Does a recent court decision mean a big shake up for conveyancing?

Does a recent court decision mean a big shake up for conveyancing?

Earlier this year I was writing about possible plans to change the law to prevent gazumping. If you recall the suggested change would mean bringing forward the point at which a house sale/purchase is legally binding for both parties.

Now a recent Court of Appeal decision in respect of two cases about property fraud could mean radical reform of other areas of the UK’s conveyancing procedure.

The two cases of property fraud

The two cases were brought by property developers who had been defrauded in 2013/14 by individuals who had posed as vendors of property that they didn’t in fact own.  In short, the Court of Appeal found the vendors’ solicitors liable for losses caused to the property buyers by the fraudsters, even where those advisers were not negligent.

In the first case, the fraudster claimed to live in Dubai, and the documents all came from Dubai, even though the property was in the UK.  The fraudster’s solicitors conducted the standard Anti-Money-Laundering checks which came back as ‘referred’ but the solicitors accounted for this by the fact that the client lived in Dubai.

In the second case, the seller’s solicitors admitted that they had not performed the necessary checks on their client.

Both sets of purchasers had relied on the professionals involved amongst other things to ensure that what they paid for is what they received.

Court of Appeal decision

Housing reformIn the first case, the Court of Appeal found the solicitors for the fraudster were liable and in the second case, the solicitors for the purchaser and the vendor were found liable for a breach of trust, despite the absence of any negligence on their part. The Court of Appeal added that it is the vendor’s solicitors who are in the best position to carry out appropriate checks and the purchaser’s solicitors may be reliant on them to do so.

What does this mean for us, Joe Public?

The cases were both complicated by a number of factors, but the fact remains that the Court of Appeal decision may now lead to substantial reform of our conveyancing procedures.

Both solicitors were criticised for their poor standard of identity checks and the decision underlined just how responsible and liable solicitors for a vendor are when it comes to checking their client’s identity – as opposed to the responsibility falling to the purchaser’s solicitor.

From a buyer’s perspective, the result is good news as it affords them greater protection. But at what price? Professional negligence insurance premiums will undoubtedly rise to reflect the risk.

Professional advisors will now also need to review their policies and procedures and put in place robust anti-fraud and identity check procedures but will the cost of all this just be passed on to the client? Will the whole process just grind to a halt as exhaustive checks are carried out or will solicitors just refuse to act if they’re even the slightest bit worried?

Perhaps the government will now intervene at last in a conveyancing system that is struggling under the strain and has long since been in need of a radical overhaul. Whether it’s further case law or legislation that next shapes the conveyancing landscape remains to be seen and as always, I’ll be keeping a watching brief. But surely with pressure continuing to build, reform must be within the foreseeable future.

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com

Advertisements

Thinking of making changes to your home?

Thinking of making changes to your home?

Because your future home could be very different!

Look around your home for a moment and think about how much has changed since you were a child.

home decor For those of us that are old enough, it doesn’t seem long ago that there was no such thing as a family computer or laptop! Really.

Instead, there was a free-standing TV in the corner, a telephone on a lead (often on its own table) and if you were lucky, a record or cassette player. The garden shed contained … mowers and garden tools! Not a man cave or an outside office.

If you think back a bit further, duvets were an exciting innovation that replaced sheets and blankets, central heating and double glazing were not guaranteed and for the really mature amongst us, you might have had to go outside to the WC!

Out with the old, in with the new

Things have certainly changed and on the whole, they’ve changed for the better. And Anglian Home Improvements recently did some research into how we think our homes will evolve even more in the foreseeable future.

The research unsurprisingly revealed that working from home is having a big impact and is likely to change how we use our homes and our space. At present, the majority of us don’t have our own office space even though ever increasing numbers of us spend at least some of our working week at home.

home technology 35% of those surveyed also aspire to underfloor heating and reassuringly, 29% want their homes to be more energy efficient.  Entertaining, cooking and relaxing spaces were also important considerations for those planning their homes and 50% want technologically smarter homes.

AXA Insurance have also been doing some research into what people want from their homes in the future. Again, unsurprisingly, technology ranked highly, with 27% believing we’ll all have smart TV screens in our homes to use instead of phones to contact our friends in the next 10 years.

Charging points for electric cars was another big hitter as was the belief that cars will be driverless in the foreseeable future.

Moveable space to suit your needs

With advances in artificial intelligence, my view is that the wish lists of those that took part in the surveys are actually remarkably modest.

Smart fridges and robotic hoovers are already a reality and many of us are also already controlling our heating, lights or security from our phone. Smart technology combined with a continued squeeze on space, means it’s not difficult to imagine how one room could soon become a central hub for all of a householder’s requirements (cooking, eating, entertaining and working) with smart worktops that can weigh, measure, stir and cook, and then convert into a table with in-built entertainment or a desk and a smart screen.

In fact, it’s perfectly feasible that walls and ceilings will be moveable soon too so that you can reconfigure your space throughout the day to suit your needs. And with that in mind, you have to wonder whether home decoration will soon become 3D and virtual, allowing you to change the colour of your walls at the flick of a switch (or rather, by using voice-activated technology)!

Of course with technology making such massive advances, design was always going to try and keep up! Ikea has already launched their “charging furniture” which includes tables and lamps which have integrated wireless charging points.

Other smart furniture is also already available (if currently a little expensive) including a sofa with integrated sound system and speakers, a fully interactive coffee table with integrated fridge, an intelligent mattress for sleep monitoring and anti snoring, and tables that talk!

The new Granny flat

One of the areas the AXA and Anglian Home reports didn’t touch on was the need or desire for multi-generational living, with independent Granny accommodation integrated under one roof. Of course, this is less of an innovation and more of a revival of how things used to be but it will be interesting to see if and how architects and designers incorporate this increasing necessity into our modern homes!

There’s no doubt that the need to create millions of more homes out of increasingly scarce space will result in exciting innovations that we’ve yet to imagine. Necessity can be a formidable driving force and I for one, am looking forward to my home being able to cook my dinner and tidy afterwards for me!

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com

Could rogue landlords have their properties confiscated?

Could rogue landlords have their properties confiscated?

Reform of the Private Rented Sector

Last week the Parliamentary Select Committee published their report on the state of the private rented sector (PRS), following an intensive 3-month inquiry.

It’s a significant report which made some surprising and radical recommendations.

It’s all the more important when you bear in mind that a number of key recommendations in the last such inquiry of this nature (5 years ago) were subsequently adopted by government.

Private rented sector As well as a significant increase in the size of the PRS, the report noted that for an increasing number of tenants, renting is now a long-term prospect. The report also noted concerns that according to The English Housing Survey, an estimated “800,000 private rented homes have at least one Category One hazard, such as excess cold, mould or exposed wiring, while 41% of tenants reported that they had waited an unreasonably long time for repairs that their landlord was legally required to undertake.”

The committee also found concerns about Local Authority enforcement.

The report’s conclusions and recommendations can be summarised as follows:

  1. Quality of accommodation and the balance of power

The committee expressed the view that many tenants require yet more protection from retaliatory evictions, unfair rent increases and harassment.

Despite the evidence revealing that most PRS housing is of an adequate standard, the report concluded that there “continues to be a significant minority of private rented accommodation that is shockingly inadequate.” In fact, the committee received evidence that 27% of private rented homes failed to meet the Decent Homes Standard in 2016.

The report also concluded that there remains a clear power imbalance between landlords and tenants, with tenants often unwilling to complain to landlords for fear of retaliation. The committee went on to recommend that the Government provides “additional protections from retaliatory eviction and rent increases. Protections should also be extended to prohibit retaliatory rent increases for a period after making a complaint.”

Housing reformThe committee also agreed with the Government idea of providing a specialist housing court to make redress for tenants more accessible. They further recommended that “the Ombudsman be given sufficient powers and resources to provide tenants with the support they need when challenging inadequate standards in their homes, and to require the payment of compensation to tenants when appropriate.” 

Finally, the committee recommended that consideration be given to “introducing a new Local Housing Allowance (LHA) rate for studio accommodation, to reduce the incentive for landlords to break up larger properties into much smaller ones to enable them to benefit from the higher LHA rates payable for one-bedroom properties compared to the shared accommodation rate.”

  1. Legislative powers

home safetyAs with the last report 5 years ago, the report again recommended a review of PRS legislation with consideration being given to how to achieve greater clarity for tenants, landlords and local authorities.

The committee expressed a strongly held view that the Government should “introduce a more straightforward set of quality standards for the sector, so that it is clear to everyone—not just to highly qualified professionals—whether a property meets minimum standards.”

The committee also agreed with:

– the All-Party Parliamentary Carbon Monoxide Group (APPCOG) that “legislation should be amended to make it mandatory for landlords to install carbon monoxide alarms in the rooms containing any fuel-burning appliance.”

the Electrical Safety Standards Working Group that “mandatory five-yearly checks on electrical installations should be introduced as soon as possible in the PRS.”

The committee expressed support for the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill. However, to give it more teeth they recommended that “Provision should be made for free and easily-accessible technical and legal advice to support tenants through this process.”

  1. Enforcement

The report dealt with Local Authority enforcement in some detail and concluded that councils have been inconsistent, and enforcement levels—formal or otherwise—are far too low.

The committee expressed the view that “local authorities should have the power to levy more substantial fines, which might stand a chance of breaking the business models of the worst offenders. Further, local authorities should have the power to confiscate properties from those landlords committing the most egregious offences and whose business model relies on the exploitation of vulnerable tenants. Coupled with the banning orders which came into force in April, this would act as a more powerful deterrent than the existing provisions.

  1. Selective licensing schemes

Finally, the committee concluded that decisions to implement selective licensing schemes should be made locally, where there is greater understanding of local needs and politicians are directly accountable to the electorate for their decisions.

The conclusion was that “the current process of application to the Secretary of State is not fit for purpose. Decision-making is too slow, lacks transparency, and is overly bureaucratic and unduly expensive.”

  1. Overview

For the majority of landlords, this report should be welcomed. In my experience, most landlords understand that providing their tenants with good quality accommodation and a good landlord experience is in their own interests in any event.

Anything that makes the legal and moral obligations of the relationship between landlord and tenant clearer, more easy to understand, more positive and more straightforward, has to be welcome.  Eliminating or at least reducing rogue landlords from the PRS landscape also has to be good news.

However, to what extent government decides to adopt the report’s recommendations, of course, remains to be seen. And of course, to what extent any changes (legislative or otherwise) have built-in safeguards against abuse by tenants is going to be key.

You can read the full report here and I’ll keep you posted on any developments of course.

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com

Rental statistics for the South East for Q1 2018

Rental statistics for the South East for Q1 2018

The South East Rental Market 

If you’re a landlord in the south-east (or thinking of becoming one), you’re probably keen to track the performance of rental properties, in what continues to be an era of pre-Brexit uncertainty. Particularly as we move into the second quarter of 2018.

So at EweMove, we’ve been scouring the many and varied reports and predictions to find out how the rental market has performed so far and what we can expect moving forward.

And it’s good news for landlords!

Annual rents in the UK have risen, albeit modestly, according to the latest Your Move Rental Tracker for England and Wales.

What’s more, the Royal Institution of Chartered Surveyors (in their January 2018 Residential Market Survey), reported, “that tenant demand edged up in the three months to January”. And the Association of Residential Letting Agents also reported in their Private Rented Sector Report for January that “the supply of rental properties fell by 8% from December to January while demand for these properties grew”.

It would appear that this renewed demand may now be starting to have a positive impact on rental prices here in the south-east.  Welcome news indeed following the Office for National Statistics (ONS) finding earlier this year that, “private rental prices paid by tenants in Great Britain rose by (just) 1.1% in the 12 months to February 2018; unchanged from January 2018.” and following the general media reports of gloom and doom in the autumn of last year.

