Annexes are typically unique, charming spaces with the potential for a range of different uses and purposes, but have you ever considered renting yours out?
Let’s take a look at how you can rent out your annexe, the advantages of doing so, and the key considerations you need to make as a landlord.
Contact your local Martin & Co branch today for expert lettings advice and guidance.
What is an annexe?
An annexe is a separate, self-contained living space that is located on the land of a main property. They typically contain their own living area, kitchen, bathroom, and bedroom, making them a fully independent dwelling.
Related: What is an annexe and can it add value?
Can you rent out your annexe?
Yes, you can rent out your annexe to create an additional source of income. However, you may need to obtain planning permission to do so. Therefore, it’s important to verify with your local council whether or not this is the case in your situation.
Your annexe will need to meet the requirements of a rental property, including health and safety regulations, energy performance regulations, and general living standards.
Related: Three ways your home can earn its keep
Material change of use
If your annexe is newly built or has never been used as an independent living space, you may need to apply for a material change of use. This is a form of authorisation from your local council that will allow you to change the use of your annexe from an extension of your main property to a fully independent dwelling. If you fail to obtain the necessary authorisation from your local council, you may face legal repercussions.
Insurance and tenancy agreements
Once you have obtained permission from the council to rent out your annexe, it’s important to make sure you have an appropriate insurance policy in place which covers buildings insurance, rent guarantee insurance, and liability insurance. It’s crucial to consult an insurance advisor to discuss your specific needs and ensure you are fully covered.
You also need to make sure you have a solid tenancy agreement in place to make sure both you and your tenants understand the rights and responsibilities of both parties. This should be done with the assistance of a trusted letting agent who understands your unique situation and uses their expertise to create an agreement that not only protects your interests as a landlord, but also provides tenants with a clear understanding of their obligations.
Related: The Renter’s (Reform) Bill is over: What now?
Advantages of renting out your annexe
Additional income
Renting out an annexe provides a steady stream of extra income. This can help with mortgage payments and maintenance costs or contribute to savings and investments.
Maximising property use
An annexe that may otherwise remain unused can be transformed into a valuable asset, providing a practical use for existing space.
Increased property value
A property with a rentable annexe can be more attractive to potential buyers. It can therefore increase its market value and making it easier to sell in the future.
Related: Why two-thirds of landlords are considering switching to a managed let
Considerations when renting out your annexe
Initial upfront costs
Converting or preparing the annexe for rental may require upfront expenses for renovations, furnishings, and safety upgrades.
Legal requirements
As a landlord, you must adhere to legal obligations and regulations, including gas safety checks, electrical safety inspections, and obtaining the appropriate planning permissions if needed. Failure to comply with these regulations could lead to financial and legal repercussions.
Insurance costs
Annexes often require specific insurance policies, which could make it difficult to find a provider willing to offer favourable terms.
