Buy to let conveyancing
There were approximately 4.6 million households within the private rented sector in 2021/22 – representing 19% of all households in England. This demonstrates how popular buy to lets have become as an investment option.
A stable income from monthly rent payments can be extremely appealing. But risks do exist, as well as potential legal issues. You’ll need to ensure that you’ve undergone all the proper procedures before officially becoming a landlord.
Whether you’re completely new to the world of letting or you’re an experienced landlord, it can be complicated arranging a buy to let mortgage and purchase. At First4Lawyers, we can help you access the expert help and advice of experienced conveyancing solicitors.
They’ll help you navigate the buy to let conveyancing process and support you in tackling any legal hurdles surrounding your investment.
Legal requirements for a buy to let property
As with buying a property you intend to live in, once a seller accepts your offer, you’ll need a solicitor to act on your behalf throughout the conveyancing process. Their role will be to make sure the legal side of the purchase is all taken care of.
For instance, they’ll first ensure that there are no restrictions preventing you from letting your chosen property. They’ll then assist you in taking out the appropriate mortgage – as you’ll need a special buy to let home loan.
There will be a number of certifications to get and regulations to comply with before you can rent out your property, too. These will include:
- An energy performance certificate (EPC)
- A gas safety certificate
- An electrical safety certificate
- Landlord’s insurance
- Meeting fire safety requirements for any furniture and furnishings
- A House in Multiple Occupation (HMO) licence – this will apply if there will be more than five people living in the property who are not from the same household
What does the buy to let conveyancing process involve?
The process for purchasing a buy to let can seem overwhelming, especially if it’s your first time doing it. We’ve broken down the process into stages, so you can see what will need doing, one step at a time.
- Research different areas
Think about where the best areas for your potential tenants could be. For example, if you’re planning on renting out to students, you’ll need to look in university towns.
You should also consider things like transportation links, local shops, restaurants, schools and anything else you think your tenants would value having in their local area.
- Do the sums
You’ll need to know your numbers before choosing a buy to let property. Take some time to work out how much properties cost in the areas you’re considering and what you can realistically charge tenants.
Asking for too much rent could put prospective tenants off, but pricing too low could mean you lose out on potential income. You’ll also have to factor in Stamp Duty costs for buy to let homes, which are higher than the amounts paid by owner-occupiers.
- Choose the right buy to let solicitor
With so many rules to adhere to, knowing you have a legal expert on your side can be a big weight off your shoulders.
We work with buy to let solicitors who are based up and down the country. So if you’re not sure where to start looking, we could help you.
- Get the best mortgage deal
Shop around for the most attractive mortgage rate. If you’re paying less in mortgage repayments, you’ll be able to keep your rent at a competitive rate and see more profit. We’d suggest using a specialist mortgage broker to help you get the best deal.
Remember that there are specific mortgages for buy to let properties. This is because buy to lets are considered to be more high-risk, so interest is usually higher. If you’re not sure how to get a buy to let mortgage, your solicitor will help you.
- Know the risks
Make sure you know the possible risks involved with buy to let properties. For instance, there might be times where the property is empty and there are no rent payments coming in. Do you know how you’ll make up for the shortfall during these periods?
It’s especially important that you know the answer to this question if you’re planning to use rent payments to repay the mortgage on your property. If not, you could risk having it repossessed in a worst case scenario.
- Understand tenants’ rights
Your tenants have rights and it’s up to you to understand what these are. For example, tenants have the ability to challenge excessively high charges, to live in the property undisturbed and to be protected from unfair evictions.
When visiting the property, you’ll also have to give your tenants 24 hours’ notice and it must be done at a reasonable time of day. Your tenants have a responsibility to look after the property too, so make sure you understand everyone’s position.
Your solicitor will be there to be assist you at each stage of the process, and will be ready to answer any questions you might have.
