Posts Tagged ‘Buy-to-let’

Revenge is not so sweet – new law bans ‘revenge evictions’

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By Rachel Haymes, head of conveyancing at Ratio Law

Over the last year or so, there has been growing pressure on the government to protect tenants in rented properties from so-called ‘revenge evictions’. And now, after much discussion and lobbying, a law has been passed by the House of Lords to put a stop to them.

But what was the problem in the first place? In November 2014, Citizens Advice revealed one in three private rented properties in England failed to meet the government’s decent home minimum standard. It reported a 14 per cent increase in people asking for help with repairs and maintenance problems between July and September 2014, compared to the same period for the previous year.

There have been a number of cases identified by Citizens Advice where renters who had complained about repairs, damage, damp and other issues found themselves facing eviction for no apparent reason. In fact, the charity’s Advice Trends report revealed a 15 per cent increase in the number of cases where people were harassed or illegally evicted by landlords.

According to the homeless charity Shelter, in 2014 200,000 people faced eviction because they had asked their landlord to fix a problem in their home. The charity campaigned heavily to fight revenge evictions, calling on people to sign a petition to demand better rights for renters.

The worry from some campaigners was that rogue landlords may take advantage of a ‘loop hole’ in the law. Previously, Section 21 of the Housing Act 1988 enabled landlords to apply for a court order requiring tenants to vacate, without providing specific reasons. Now, under the new law, which was passed as part of the Deregulation Bill, it will no longer be possible to evict tenants by relying upon the a Section 21 notice procedure following a complaint about the condition of their home. The courts will now strike out any application to evict in such cases.

For the majority of landlords who look after their properties and tenants, this change will be nothing to worry about. To help protect themselves, landlords should clearly outline how they go about repairs and maintenance in their properties in their contracts and make sure this is pointed out to their tenants on signing the paper work. It’s also important to keep a record of any problems reported by tenants, along with how these were resolved.

If you are a landlord and you have any concerns about how the law affects you, contact Ratio Law.

Buy-to-let: An easy money-maker?

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By Rachel Haymes, head of conveyancing at Ratio Law

Since 6 April 2015, people aged 55 and over have been able to access as much of their savings from their defined contributions pensions as they want. The new pension freedom reforms mean people can now take a lump sum payment and there are estimates that more than one in ten intends on cashing in their entire pension pot, with 16 per cent planning on reinvesting the cash into property.

Property may seem like a safe investment and an easy way to make money, but there are a number of points to consider. Firstly, it’s been suggested that many people fail to think about the costs associated with renting out properties. A recent study estimates that when you add up all the costs such as maintenance and repairs, marketing, mortgage interest and letting agent fees, you’re looking at an average of £8,359 a year – a figure which will make a serious dent in most buy-to-let landlords’ profits.

And the financial considerations don’t stop there. There are significant tax and financial consequences for people cashing in their pensions to become a buy-to-let landlord and you should also consider taking financial advice if you will need amortgage to fund the purchase. There have been reports of some mortgage lenders offering anyone up to the age of 70 a 35-year-old loan – meaning they wouldn’t pay it off until they were 105-years-old!

Secondly, landlords have a lot of legal responsibilities – and these are changing all the time. Adhering to the Energy Act 2011, ensuring properties meet new safety legislation and making sure you treat tenants fairly and legally [insert link to revenge evictions blog] are just some of the points landlords need to consider.

Despite the potential drawbacks, the life of an ‘amateur’ landlord is appealing to many. In July last year, the National Landlords Association released figures which showed part-time landlords made up more than 70 per cent of the sector – its highest ever level.

Like with any business venture and investment, if you research the market well, understand your legal obligations, appreciate you will have to invest time and money in making it a success and have professional help at hand to provide reliable and trustworthy advice, then it can be a profitable venture. But remember – house prices can fall and interest rates can rise, so investing in buy-to-let is never a completely safe bet.

If you’re considering becoming a buy-to-let landlord and want some advice, contact Ratio Law.

Top Tips for Buy-To-Let Investors

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For serial ‘buy-to-letters’ and prospective investors alike, there’s a great deal of buzz at the moment about pinpointing, precisely, the best time to buy. The market appears to paint a rosy picture, with rents at an all time high and 40,000 mortgages advanced to buy-to-let investors in the period April – June 2013 (the highest levels of any quarter since 2008).

However, ‘when’ shouldn’t be the only consideration when buying an investment property; as buy-to-let dreams can easily go sour.

Who is your ideal tenant?

The first thing to consider as a first time buy-to-let investor, is who you want as your tenant. This decision will naturally be based upon a number of different factors including your budget, whether you want to be a hands-on landlord and if you choose to invest locally or further afield.

For example: are you happy with high rent/high turnover tenants? If so, a student house may suit your requirements. Do you want the stability of longer term tenants, and will you consider accepting a slightly lower rent? If so, you may wish to consider a property in a town or village location near to good schools that will attract families.

Location, location, location…

Once you’ve thought about your ideal tenant, you need to research location. It’s a cliché, but it really is key – and that’s especially true for rental properties. That said, once you know what sort of tenant you want, it shouldn’t be too difficult to find the right location.

Don’t overlook the obvious things though. Students will probably be more interested in location (near to their university, or if there’s a dedicated ‘student’ area that’s a couple of miles from the university – near to good transport links) than interior design.

Families, on the other hand, may want a garden as well as space to park. They will probably also expect good central heating, new carpets and a nice bathroom.

Of course, cosmetic details can be changed, new carpets laid, and bathrooms installed – but these things all cost money. Which leads me nicely to…


You should always have a budget in mind, which includes a slush fund for unexpected extras. These can range from a broken boiler, paying for a gardener if the property is empty for a period of time, through to redecoration between tenants and even replacing windows and doors.

In addition, you’ll need to think about the cost of legal fees, searches and insurances. Your mortgage provider may require a structural survey, and last, but by no means least you could be liable for stamp duty, payable on properties over £125,000 on a sliding scale of 1 – 7%.

A word of warning

Although investment properties continue to offer an attractive investment opportunity, it’s important to ensure that you do your research properly, and take advice if you’re a first time investor.

Lord Lamont, the former Conservative chancellor recently raised concerns that the buy-to-let market is heading for collapse. Of course, the danger arises for investors who over-invest whilst interest rates are low, and who then go on to experience cash flow problems when interest rates inevitably rise.

Cash is king

The above point leads me nicely to my final word of warning: it’s absolutely vital that you have enough cash to meet your mortgage payments each month. Ideally your tenant will pay this for you, but you should still budget for months in which you have no tenant, or worse, if you find yourself with a tenant that can’t or won’t pay the rent.

Further, as most buy-to-let mortgages are provided on an interest-only basis, it’s also imperative that you save separately to meet the capital repayments on the mortgage at the end of the term.

In conclusion, buy-to-let properties can provide impressive yields, as well as longer term capital returns. However, it’s important to understand the potential pitfalls of investment, as well as the opportunities.

For more information and advice on buy-to-let property investments, or selling and buying residential property, please contact Gisella Alberici on 0161 0281, or by email: