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steve brown

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  1. Hi Despite the rental being very profitable, to pass the stress testing rules I think you would need to be achieving rent of at least £930. You might get a lower stress test if you have a 5 year product but this may be counterbalanced that as a higher rate tax payer this may also take you into more extreme stress testing. You are not far off it with a £900 rent of course so a bit of tweaking with the product might get you there. I think you would be better off reinvesting in a more profitable rental.
  2. Not all tenants would want 3 years minimum commitment, some are bound to like shorter tenancies as they might be on a temporary contract in the area or renting for a short period due to a major life change such as relocation / divorce or whatever. Should they be forced on to a 3 year tenancy? I say not. They may be more incentivised to buy if this becomes the requirement, which could drive up demand and prices and would be counter to the presumed aim. I get that a longer contract could give tenants the security against a S21 eviction which families for example might appreciate. Perhaps a better change would be to give tenants the option of opting for a 3 year tenancy but with the option for the landlord to decline this in certain circumstances, for example the intention to sell earlier than this to close the mortgage or because the landlord is living abroad / another part of the country for a fixed period after which they wish to take possession back for their own residence. I have families who rent for me that started on a 12 month AST 5 years ago which has then just rolled into a monthly AST. They've never asked to renew it. They get their confidence we won't S21 them from being told by us that we have no plans to sell up or evict them. Its a relationship that builds trust. From my point of view as a landlord, I want good tenants that stay a long time. If they are non payers or damaging the property or breaching the contract then regardless of how long the AST is I will be going for eviction. As far as I know nobody is advocating the removal of the right to remove for breaches. If on the other hand I have other no blame reasons why I need to evict the tenants, for example selling up or taking up residence in the property myself then this is something I would just work into my long term plan. S
  3. Hi Even though this is your first BTL purchase, I would like to encourage you to follow your instincts somewhat. By getting to the stage you have you are more property savvy than 99% of the population. You are fearful / doubtful about the quality of the tenant. It could well be that they haven't paid rent in months, but that being the case is it likely that they would have kept the place immaculate in the interim? Or that they would temporarily allow the landlord they are presumably in dispute with to come in and spruce it up for a days worth of viewings. I personally think that is unlikely though of course not impossible. I also think it unlikely that if the landlord was having problems with them that they would sell to shake off the problem, unless the sale was going to be very easy and make them a significant profit. Do you know how long your sellers have owned the property? Maybe if they have inherited it some time ago they will be sitting on a good profit, but otherwise it might be more trouble than its worth to sell compared with evicting their tenant. (£3 spent with the land registry will tell you when they obtained it and how much they paid) On the other hand there could be a hundred other reasons why they are selling, none of which relate to their unfortunate tenants. May I suggest that you enquire as to whether the tenants would like to remain. If they do then instruct your solicitor to request the records of the credit and character referencing work that was done on the tenants when they moved in, to include all the other associated papers for example checking their right to rent and that the deposit was properly placed with a protection scheme. Your buyer should see it as a bonus that he or she is also selling you good quality sit in tenant and therefore be keen to provide all that. If that stuff cannot be provided then seek vacant possession but by all means invite the tenants to apply to whichever agent you choose to use to let it out (make it a different one to the current one I'd suggest). If they pass the new agents referencing process then they are in the same position as any other new tenants but you have the advantage of at least knowing that on the day of their viewing it was in good order which is some intel that they may be good eggs. I have been letting a small number of properties for about 8 years. In that time I have had no nightmare scenarios. I have had one tenant who went off the rails a bit and didn't leave the place great but it was a quick clean and repaint job, no worse than that. One of my current tenants has proved to be a bit mishap prone and this has caused me a bit of work and one significant insurance claim but on the whole even that tenant has been fairly trouble free. Overall tenants are normal people looking for a quiet life, good agents with a through vetting process will generally have a good success rate at filtering out trouble. Every tenant is however something of a gamble, this is a part of the business you have to accept. Good luck! Steve
  4. Hi all, Thanks for your information and advice. I have checked the title deeds for the property I think is being sold and the one next door. They are definitely separate properties with land registry but for some reason the one being sold soon does include the number of the neighbouring one, e.g. instead of "10 High Street" it says"10-12" High Street but the entry for 12 High Street is simply "12 High Street". I suspect its a hangover from when they were connected to each other, maybe they were one entry at that time. There are some shared access covenants and covenants about the party wall as its terraced housing so probably legit and maybe some kind of quirk. Thanks all Steve
  5. Hi, I have seen a property that is coming up for auction soon. It is an end terrace. The property was previously up for auction last month as was the house next door, which I assume was the same owner. Both sold at last months auction but the end terrace has come back up for auction again. It is not yet clear why but it is a total renovation required so maybe finance issue. Or maybe to do with the deed. On some prelim work I have done there is apparently only one title deed for the end terrace and the adjacent one (which sold last month and to my knowledge has not fallen through). I am also aware that some years ago when my partner was looking for a house she viewed the property and there was a shared door between the two houses, reinforcing that it has been owned by the same person. I am assuming that steps have been taken to separate the titles of the two properties (otherwise how could they be sold individually) but it appears that land registry still has it as one property. Is there a time lag between splitting a title and it becoming clear that this is the case on LR searches? The advert for the one that has come back to market is definitely only for the end terrace, they are not describing the adjacent mid as included. The legal pack has not yet been published online and I await it eagerly. Anybody have any ideas what could be going on here? Steve
  6. Sounds like a fairly specialist area to me, have you searched for the answer online and/or sought legal advice?
  7. Sounds like a noble aim, good luck! It is very disturbing how many homeless people there are in major cities these days. I live near Leicester myself and see this there. I am aware that many publicly funded hostels were closed in the last 9 years and this has to be a factor, Leicester certainly struggled with this. Whatever brought those, often challenging, people to their situation, it is clear that there are few escape routes for them, very much a tragedy being played out on the streets. A lot of cities seem to commemorate wealthy benefactors from decades / centuries ago who helped the poor, maybe we need to find this kind of conscience again.
  8. Hi Tam I know nothing about PBSA. Why not keep your life a bit more simple and buy a straightforward BTL? Find a property - make sure its of a standard suitable to rent - get it rented out for a modest profit - treat your tenant well - repeat. You'll learn lots, and be in a better place to assess PBSA or other areas then. Steve
  9. Well done for getting started, thats what its all about, taking some action. There is loads of great learning material out there, who knows where to start first but for what it is worth I am currently reading "RESET: HOW TO RESTART YOUR LIFE AND GET F.U. MONEY: THE UNCONVENTIONAL EARLY RETIREMENT PLAN FOR MIDLIFE CAREERISTS WHO WANT TO BE HAPPY". I am only 20% through it but like a lot of these books it does provoke some thought about what you want out of life and sets some reminders about why many of us (me) are in the rut of employed work to get by. The best line in it so far is the idea of finding your meaning in life by asking yourself what problems you couldn't live without (i.e. devote yourself to these). Not heard that insight before. I would also recommend The Entrepreneur Revolution. I think there is a bit of an industry around these types of books and some regurgitation of material but despite this I do tend to get one or two nuggets out of them so what harm can they do? Kindle Unlimited gives access to a wide library for £7.99 a month - thats pretty good if you use it.
  10. The podcasts produced by the people that run this forum are very informative and you would do well to start there. Steve
  11. Hi folks, We are looking to move residential property. I was initially very hopeful that I could use a BTL mortgage on our current house to keep it on as a rental and purchase the new house using existing cash for a deposit. It looks as though the stress test rules will prevent this however as an individual. The cash flow however would be positive and in my view with plenty of breathing space for interest rate increase. I am exploring whether the stress test would be easier to pass if I formed a limited company to buy our house. I wasn't going to do this previously as we don't have enough properties in our portfolio to warrant this but I would consider it as a means to an end to avoid selling the house as I think if there is a chance to keep it on as a rental then I would like to. I know that the company would have to pay stamp duty but then we would have done so at the higher rate as individuals anyway. I daresay the mortgage rates will be higher too (waiting to hear from the broker) but does anyone know what the other costs are like compared to a private individual, e.g. legal costs / arrangement fees etc? Also has anyone else had experience of this sort of process to avoid selling a house with the potential to rent? Steve
  12. Hi all, A friend of mine is looking at a deal which we've been discussing. It is a 2 bed terraced house in a good location, with a typical terraced house garden. straightforward so far. However at the end of the garden it leads out into a 10 metre by 10 metre plot which forms part of the same property. This is currently an overgrown area that has previously been used for car storage, repairs and general storage. It is apparently an Aladin's cave of bric a brac but that is by the by. The 10x10 plot would be big enough and ideally placed to tidy up and rent out parking spaces to the neighbours - parking is very limited in the area as there is likely to be good update. He would be buying using mortgage. I have suggested that during the sale process he should consider getting the land split in two as I imagine that mortgage companies would be reluctant to have a BTL and a commercial use on the same property and therefore the same risk. By splitting it he may also be able to buy the 10 x 10 plot for cash and just get mortgage on the house itself. Does anyone have any experience of a plot of this type and of how mortgage companies view them or what restrictions if any they place on them? Thank you Steve
  13. Hi I currently have an offer accepted on a house that we will rent out. After our initial offer was agreed the survey indicated a problem with the roof and only agreed to mortgage up to a slightly lower amount (difference of £2500). The vendors agreed to reduce the price by that amount however as the survey was quite vague I arranged for a roofer to inspect and advise what is needed. It appears that the problem is quite extensive and long story cut short the cost of repair will be closer to the region of £6000 (the whole roof will be removed and the rafters replaced and the purlins replaced and remounted. I think that the vendor is likely to accept an extra reduction however in terms of my own cash flow I don't think I will be able to find the extra cash for the new value of the repair. We are buying with a mortgage at 75% so even if the sale price is reduced by £4000 this only release me an extra £1000. So my question is whether it is possible / permissible to have a scenario where an asking price remains the purchase price but the contract stipulates cash back to the buyer to an agreed amount - in this case £4000. So the mortgage company would have lent the money and I get some back to allow me to do the work. My only other alternatives will be to borrow from elsewhere to get the work done, which was not in my plan or to offer a severely reduced amount so that the reduction is big enough to leave me with the full extra £4000 in my pocket for the works. I might get away with that of course but it would be a significant reduction in the asking price as its only a 2 bed terrace so they may not fancy that. And of course option 3 is abandon the purchase. The vendors are not willing to get the work done themselves before selling. Thanks for your advice, Steve
  14. My advice to you would be don't wait until you think you know it all, learn a bit about the stages then crack on, learning as you go. Its really not that hard if you think, test your numbers and think long term. Good luck Steve
  15. Experience of doing it has got to be the key. I as yet have not been brave enough to take the plunge on a flip as not got the cash to be comfortable, but I think when you have done one you will just roll on and on with them because you will know the script better. Good luck and be interested to hear about your progress. Steve