If you’ve been listening to The Archers recently – and five million of us do – you’ll have noticed that property is a hot topic in the fictional village of Ambridge.
What with Fallon and Harrison’s house-buying adventures, Eddie and Clarrie’s B&B business and Tom’s doomed land deal, it’s clear that Borsetshire folk are not regular visitors to Propertychecklists.co.uk, as they’re breaking almost every rule the book.
Some of the characters seem to be living by the maxim “if you can’t be a good example, be a horrible warning”, but we can all learn from their mistakes. Here’s my advice to the good people of Ambridge:
What’s the story?
The impoverished farmers have been topping up their income by renting out the spare room at Grange Farm through a ‘sharing economy’ website.
What’s the problem?
They rent Grange Farm so are most likely breaking their tenancy agreement by illegally sub-letting. Eddie claimed he had landlord Oliver’s permission but we all knew he was bluffing; all Oliver said was that it was fine for them to have friends to stay, which is not the same at all.
Following the death of his wife, Caroline, Oliver returned to Ambridge, turned up unannounced at Grange Farm and learned what’s been going on. He reacted with uncharacteristic but understandable anger, smashing a jug and was embarrassed about his outburst and admitted he didn’t really mind about them renting out the room, he was just surprised to find strangers in his house.
What should they have done?
Eddie should have been completely honest with Oliver and sought written permission. As we have already learned, soft-hearted Oliver is so amenable, he’d have agreed anyway.
What’s the worst that could happen?
In real life, things were unlikely to have been smoothed over so quickly. Oliver is perfectly within his rights to start eviction proceedings by serving a Section 8 notice. But eviction on the grounds of illegal sub-letting is at the court’s discretion and it could be a lengthy and expensive process. Plus, will the listeners tolerate another court case?
Oliver’s other option would be to serve a Section 21 notice, giving them two months’ notice to leave, assuming he has protected their deposit in a government-approved scheme (let’s hope he has).
If the guests were hurt while staying at the property (and it is a farm, after all, so huge potential there), they would have the problem of not knowing who to claim from. And if they caused any damage, the Grundys would be liable for any costs.
This is why they would need specialist insurance – or at the very least they’d need to inform their house insurer.
And even if they had permission from their landlord, there’s a whole minefield of laws and regulations they should be following – from fire safety risk assessments to gas and electrical safety inspections – before they rent out any part of their property, even just for a weekend. Failure to comply with the regulations it could invalidate their insurance policy.
Once all the rules and regs are followed, there is money to be earned – and up to £7,500 a year is tax-free. (It still needs to be declared on a tax return though.)
Find out how to let legally with the Buy to Let Show and accompanying eBook:
What’s the story?
Let’s look at the situation from Oliver’s point of view. He (rashly) left his farm in the hands of the Grundys while he and his wife, Caroline, retired to Tuscany. Now Caroline has died, he’s back in Ambridge for the memorial service.
What’s the problem?
The Grundys could legitimately be described as nightmare tenants. Last year they caused all manner of damage to the house, effectively sabotaging Oliver’s attempts to sell the property. Despite all this, he graciously allowed them to stay put and, with typical lack of gratitude, they started up a bed and breakfast business without his knowledge.
What should he have done?
For a start, he should have given them at least 24 hours’ notice in writing that he planned to visit the property. Although, had he done so, the Grundys would have had time to send their guests packing and hide the evidence… spoiling a traditional Friday night cliff-hanger.
As for the B&B business, regular inspections are the answer here. Even in his absence, Oliver could have arranged for a letting agent to keep an eye on the property for him and check its condition against an inventory, then he or the agent could have nipped any issues in the bud. A chat to the neighbours may have uncovered the illegal sub-letting earlier on, as would a periodic check of the most popular websites, such as AirBnB.
Oliver should read these tips for a successful let:
What’s the worst that could happen?
Oliver’s landlord insurance could be invalidated, making it difficult for him to claim for any damage caused, and if the guests were hurt, they could claim against him. And then, of course, there’s the hassle and cost of evicting his problem tenants, if he decided to go down that route.
If you ever need to evict, make sure you read these tips:
What’s the story?
Party planner Fallon and village bobby Harrison are renting Woodbine Cottage from Christine Barford. But, like many young couples, they are keen to get a foot on the property ladder and, when Christine heard as much on the village grapevine (AKA Susan Carter), she decided she couldn’t face finding a new tenant and decided to sell up instead.
