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FTBS, agent issues, leaseholders - have we answered your question?
Every week I co-host LBC Property Hour alongside Clive Bull and by now we have answered hundreds of questions. Below are a few of them which come up time and again so take a look and see if we have the answer to your property problem.
Q - I bought my first property at the beginning of the year and am now looking to invest in another property but haven't got enough for a deposit where I live. I have looked in Manchester, where is best to buy there?
A – What you need to bare in mind is that property prices rise at different rates across the country at different times. For example, since 2007 prices in Manchester have gone up by 3% while London prices have risen in double digits. In addition, remember adding a property to your portfolio will affect the tax you pay so before you add a second property to your ‘wealth’ you should consult an independent financial adviser so you understand the implications.
When it comes to buying and funding an investment property, talk to a mortgage broker so you can find out how much deposit you will need and the terms you can borrow against. Once you know what you can afford, you then work out what areas you can start to research to buy a property in.
Not sure about buy to let tax? Read our buy to let tax checklist.
You can also look at how to analyse a buy to let which will help you once you have found an area to search you can afford.
Q – I have been a landlord for many years now but I am now worried that I'm being overcharged by the letting agent. I usually let for between 6-12 months but am currently letting for two years and received a letting agent demand for an extra 10% fee for the second year, is this right?
A – The first thing to do is to check what is written in your management agreement as there may well be an extra charge or get an legal company to do this for you, it shouldn’t cost very much. Worst case if it does apply, see if you negotiate what you pay.
When choosing an agent always make sure they are members of ARLA, NALS or RICS and have Client Money Protection. This means if you are not happy with the current situation or what the agent is doing, you can complain via the redress scheme, especially as they have to abide by an additional code of conduct.
Need to choose an agent? Do just that with our choosing a letting agent checklist.
Q – I'm trying to sell my flat, I believe I have 72 to 73 years left on the lease, however my buyer's solicitor think it's in 60s. I have approached the leaseholder to check the length of lease and the cost of extending it and they said it would cost £900 just to check it for me - is this correct?
A – It does seems like a high fee, for something like this I'd contact the Association of Leasehold Enfranchisement Practitioners for advice. When applying to extend a lease your landlord is not allowed to charge you an unreasonable fee in relation to legal costs as the amount is regulated by an act of parliament. Ensure you speak to an expert valuer for the cost of the extending lease.
For more from ALEP, read:
Q – I've been renting a flat recently and just moved out, the deposit was in a custodial scheme and there was a dispute. When I vacated a flat I used an agent recommended cleaning service which was approved. The claim went further and I was told that they would write to me for proof. I didn't receive anything in the post but got an email saying that because they hadn't heard from me they were relieving disputed amount, can I get them to hold onto the payment?
A – Cleaning is the biggest source of disputes between tenants and landlords. Legally you can be chased up via telephone, email and letter. If you have missed a deadline there is a grace period, but if you missed an email you may have lost the case and the opportunity to appeal.
For more on tenancy deposits, read our Tenancy Deposit Scheme checklist and if you are unhappy about a decision visit the TDS complaints page.
Q – I've got a leasehold flat with London borough council, along with other leaseholders we are in dispute with the council regarding the cost of major works. What are my options on selling the property, could myself and the buyer split the cost of works post sale?
A – Talk to the local agent to find the best deal you can do as it is a matter of negotiation. Any deals with the buyer can be put into contract for sale, but as it is a leasehold property please make sure you choose a good legal company that is expert in leasehold law.
Looking for a letting agent? Read how to choose a letting agent from Belvoir and for leasehold queries visit the Association of Leashold Enranchisement Practitioners.
Q – I'm in the process of buying a house and will own two houses for a short period of time, how is second home stamp duty paid and how do I claim it back once I have sold the first property?
A – On the day of completion you will be subject to the extra 3% stamp duty. However if it is clear that you are swapping primary residences you will have up to three years to claim it back. It is paid via solicitor and when you have sold the 1st property contact them to help claim it back.
