Owning a Second Property- what to consider

Owning a Second Property- what to consider

Owning a Second Property- what to consider:

​It is estimated that around 10% of home-owners have a second property, either to use as a holiday home or as a rental property.  If you are looking to purchase an additional property, that won’t be your main home, here are the key things to consider:

  1. If you are purchasing with a mortgage you will need to make sure that the mortgage product you have is suitable and that the lender knows what you plan to do with the property. Be aware that a common feature of buy to let mortgage offers is the requirement that any renter be independent i.e. not family.
  1. Stamp Duty Land Tax (‘SDLT’) will be more expensive. On a first property purchase you will not pay any SDLT on the first £125,000.  From £125,001 to £250,000 you will pay 2% and as the purchase price increases so does the percentage payable, in small increments.  With a second property you will pay an additional sum on top of the typical SDLT payment.  Meaning a £400,000 purchase goes from £10,000 to £22,000.
  1. There will be tax implications on sale with Capital Gains Tax likely being due. This is an area that you will need to discuss in detail with your accountant.
  1. It has been reported that the seaside town of Whitby in Yorkshire is looking to pass legislation that reduces the opportunities for investors to purchase holiday homes/ second homes. It is worth noting that not everywhere will welcome a resident that only comes when the sun shines.
  1. If you are looking to rent the property out (to long or short term tenants) you will need to be prepared to meet the costs of running the property during any time it is empty. These costs can rack up quickly: council tax, gas and electricity plus any insurance.  If you have insurance (which will be a requirement of any lender if you purchased with a mortgage) you will need to make sure you can visit the property regularly or hire help to assist you as the insurer will want to make sure no post has built up at the door (fire hazard) and that pipes haven’t burst during any cold spells.
  1. As a landlord you have safety obligations that you must fulfil- you must fit and test fire alarms and carbon monoxide alarms.  Every year all gas installations (boiler, cooker, gas fire) must be checked and serviced.

Having a holiday home is a great luxury but if you are not fully aware of the reality it can ruin the dream.

If you have any questions about renting out your property or purchasing a second home please contact the team on 01206 577 676 or email [email protected]

For more information on owing a second property

Contact us by calling 01206 577676 or you can email [email protected]

Changes brought by the Leasehold Reform (Ground Rent) Act 2022

Changes brought by the Leasehold Reform (Ground Rent) Act 2022

Changes brought by the Leasehold Reform (Ground Rent) Act 2022

If you are a leaseholder or if you are considering purchasing a leasehold property, keep reading.

The Leasehold Reform (Ground Rent) Act 2022 comes into force on 30th June 2022 and brings with it major changes to the rules governing ground rent and lease extensions. The Act is part of the government’s plan to make leasehold properties more affordable and fairer. In effect the Act will prevent the Freeholders from charging more than a ‘peppercorn’, also know as ‘zero’, ground rent on all new residential long leases granted after the Act comes into force. This new rule equally applies to lease extensions, effectively bringing the ground rent to a ‘peppercorn’ as it would with a new statutory lease. However, for lease extensions, the ground rent will be set at zero once the period for the new lease starts and will not have effect immediately as it would in the case of an all-new lease. Therefore, you will still be liable for the ground rent set in the old lease until the new period added to the lease by the extension commences.

The Act does not affect any short-term tenancies, business leases, community housing leases, home finance leases or any leases that are already in existence. Nevertheless, from 1 April 2023 the rules set in the Act will also apply to retirement properties.

Freeholders need to be careful when granting new leases and/or extensions as the Act brings with it strict penalties of up to £30,000 if Freeholders are still charging ground rent or any administration fees for collecting the ground rent after 30th June 2022. Developers need to be equally aware of the new rules if they intend to sell the properties as separate leaseholds and grant new leases as it is crucial to ensure they are compliant with the Act.

If you are looking to buy a new leasehold property or to extend your existing lease or you would simply like to know more about how the new rules affect you, please contact our Conveyancing Team. You can call us on 01206 577676 or send us an email at [email protected]

For more information on leasehold property

Contact our Colchester office on 01206 577676 or you can email [email protected]

Buying a house with a septic tank!

