Buy-to-let has seen a resurgence in recent times.
As an income investment for those with enough money to raise a big deposit buy-to-let looks attractive, especially compared to low savings rates and stock market swings.
Meanwhile, the property market bouncing back has encouraged more investors to snap up property in the hope of its value rising.
Mortgage rates at record lows are helping buy-to-let investors make deals stack up.
But beware low rates. One day they must rise and you need to know your investment can stand that test.
There is also a tax rise coming, as buy-to-let mortgage interest relief is axed and replaced with a 20 per cent tax credit. Additionally, from April 2016 landlords now have to pay an extra 3% stamp duty on property purchases.
Recent history provides an important lesson in how returns can be hit. Many investors who bought in the boom years before 2007 struggled as mortgage rates rose. A sizeable number were thrown a lifeline when the base rate was slashed to 0.5 per cent. Rates have stuck there since 2008, but remember they will rise again.
Yet despite the tax changes and potential for mortgage costs to rise, greater demand from tenants, rents that should rise with inflation and the long horizon for interest rate rises, mean many investors are still tempted by buy-to-let.
If you are planning on investing, or just want to know more, there are essential things to consider for a successful buy-to-let investment.
Like any investment, buy-to-let comes with no guarantees, but for those who have more faith in bricks and mortar than stocks and shares there are many things you need to know. On a positive note, good advice is plentiful and nationwide and whether you are looking for conveyancing solicitors or the perfect insurance company, there is no shortage of resource available. Some of the finer details are included in this helpful list.
Essential house purchase documents
Buying a house is a long, complicated process and it’s all too easy to forget the finer details. We take a look at the essential documents you should have with you once you complete your house purchase.
Essential house purchase documents your solicitor / conveyancer should provide
- Title Deeds: Normally you won’t have title deeds – this is because the Land Registry records are now all digital.
- You may have title deeds if your property hasn’t been registered before, but this is becoming quite rare. You should still get confirmation from your solicitor that s/he has registered you as owner of the property– your solicitor should provide you with a copy of the registered title showing you as “registered proprietor” within a month or two of completion.
- If your property is leasehold, your solicitor should give you a copy of the lease (with lease plan of your property) and any service charge accounts or forecasts.
- Your solicitor’s report on title is a useful document to keep handy. As well as including a summary of the legal title and property search results, it should also have attached the seller’s property information form which contains lots of useful practical information like the location of the water stop cock, electricity and gas meters and confirmation of who is responsible for which boundary fences.
- For new builds (or properties under 10 years old) – you should have a copy of your Buildmark (NHBC) or other new home policy/warranty documents.
- Confirmation from your solicitor that stamp duty has been paid (within 30 days of the completion date).
- As appropriate, you should have a copy of any restrictive covenant indemnity insurance policy, chancel repair indemnity insurance or any other legal cover if required by your solicitor (if it is required, the reasons for this will be explained in the solicitor’s report on title).
Essential house purchase documents from your seller (if not already provided by your solicitor / conveyancer)
- Guarantees – e.g. any recent damp-proofing, new appliances (oven, boiler, etc), FENSA (double-glazing) certificates. FENSA certificates last 10 years; damp proofing guarantee should also be about 10 years. New appliances can have a warranty period of anything from 12 months to perhaps five years for a boiler.
- Records of servicing of boiler.
- Electrical certificates for any electrical works/rewiring.
- Building control certificates for any extensions or conversion works that may have been done to the property.
Essential house purchase documents as a buyer
- Buildings insurance policy details and contents insurance policy details (if you decide to have contents insurance).
- Survey – if you have had a survey, it is useful to keep a copy of this to remind you what issues were raised/might need attention soon