As returns on bank deposits and annuities rates remain dismally low, many people are turning towards property investment, becoming buy-to-let landlords, perhaps to fund their retirement or provide for their children’s future. With home ownership falling to 66 per cent in the UK, the growth in the rental market may seem like an attractive prospect.
However, becoming a landlord is not just a simple matter of collecting rent. Before a property can be rented out, it has to satisfy the standards of health and safety regulations. Landlords are required by law to ensure that domestic appliances such as boilers, heaters and gas fires are regularly tested and have to produce documents proving compliance with regulations, with severe penalties for non-compliance.
A key concern for most landlords is how to find regular and reliable tenants to maximise the rental return. This fear is echoed by mortgage lenders who are increasingly cautious about lending to inexperienced buy-to-let landlords. When purchasing a leasehold property for buy-to-let, additional costs of ground rents, service charges and building maintenance also need to be factored in when calculating the return and setting the rental rate.
The onus is on the landlord, perhaps with support from a reliable letting agent, to:
- draw up the tenancy agreement;
- prepare inventories of furnishing, fixtures and fittings;
- manage the property and the letting through to recovering possession when it ends;
- keep under review the legal rules and obligations relating to residential lettings.
It is compulsory for private landlords to hold their tenant’s deposits with a tenancy deposit scheme and there are various schemes to choose from.
With much at stake, buy-to-let landlords can benefit from experienced property solicitors familiar with the different regulatory, mortgage and insurance requirements for buy-to-let properties. At DMP we have extensive experience of working with landlords and tenants, lenders, insurers and the Land Registry on buy-to-let acquisitions and on any problems with tenants which may arise, such as recovery of rent and/or possession of the property. August 2015
Our key contacts at DMP for further advice and assistance on buy-to-let purchases are:
Sallie Fenty, Associate
Keith Why, Conveyancing Executive
main office: 0118 939 3999
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.comments powered by Disqus