For more, visit www.gov.uk/stamp-duty-land-tax/overview and if you want to learn more about the stamp duty changes, read: Stamp duty news from the March budget.
Q – I'm in the process of buying a flat, my offer has been accepted but I have been told by an estate agent that it's not worth having a survey done on a flat, is this right? It's quite an old flat, if I get a survey done and it's shown to need works done, would it be appropriate to re-negotiate the agreed price?
A – It is important to remember that most flats are leasehold so you are often partly responsible for costs of repair to the whole development so it's very important to get survey. When you have had had the survey done you can then try to renegotiate the price if there are problems. Ideally make sure your surveyor can access the roof and also ensure that you request any major works schedules eg when is a new roof required and if there is a ‘sinking fund’ for these ie the major work doesn’t just rely on the owner to pay the full amount at the time, but owners over time put into a fund to cover all costs.
For more on leaseholds visit the Leasehold Advisory Service.
Q – My son is a first time buyer and has had an offer accepted for a Housing Association flat, he will own 25% and the mortgage which will be £100,000 with a 10% deposit. There is an 83 year lease and I said he should be concerned about that, am I right?
A – Yes! When a lease falls below 80 years there are a limited number of lenders who will lend and anything that restricts the number of people who can buy your property affects the value. When a lease drops below 70 years potentially only cash buyers will be able to buy it, which is a problem for shared ownership It shouldn't, necessarily, stop him buying the flat but he should investigate how to extend the lease and whether he is overpaying for the property with such a short lease and investigate a lease extension.
What type of survey should you get? Read our choosing a surveyor and type of survey checklist.
Q – How do I find a good letting agent? I own a property which is being rented out at the moment but I wasn't provided with much guidance by the agent.
A – The first thing is to do your due diligence on the agent, this is vital as they play a major role in a successful buy to let project. The key things to look for is whether they are members of NALS/ARLA/RICS, if they aren’t they may not have Client Money Protection should your rent go missing from their bank account and they may not even know lettings legals. Checkout reviews on all agents and do visit the agent office. They must too, by law, belong to a redress scheme. Most good agents will have big checklist to make sure you let property the property safely and legally. One question to ask them is whether they know about the housing health and safety rating system, if they don't, run away!
Need find a letting agent? Read our how to choose a letting agent checklist.
Q – We finished a tenancy in September and the landlord has yet to return the deposit. They made a claim but haven't actually done anything yet, we rejected the claim and they still haven't got back to us. The claim has gone to dispute with the Deposit Protection Service (DPS), what should I do?
A – Landlords have 14 days to respond, after that there are processes that the DPS will follow. If the landlord doesn't respond or provide any evidence for taking the deposit then the award usually goes to the tenant.
For more on landlord deposit rules, read our landlord deposit protection checklist and for tenants, read our Tenancy Deposit Scheme checklist.
Q – I'm over 70, my interest only mortgage has come to an end and I have part of the funds to repay the debt that I owe but lent it to my children to for deposits. The building society is sending threatening letters but I just want to extend the mortgage for a couple of years so I can pay it off. I've been trying to speak to them but it's becoming tough, what shall I do?
A – This is an issue for a lot of people, the rules now make it more difficult to for older people to extend their mortgages. In some circumstances you may be relying on the good nature of the building society. The suggestion was to see an independent financial adviser and the building society to discuss the options.
For help choosing a broker visit read our expert checklist if you want to find out more about making sure you secure the right mortgage for you it is worth reading our securing the right mortgage checklist.
Q – Is the Help to Buy ISA only available to first time buyers and is it just for houses?
A – My current understanding is this is just for first time buyers, although you can purchase a property through the Help to Buy Scheme for new builds without being a first time buyer. The schemes are different for Wales, Scotland, N.Ireland and for England, so check these out.
Buying for the first time? Download our first time buyer eBook.
For more Q&As visit my LBC Property Hour page.
