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