Buying a house with a septic tank!

Buying a house with a septic tank!

GoodyBurrett LLP serves rural and town clients alike and we get a large number of residential property transactions for houses that are not connected up to the mains sewerage systems and have to have independent options. 

The most popular are modern sewage treatment plant systems that attend to the waste and then produce a treated, clean water (suitable for discharging into nearby water courses or ditches). However, there are other options such as septic tanks which you are likely to find in an older property.

What is a sewage treatment system?

These are usually quite small systems, often located above ground, that will work quickly and odourlessly to attend to the household waste.  Some very modern solutions have panel displays to alert you straight away to issues within the system.

While ongoing maintenance and emptying is required it is needed much less frequently and is a much smaller job than with traditional systems like septic tanks.

As mentioned above, because the water produced by these types of systems is much cleaner there are fewer environmental issues to attend to and much less paperwork re: permits etc.

What is a septic tank?

It is a tank usually located underground that collects waste matter from the house and uses the natural bacteria within the waste to encourage decomposition. Any waste-water from the system needs an area to drain into, preferably a soak away or drainage field.   It will need regular maintenance and emptying which can easily be attended to by local specialists.

It is likely any septic tank will have been in situ for decades as the more modern options are more cost effective and space saving and appeal more to rural developers.

A septic tank is likely to require a permit and other formal paperwork to ensure that any emissions from the tank flow to a secure area.  This is important to ensure there is no compromise to local wildlife or beauty spot.

General

In many cases both septic tanks and sewerage systems are shared between households (i.e. neighbours) so it is important to be aware of the capacity and location of the system itself so maintenance can easily be arranged when required.

If you are looking to install a new system you may need planning permission and you will be building regulations. As referred to above depending on the system you may also need further environmental paperwork.

If you are looking to sell a property with an existing sewage system you must make sure you meet the General Binding Rules 2020 which are the regulations keeping track of the safety and cleanliness of the systems used in this way.

If you have any questions about buying or selling a house which is not connected to mains sewerage we will be more than happy to assist.  You can call us on 01206 577676 or pop us an email to [email protected]

If you would like any advice on buying / selling your house

Contact GoodyBurrett on 01206 577676 or email [email protected]

How to protect yourself against conveyancing scams?

How to protect yourself against conveyancing scams?

How to protect yourself against conveyancing scams?

Numerous scams have recently been reported in the press in relation to the conveyancing process. Clients can become victims if communications between them and their solicitors are intercepted by scammers. The Law Society has reported more and more cases of instances where victims have been defrauded of thousands of pounds.

How do the scams work?

The scammers gather information about the property transaction, then right before exchange or completion they send fake emails. These emails look like they were sent by their solicitor and ask for the balance of funds for the property transaction to be sent to an alternative bank account. Scammers typically target individuals who are purchasing properties without mortgage funding and trick them into sending the deposit or the balance of funds to their account. The Law Society together with the National Economic Crime Centre and Action Fraud are issuing warnings of the risk of payment diversion fraud.

A homebuyer was tricked, using the above method, into paying £640,000 to an alternative bank account. The bank details were provided to him on headed paper identical to the one used by his solicitors. The actual solicitor later informed the client that the funds were not requested by the firm and that he has been scammed. Unfortunately, the money was not recovered and as a result the homebuyer lost all his savings and the property he was trying to purchase.

How to protect yourself from conveyancing scams when purchasing?

The Law Society has issued the following tips so you can avoid becoming a victim of scammers.

  1. Whenever you receive an email from your solicitor requesting a transfer of money or for your bank account details, you should call your solicitor to confirm the request has come from them. If the bank details provided in the email are different from the ones provided in the client care letter (or any other secure communication between you and your solicitors) then you should confirm the changes over the phone. This should always be a red flag as law firms rarely change their bank details.
  2. You should double check that the sender’s email address is correct. This will usually be incorrect but as scammers find new ways to hack into emails or create new ones resembling the law firm’s you should still contact your solicitors to confirm if they requested the payment if you are even slightly unsure.

In addition to the above, we would recommend that you always use a secure and private internet connection when transferring funds to your solicitor.