Finally, Countrywide reported in late 2017 that some 64,672 tenants moved out of London last year, in order to rent elsewhere. This is the largest exodus since 2007 and represents a new trend of tenants moving out of London to rent elsewhere, rather than to buy. Countrywide estimates a quarter of households will rent privately by 2021 giving us cause to be optimistic about the future of rentals in our region.

Average rental prices 

Estimates of the average rental prices do seem to vary, but according to the Home Let Rental Index, the average rental price for the south-east is £995 pcm which remains higher than the national average. The Index also suggests that so far this year, rental prices here in the south-east have performed better than the previous two years.

The most commonly rented properties

Buy to letA report by London estate agent Foxtons found that the most commonly rented properties are 2 bedrooms (41%), 1 bedroom (23%) and studio apartments (16%). Just 6% of rental properties have 4 bedrooms.

EweMove overview

We don’t want to get overexcited about the latest predictions but it does appear to be a gradually improving picture for landlords here in the south-east and it means 2018 may well be a good year to take the plunge if you’re thinking of buying to let.

Certainly, our experience here in Dorking and the surrounding area is of a buoyant rental market and as we slowly come out of hibernation after some of the winter’s terrible weather, it’s a market that seems to be increasingly robust.

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com

Checking and vetting tenants

Checking and vetting tenants

As a landlord do you know what tenant checks you should and must carry out?

Before you rent your property to a tenant there are certain legal requirements that you have to comply with. And if you rent your property to someone who isn’t allowed to stay in England you can be fined or even sent to prison.

Who and what you have to check in law

You must check that all tenants over 18 can legally rent any residential property in England. And that means everyone, whether or not you have a written tenancy. It’s also against the law to only check people you think aren’t British citizens.

There are limited exceptions which include mobile homes, local authority accommodation, tied accommodation, 7 year + leases and student accommodation but as a private landlord, they are unlikely to apply to you.

If the tenant is only allowed to stay in the UK for a limited time, you need to do the check in the 28 day period before the start of the tenancy.

How to do a check

right to rentCheck which adults will use your property as their main home (your ‘tenants’). You will need to see the original documents that prove they are permitted to live in the UK and have a right to rent.

To the best of your ability, check each document is genuine, record the date you checked and keep copies. If you need more information about what documents this may include visit:  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/573057/6_1193_HO_NH_Right-to-Rent-Guidance.pdf

Don’t forget to check the details, rather than taking a swift glance. You need to look at photos, dates of birth, names and what condition the documents are in. Look out for inconsistencies…like dates of birth which are clearly wrong, or different names!

Also make sure you take copies of the whole document, and that means every side or page. Keep the copies for the duration of the tenancy and for one year after. But make sure you comply with any relevant data protection law.

Whether or not your property is your tenant’s main home will depend on things like how often they live there, whether they are registered with a doctor or to vote at that address.

If the tenant doesn’t have the right documents, you must use the landlord’s checking service to check whether the tenant is allowed to rent without the right documents and you’ll find that here:  https://eforms.homeoffice.gov.uk/outreach/lcs-application.ofml

You should get an answer within 2 working days.

Follow-up checks

You must also do a follow-up check to make sure your tenant can still rent property in the UK if there’s a time limit on their permission to stay. If you don’t, and your tenant’s permission to stay expires, you can be fined.

Do the follow-up check just before the date that’s the later of:

  • the end of your tenant’s permission to stay in the UK
  • 12 months after your previous check.

You don’t have to do a follow-up check if there’s no time limit on your tenant’s permission to stay in the UK.

You must tell the Home Office if you find out that your tenant can no longer legally rent property in England after doing a follow-up check.

If a tenant sub-lets the property without you knowing, they’re responsible for carrying out checks on any sub-tenants.

Good practice tenant vetting

rent collection serviceApart from the legal requirements, there are also some essential checks that need to be carried out to ensure you don’t end up with a tenant who doesn’t pay, damages the property or worse. And this vetting process needs to be rigorous – just speaking to a previous landlord and or employer is not enough anymore.

The information you will need to check or collect will include

  • payslips and bank statements (covering at least 3 months),
  • credit checks,
  • secure accountant references,
  • whether the tenant has any county court judgements (CCJs) against them,
  • whether they can provide a guarantor who will cover their rent if they default.

