There are several reasons why people decide to become a landlord, whether this is an investment decision or based on personal circumstances, the UK property rental sector is an attractive prospect and can achieve a higher return on investment than traditional savings.
It is a shifting market and landlords’ obligations can seem daunting especially when starting out on your journey as a first-time landlord.
Finding your property
If you are looking for an investment property to purchase in the private rental sector it is important to research the area you are looking to purchase in as well as the property itself.
A letting agent can advise you on the local hot spots in the area you are looking for, as well as those with rental properties which will realise a high rental yield. An agent will also be able to advise you of the standard of decoration and furnishings which are expected to get the property rented out quickly.
Initial Taxation
When buying to let, taxation aspects must be considered.
Stamp Duty Land Tax (SDLT) is payable on the purchase of land and buildings in England and NI. The current SDLT threshold for residential properties is £250,000 and the SDLT rates for residential property are on a scale from 0% to 12%. There is an additional 3% surcharge on additional residential properties (taking the maximum to 15%) but there may also be some SDLT reliefs available.
If you are not present in the UK for at least 183 days (6 months) during the 12 months before your purchase, you are ‘not a UK resident’ for the purposes of SDLT. You will usually pay a 2% surcharge if you are buying a residential property in England or Northern Ireland on or after 1 April 2021.
If you would like more information on the above, please contact me for an informal discussion on how we can help.