Why There Has Never Been A Better Time To Invest In A Buy-To-Let Property

If you are considering an investment in a buy to let property in Mansfield or the Sutton in Ashfield area, in our opinion there has never been a better time to do so. There are three main reasons for this:

1) Affordable property prices

Despite the meteoric rise of property prices across the country, and recently in the East Midlands in particular, there are still some fantastically affordable homes available in the area. Well-built, two and three-bedroom terraced houses in and around Mansfield can be found on the market from as little as £50-£60,000. Semi-detached family homes can still be secured from £90 to £120,000. This offers incredible value to families looking to move into the area, especially for professionals commuting to Nottingham, Sheffield or Leeds. As a buy to let investment, a local property will set you back far less than the equivalent in the south of the county. Furthermore, with prices in the area set to rise over the coming couple of years, investors can expect an impressive gain in equity when they come to sell on their property.

2) Availability of new properties

The East Midlands is in the fortunate position to be somewhat sheltered from the ‘property drought’ affecting some parts of the country, especially London, the south-east and north-east areas of England. In these areas, demand for property is outstripping the number of new houses that are becoming available on the market. On the one hand this is further bolstering house prices in the regions affected, but it also has the potential to trigger a slowdown in the rental market, as potential tenants choose to buy property themselves rather than pay increased rents. Therefore, for a buy to let investor, a ‘property drought’ is a very mixed blessing. Currently, the housing market in North Nottinghamshire doesn’t show any signs of this problem, with plenty of high quality, affordable housing coming available to keep up with demand.

3) Best ever yields from buy to let properties

Perhaps the most compelling reason to invest in a buy to let property are the incredible returns available from this kind of investment at the moment. According to industry averages published in January, average returns for landlords in England and Wales have increased by 12% since January 2015. In terms of money in the bank, this is a nationwide average of £21,988 gross income over the past year (before mortgage payments, maintenance cost and other deductions are taken into account)

With the financial prospect for landlords looking healthier than at any time for two years or more, and with plenty of affordable and desirable properties available, now is the time to consider your buy to let investment. As prices begin to creep up again after the winter slow down, the sooner you make your investment, the higher returns you are likely to yield, both in terms of increased equity and income from rents.

How ‘Right To Rent’ Laws Are Going To Affect Landlords

New immigration laws that came into force on 4th February 2016 are going to affect every landlord in the country. The so-called ‘Right to Rent’ checks have not been widely publicised or explained, and figures from the Residential Landlord Association suggest that in excess of 70% of landlords do not understand their obligations under the new legislation.

The crucial part of the legislation is this: it is now the legal responsibility of the landlord to ensure that their tenant has the right to live here legally before renting out their property to them. Failure to carry out these responsibilities effectively can risk prosecution carrying a fine of £3,000 or custodial sentence of up to five years in prison.

By following the tips below, landlords can be relaxed about the new legislation and be confident of compliance with right to rent:

1) Be clear on the number of adults will be living in your property. Make sure it is reasonable based on the size and type of your property. If you have any doubts, you are within your rights to make reasonable enquiries of your prospective tenant and to record their response. If you use a property agent, remember that it is ultimately your legal responsibility to ensure compliance, so make sure your agent is carrying out the correct checks.

2) Make sure that you, or your agent sees original versions of any document that proves right to rent. Validation checks should be made at least 28 days before the tenancy is due to begin, and the tenant should not be permitted to move in before these legal rights have been proved.

3) Check the details of all the documents, preferably in the presence of the document holders. Make sure the details, such as photographs and dates of birth are consistent across the different document. Also make sure that important documents such as passports are not expired. Record the explanations given for any discrepancies.

4) If a tenant claims they have the right to rent but cannot prove it, this doesn’t mean you automatically have to reject their tenancy. For instance, they may have been granted a discretionary right to rent or be part of an ongoing immigration application. In this case, you or your agent can request that their claim be checked by the Home Office and confirmation given. The Home Office should reply within two working days of receiving your request.

Any change in regulations can appear daunting, and right to rent has worried a lot of landlords. In the case of this legislation, poor public information and speculation has compounded legitimate worry among landlords. However, once you are clear about what sort of information is required and the documents a tenant needs to show to prove it, the increased administrative burden will be minimal. The changes themselves should prove positive, and will help landlords secure responsible, long-term tenants for their properties.