The social touch

Other checks you can carry out include checking social media accounts like Facebook, Twitter or LinkedIn, personal websites or just doing a Google search and see if anything comes up.

At EweMove, we visit potential tenants in their current homes when vetting and we ask lots of questions about their work, why they’re moving etc.

The success of your vetting and checks is in the detail.  Look for inaccuracies or things that don’t quite add up. There are of course professional agents who can handle all this for you and if you’d like more information please get in touch.

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com

How to avoid damage to your rental property

How to avoid damage to your rental property

Damage to rental property is an expensive problem

In October last year, I blogged about rent arrears and how to avoid them. You may recall that a survey at the time had revealed that 28% of landlords had experienced rent arrears within the previous 12 months. In fact, according to a survey by Access Legal, in 2015 rent arrears accounted for £900 million!

Whilst I don’t want to alarm you, arrears aren’t the only challenge faced by landlords, with damage to property costing them an incredible £4.5 billion a year, according to the same survey.

Of course, as a landlord, you have to expect a measure of wear and tear. But in the face of such an enormous annual cost, what are the most common areas of damage and more importantly, what can you do as a landlord to avoid them?

Common damage to rental property

The research doesn’t really reveal any great surprises and the most common damage and disputes include:

  • broken appliances
  • damage to carpets and internal decor
  • cigarette burns (even when smoking is not permitted)
  • dirty premises.

Minimising the risk of damage 

It is not possible to completely exclude the chances of damage but there is much you can do to minimise the risk!

  1. Get your property in order and be a good landlord

renting a property It may sound trite, but if you treat your tenants well and with respect, they are much more likely to reciprocate. That starts with ensuring the property is in a clean and respectable condition before they move in, with suitable, working appliances.

It also means responding fast if something goes wrong and keeping the property in good repair. After all, if the property is cold and damp, it’s going to be hard for the tenant to keep the décor clean and fresh. Fix the cause of the damp as quickly as possible if you don’t want mould on your walls or damp stains!

  1. Prepare a proper inventory and tenancy agreement

Buy to letWhen it comes to damages, you will stand or fall according to the quality of your inventory and tenancy agreement.

Your inventory should be nothing short of your proof of the state of the property before the tenant moved in. It should be detailed, comprehensive, descriptive and include good quality photographs.

You are unlikely to be able to deduct money from a deposit unless you can prove the damage by reference to the inventory and it is well worth getting it prepared by a professional.

Equally, your tenancy agreement needs to be crystal clear. It should spell out the tenants’ obligations and allow you or your agent reasonable access to inspect and or repair the property. It should also be quite clear about what is not allowed, such as smoking, pets etc. and tenant obligations.

  1. Vet tenants

I can’t stress the importance of vetting your tenants enough. There are legal checks that you have to carry out in any event, but make sure you also check references or ask previous agents or landlords about a potential tenant.

At EweMove, we even visit potential tenants in their current premises and that can reveal volumes about how they will care for the property they live in.

  1. Have an effective check in and check out process

I generally recommend that you use an agent to check your tenants in and out at the beginning and end of the tenancy. This is the point at which you use your inventory and any other necessary reports or information to accurately record the state of the property.

A professional is often more experienced when it comes to a tenant leaving and will know where to check to avoid unexpected surprises. If damage is not noted at this stage of the process, you’re unlikely to be able to withhold any monies in respect of it.

  1. Carry out regular inspections

property inspections Regular inspections by you or your agent are a must and I recommend inspecting your property at least every quarter. Your agent can do this for you if you’re not available.

If there is damage it needs to be properly recorded in the presence of the tenant and repaired promptly. But do make sure you give your tenants proper notice of visits and call at a convenient and reasonable time.

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com

Are you an accidental landlord?

Are you an accidental landlord?

What is an accidental landlord?

As the name would suggest, an accidental landlord is someone who didn’t particularly intend to become a landlord. Perhaps you inherited a property, or you moved in with a partner and for whatever reason, haven’t sold your property. Maybe you split from a partner and can’t afford to live in your own property. Or maybe you’re working away from home at the moment, so have rented your property out.

