Buy to Let

You have been tempted by the option of a Buy-to-let investment? Well this form of property investment has become increasingly popular for many people like you although the current economic situation may mean this has now to be seen as a longer term investment than the buy, rent, sell and make a quick profit scheme that existed not too long ago!

Your Team at Brown Turner Ross has dealt with hundreds of buy-to-let purchases and sales and can help you through the whole process as well as advising you on any problems that may subsequently arise between you as a Landlord and your Tenant.

Things to bear in mind

  • Buy-to-let mortgages are different from ordinary mortgages with there being three or four lenders who dominate the market
  • But most main stream Lenders will also lend for buy-to-let and often offer better rates
  • the anticipated yield and the likelihood of good capital growth. The “yield” is the annual return from rental income less expenses expressed as a percentage of the capital value of the property
  • think about buy-to-let in areas where there is high demand for rented accommodation. University Towns as well as all the big Cities are the obvious places
  • try and buy property in an area you know
  • if you do buy elsewhere find a Property Manager who knows the area and who can advise you on how easy it will be to let the property you are looking at, rental levels and capital growth
  • self-management is not sensible unless you actually live very close to the property
  • remember maintenance and repair costs when calculating yield
  • you need to know about Tenancy Deposit protection Schemes
  • take your time! Even if you are borrowing very little of the purchase price it is still a big investment and it could take time to give you a return

Tenancy Deposit Protection Schemes

If you become a Private Landlord you must lodge your Tenant’s deposits with a Tenancy Deposit Protection Scheme. This applies to any Assured Shorthold Tenancy Agreements signed or renewed since April 6th 2007. There are three Schemes authorised by the Government:

  • the only Custodial Deposit Scheme, which means you pay the deposit into the Scheme run by Computershare Investor Services plc
  • two Insurance based Deposit Schemes, where you retain the deposit but pays an Insurance premium to the Scheme Operators instead. These are the Dispute Service Limited, which is aimed primarily at Letting Agents and Tenancy Deposit Solutions Limited which is sponsored by the National Landlords Association and is aimed at Landlords

You should also note that

  • it is also compulsory for you as the Landlord to notify the Tenant within 14 days of the deposit being paid and which scheme the deposit has been lodged with
  • failure to register deposits with one of the authorised Schemes means that the Tenant can apply for a Court Order requiring the deposit to be lodged with a Scheme, or for the Landlord to notify them which Scheme has been used. The Court also has the power to order the Landlord to pay the Tenant a fine of up to three times the amount of the deposit

Last but not least ensure you use an experienced Solicitor. We have helped numerous Clients with their buy-to-let sales and purchases and are only a phone call away from helping you with yours!