Elaine Tottie
Licensed Conveyancer
Phone: 01423 564551
Email: et@powell-eddison.co.uk
Residential Conveyancing Harrogate - Buy to Let properties
What are the considerations when buying a property to rent out?
If you are looking to become a landlord with the purchase of a property you intend to rent out, there are a number of things you should consider.
Firstly, what location are you going to buy in? Ensure you take a look at where you will get the maximum return each month, as some areas have a higher rent value than others. Also, are you planning on carrying out the maintenance of the property yourself? If so, you may want to consider buying a property close to your main place of residence.
Secondly, what type of tenant are you looking for? There are many types of tenants from families to students. Each group of potential tenants have different needs to the other. Because of this, it is important to factor in your target audience when looking at locations and property types.
Finally, finances. How much can you afford to spend on a property? It is vital when you purchase a property and apply for a buy-to-let mortgage that you have something leftover ‘for a rainy day’. What rental rate are you looking for? When considering the rent you are looking to charge, it’s a good idea to see how much other landlords and agencies are charging in the area. You will need to ensure that your mortgage and any other costs (e.g insurance) are covered to make a buy-to-let viable. It is also important to remember that every day you don’t have a tenant, the property is costing you money.
If you are looking at buying a new property to rent out, Powell Eddison are experts in residential conveyancing. Call us today for a free initial consultation with our conveyancing solicitor team.
Contact our licensed conveyancing solicitors by calling our Harrogate law firm on 01423 564551or Leeds law firm on 0113 200 7480. We are ready to help you when buying a new home.
What are your responsibilities as a landlord?
Being a landlord requires you to have certain legal responsibilities. Your tenants must be assured that their right to live in your property is protected by a legally binding tenancy agreement/contract and that their deposit is correctly secured.
The most popular is an Assured Shorthold Tenancy (AST). This agreement gives the tenants of your property the legal right to live in the property for a fixed duration or rolling term (normally 6-12 months). It will also detail how much rent is required by the tenant during that time, confirm who is responsible for repairs, if and/or when rent can be increased, how long the tenancy lasts, eviction clauses and the tenant's right to have their deposit protected.
Deposit protection schemes are a legal requirement in the UK. If either yourself or your letting agent doesn’t provide one, it is likely you will be fined. There are 2 types of government-backed deposit schemes, insurance and custodial.
Insurance scheme: the landlord or agent holds the deposit and pays interest to the insurer. These are available through the Deposit Protection Service, MyDeposits and Tenancy Deposit Scheme.
Custodial option: where the rental deposit is paid directly into the deposit protection scheme, which is free-of-charge. Each scheme comes with an independent resolution service to iron out problems between landlords and tenants should they arise.
Other landlord responsibilities include:
Ensuring a safe property for tenants to live in
Dealing with property structure and exterior repairs
Making sure that the gas and electrics are certified safe
Maintaining the heating and water systems
Making sure fire safety regulations in any furniture or fittings are correct
Providing certain paperwork required by law
Buying a new home process
The average transaction can take between 8-12 weeks This timeframe can be extended or shortened depending on a number of different reasons.
When buying a new home, you will usually find that the seller is also buying another property, The number of buyers and sellers buying and selling properties simultaneously is known as a Chain.
Everyone in a chain needs to exchange contracts and complete their property purchases/sales at the same time. If each party are working to a different timescale, it could mean that your transaction may take longer than the average 8-12 weeks.
In order to complete the sale or purchase, the chain must remain intact. If one party withdraws, the chain can completely collapse and everyone will have to start again.
After this process has been completed, you will be able to finalise any agreements with a tenant you have so that they can move in, or you can begin to advertise the property being available to rent.
Stamp Duty Costs
In England, it is very likely that when buying a new home, you will need to pay stamp duty land tax (often called just stamp duty) on your property purchase. This tax normally adds a few thousand pounds to your purchasing costs, so it is vital you factor this additional cost in.
In England, ordinarily, stamp duty is charged in the below bands:
Property Value Stamp Duty rate
£0-£125,000 0%
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,001 - £1.5m 10%
However, for a buy-to-let property, it is important to understand that you’ll need to pay a higher rate of Stamp Duty Land Tax on properties you intend to rent out in England and Northern Ireland.
The UK government have provided this online stamp duty calculator, to allow you to find out how much you should expect to spend when you buy a property to rent.
In Wales and Scotland, the rules differ from the costs in England.
In Wales, the tax is called Land Transition Tax (LTT). This LLT calculator (Wales) can help you understand the additional costs involved.
In Scotland, it's called Land and Buildings Transition Tax (LBTT). This LBTT calculator can help you understand the additional costs involved.
Powell Eddisons' Conveyancing Services Harrogate
When you have an offer accepted on a property you plan on renting out, both the buying and the selling processes (commonly known as conveyancing) can begin working towards a completion date. It is at this point you should look to secure the legal services of buy to let solicitors.
It is likely that you will need to regularly visit your buy to let solicitors in person to hand over important documents. We advise finding one local to your current location to make this process easier - Avery Walters residential buy to let solicitors offer conveyancing services and have offices in both Leeds and Harrogate, so we can help you across a large area of Yorkshire and the North of England.
When acting as your buy to let solicitors, we will ensure that all necessary legal paperwork is created and filed correctly to ensure that you and your tenant are both covered by legally binding agreements.
When acting as your conveyancing solicitor, we will ensure that the purchase of your new property is fully legal and that no nasty surprises pop up for you in the chain process.
During the buying process, Powell Eddison's conveyancing services will help to manage your involvement in the chain, ensuring that everything happens as quickly as possible. Your dedicated solicitor will negotiate moving dates, exchange the contracts and transfer all the relevant money on the big day.
Contact our Residential Property Solicitors Harrogate
If you are looking at buying a new residential property to rent, Powell Eddison are residential property solicitors and offer conveyancing services to help you when purchasing your next property. Contact us today for a free initial consultation with our experienced team of buy to let solicitors.
Our buy to let solicitors can be contacted by calling our Harrogate team on 01423 564551 or Leeds residential property solicitors team on 0113 200 7480. We are ready to help you when buying a new property.