There are all sorts of reasons why you may find yourself in the position of renting your property! In fact, This IS Money reported at the end of last year that there had been a massive increase in accidental landlords, with an estimated 80,000 properties now being rented across the UK as a result.

Why would you consider becoming a landlord rather than selling your property?

Help to BuyWell, the answer to that is simple. Rental payments are often considerably more than the cost of a low mortgage and the annual rate of rental growth increased by 1.6% last year. That said, it was slightly less in the south-east.

And if you’ve got your mortgage covered by rent payments, it takes away the pressure of having to get a quick sale, allowing you time to reflect on what you want to do, while you watch the market.

Landlord responsibilities and liabilities 

It is important to note, however, that in becoming a landlord, you take on a number of responsibilities, both in respect of the rent you receive, in respect of the property and in respect of your tenants.

Notify your lender and insurer

The first thing you must do if you decide to rent your property is to notify your lender of the change in circumstances. You should also notify your insurers.

Your lender may grant you a Consent to Let mortgage (which normally allows you to let your property for 12 months although you can sometimes reapply) while maintaining your current mortgage.

Alternatively, you may need or want to switch your residential mortgage to a buy to let mortgage. Although this is not necessarily complicated, it may include an arrangement fee and a different mortgage rate. You may also be offered a lower loan to value.

At the end of the Consent to Let period, you will have to decide whether to reapply, switch mortgage type or cease letting. How your lender responds to your application will depend on their individual approach.

It’s worth noting when considering your mortgage, that on average, most accidental landlords only rent their property for approximately 15 months and rarely seek a second tenant after the first has vacated.

Tax issues

You also have to declare any rental income for tax purposes and this is at a time when, unfortunately, the government is clamping down on landlords. Tax relief on offsetting mortgage interest payments against rental income is being gradually phased out (and will be replaced by a tax credit).  This year landlords will be only allowed to offset 50%, falling to 25% in 2019 and zero in 2020.

There are also changes to the wear and tear tax allowance previously available to landlords, diminishing the relief that’s available.

Stamp Duty and Capital Gains Tax

Changes to the stamp duty regulations mean that if you purchase a new property before you’ve sold your rental property, you will get hit with a 3% additional stamp duty charge.  And on disposal of any property, there could also be significant Capital Gains Tax implications.

A rise in mortgage interest rates

After enjoying low interest rates for a considerable period of time, there is now almost daily speculation in the financial press that there will be a hike in interest rates (and therefore in mortgage interest rates) at some point this year. How this will affect accidental landlords remains to be seen.

All these issues need to be given proper consideration before you make the decision to rent your property. And that’s before you take into account your actual legal responsibilities to your tenants.

Your landlord responsibilities

home safetyWe’ve blogged about your legal responsibilities as a landlord before but by way of a quick reminder, they include:

  • Right to rent. Under the Immigration Act 2014 landlords must check that their tenants have a legal right to rent in this country. You will have to check that they are eligible to be in the UK and allowed to rent. Failure to do so can result in severe penalties.
  • Tenancy deposit. There are rules about how you hold tenant deposits.
  • Safety checks. You will need to ensure a registered engineer checks every gas appliance and provides a record for the tenants. There are also fire and electricity safety issues and regulations with which you need to comply.
  • You will need a properly prepared tenancy agreement.

You don’t have to rule it out

It may sound like I’m a bit negative about accidental landlords. But I’m not. In the right circumstances, they can be an attractive and financially rewarding solution.

However, what I can’t stress enough is the importance of taking professional advice before you decide to become a landlord. Letting your property means you are in effect running a business, and it should be approached and treated in the same way.

Know your responsibilities, know the risks, as well as the perks and you’re far more likely to make it a success.

Graham Faulkner is Branch Director of EweMove Dorking

www.ewemove.com/dorkingHe’s bought and sold a lot of properties over the years and is also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.

Multi-award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.

Enquiries to 01306 406 506 or via email to dorking@ewemove.com