If you receive an email from anyone at GoodyBurrett requesting your bank details or requesting monies, always phone our office immediately to confirm the details before making payment. Please be on notice that it is a policy of GoodyBurrett not to send or accept bank details via email.

For more information on how we could help with your conveyancing needs, feel free to contact us for a free, no obligation quotation.

If you would like any advice from our conveyancing department

Contact GoodyBurrett on 01206 577676 or email [email protected]

Buying a house?

Buying a house?

An update on Buying a Home

Tenants and home buyers in England, Scotland, Wales and Northern Ireland are still permitted to move home, despite current lockdown measures being imposed in response to the Coronavirus outbreak on 6th January 2021.   So, what does that mean for the property world?

Can I move home?

It has been confirmed that home buyers and renters are allowed to continue to move home during this lockdown in all parts of the UK.  This is subject to following social distancing rules and the correct procedures.  This means that people looking to move home can continue with planned moves and view new properties to move in the upcoming months.  Estate and lettings agents, removers, valuers and people in sales and letting offices and show homes are able to continue working.

Guidance suggests arranging in-person house viewings by appointment.  Social distancing measures must be adhered to and washing hands when first entering the home. Virtual viewings are also available in certain circumstances and can be arranged if you do not feel comfortable visiting the property. 

Can I still get a mortgage payment holiday?

You are still able to apply for a mortgage payment holiday up until the 31st March 2021.  How long a deferral you may be able to qualify for will depend on whether you have already had one since the start of the Covid-19 outbreak or if this is a new request.

If you haven’t already taken out a payment holiday yet, you can request deferrals up to a maximum of sixth months.  Or, if you already have a payment holiday, you can extend this until you reach the six-month limit. 

How can we help you?

If you are worried about the process of buying a home during lockdown or asking for a mortgage deferral, then GoodyBurrett have a fantastic property department to help with the buying process.  If you are interested, contact us at 01206 577676 or at [email protected]

 

For more information on buying or selling your home

Contact our Conveyancing Department on 01206 577676 or email [email protected]

Client care at GoodyBurrett

Client care at GoodyBurrett

Client care at GoodyBurrett

Client care is so important to us here at GoodyBurrett. Not only is it the right thing to do and we want to keep our clients happy, but there are also Statutory Requirements in relation to client care.

Delivery – We want to ensure that at the end of your matter, we arrive at the final outcome having kept our promises to you, our client.

Timeliness – We strive to do everything in a timely manner. If we are going to face delays due to outside influences beyond our control, you will be kept informed.

Keeping you informed – We will always provide you with comprehensive and accurate information in relation to your matter as and when we receive it.

Professionalism – Your matter will be dealt with by staff that are competent, knowledgeable, professional and client focused, who have a thorough understanding of your matter.

Staff attitude – All of our staff are approachable, friendly, and understanding of your needs. We will assist you in an open and transparent way.

At GoodyBurrett we have our Golden Principles:

# PUT YOURSELF IN THE CUSTOMER’S SITUATION – Have compassion and try to understand what the client is going through whilst remaining objective.

# FIND THE REAL ISSUE AND WHAT THE CLIENT NEEDS – Good communication skills are paramount along with the ability to listen to your client and really understand what the real issue is for them.

# INVOLVE THE CLIENT IN THE ANSWER – Talk to your client and understand their goals and outcomes.

# ACCEPT ACCOUNTABILITY – If there is a problem or an issue, personally deal with the problem as soon as you are aware of it.

# FOLLOW UP – if there has been a problem or an issue arise, once resolved, always make sure you check that the client is now satisfied.

In the words of Bill Gates,“ Your most unhappy customers are your greatest source of learning”. If we do not know what is wrong, we can’t fix it and learn from it. However, if we do not know what is right, we can’t do more of it. If there is something you are unhappy about, we need to hear from you to enable us to solve the issue. BUT … if there is something we are doing great, please do shout out to us and let us know, we’d love to hear from you too.

We are always here to help.  You can contact us via email [email protected] or call us on 01206 577676.

We are always here to help

Contact GoodyBurrett on 01206 577676 or email [email protected]