Buy to Let Conveyancing Solicitors

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.

What should I do if I want to rent out my home?

If you already own a property and you’re thinking about letting it, you’ll need to consider several factors:

• For leasehold properties, you’ll need to make sure your lease allows for you to rent it out. If it doesn’t, you may first have to secure permission from the leaseholder.
• If you have an existing mortgage on your property, you must seek permission from your current mortgage provider before renting it out. Make sure to get this consent in writing before going any further.
• You’ll also need to draw up a tenancy agreement. Assured Shorthold Tenancies (ASTs) are the most common type. But depending on your circumstances, you might need to have additional clauses written up.
• Be aware that you may need to pay income tax on rent and capital gains tax if and when you sell your property.

How does Stamp Duty work for buy to let properties?

Stamp Duty Land Tax is a tax that is applied to homes that exceed a certain value. In England, the threshold is £40,000. If you pay more than this amount for your buy to let property, you’ll be charged 5% extra in Stamp Duty tax. This is because buy to let properties are classed as second homes.

The main exception to this is if you’re investing in a buy to let property as a first-time buyer, meaning you don’t already own any property. In these cases, the standard home mover stamp duty rates will apply.

If you’d like to find out more about how Stamp Duty is applied to buy to let properties and second homes, take a look at our free guide.

How much are solicitor fees for a buy to let?

We understand that cost will be a significant factor when you’re looking for a solicitor to help with your purchase. Typically, buy to let solicitor fees will fall between £600 and £1,500. But the cost will often be greater for leasehold properties.

Just let us know what you need and our legal experts will give you an instant quote.