She gave Fallon and Harrison first refusal but they said the cottage was way out of their price range. But in a happy – and unsurprising – plot twist, Harrison’s parents agreed to lend them some money so they can afford to buy the cottage and stay in the village.
Problem 1
Christine turned up unexpectedly on Fallon’s doorstep one morning to inform her of her plans to sell, and announced that an estate agent would be round at lunchtime. This is a big no-no for landlords as a tenant is entitled to live in their home in “quiet enjoyment”.
If Christine was a member of a landlord association, she’d be more up-to-date with the rules and regulations:
What should they have done?
Carrie Alliston, of Hunters estate agency, says Christine should have given Fallon and Harrison at least 24 hours’ notice, in writing, of both her visit and that of the estate agent, and that if the tenants had refused access, she couldn’t enter.
Carrie adds: “Best practice for an agent or landlord would be to call a tenant to explain what’s going on, explain the legal side and expected timescales, as well as answer any questions they may have.”
The only time notice is not required is in an emergency such as a fire or water pouring through the property – or into someone else’s.
And if Fallon and Harrison change their minds and pull out of the sale, Christine may find this checklist useful:
Problem 2
Borrowing money from Harrison’s parents could backfire… for the parents, who need to make it very clear, in writing, that the money is a loan which needs paying back. It also means Fallon’s stake in the property is much lower than Harrison’s as she has very little to contribute to the deposit.
What should they do?
Fallon and Harrison need to inform the mortgage lender of the loan, and the lender will need evidence of the source of the money. The loan needs to be transferred to Harrison to hand over to the bank. Harrison seems to have sorted this with a quick phone call but it may take a little longer in real life.
As Harrison is able to put down considerably more money than Fallon, and it is his parents who are providing the loan, Paul Collins, of Belvoir Lincoln, says the couple may wish to purchase as Tenants in Common, rather than Joint Tenants. This would protect Harrison’s greater investment as they would each own a defined share of the property. They need to take financial advice and make sure they are both protected by an agreement if they decide to split and sell the property.
They could also add Harrison’s parents as part-owners but Paul warns this would mean an extra 3% stamp duty to be paid, as the cottage would then be classed as a ‘second home’ for Harrison’s parents.
Problem 3
Buying your rental property should be easy, with no removal fees and a simple change of ownership. But it’s not always the case, as Paul Collins at Belvoir Lincoln explains: “It may seem silly but some lenders insist on ‘vacant possession’ of the property.”
This means they’d have to move out… and then move back in again on completion.
What should they do?
They should clarify this with the lender ASAP. If the lender won’t budge, they could always shop around.
What’s the worst that could happen?
If the couple split up in the future, Fallon could be entitled to half of the property, which means Harrison loses out. And, unless that loan is clarified in writing, Harrison’s parents could lose out, too.
What’s the story?
Always strapped for cash, Emma and Ed Grundy’s home-owning plans seems to be but a pipe dream.
What’s the problem?
Property in Ambridge is at such a premium that when Adam and Ian split up temporarily, Ian had to live in a cupboard.
What should they do?
While their plight is very real – as it is for young couples in areas which have a short supply of property – there are some steps they could take to make owning a home a possibility in the future. They could start a Lifetime ISA with what little spare cash they have or consider Help to Buy.
Finally, after months of moaning about property, Emma has mentioned the possibility of buying a Shared Ownership property, which is something she and Ed could have considered a long time ago.
They should also consider looking further afield to cheaper areas, and not rule out commuting back to Ambridge for their respective jobs. There only seem to be about a dozen children in the village school, so holding on to the kids’ places shouldn’t be an issue.
What’s the worst that could happen?
They remain living with Ed’s parents, Eddie and Clarrie, and eventually turn into a carbon copy of them, just scraping by while Ed takes part in dodgy deals and Emma does all the work. Housing-wise, if Oliver did decide to evict them all because of the illegal sub-letting, they could end up homeless and on a council house waiting list for quite some time.
What’s the story?
After some persuasion, the Bridge Farm Archers – Pat, Tony, Helen and Tom – agreed to sell a plot of land to smooth-talking silver fox Justin Elliott for a cool £1m.
What’s the problem?
Dodgy geezer (and Justin’s love rival) Matt Crawford told Tom the land was worth twice as much. Attempting to punch way above his weight, Tom tried to get more money out of Justin and nearly lost the deal. Dad Tony stepped in and they eventually settled on £900,000.
What should he have done?
Anecdotal evidence is no way to value a property or, in this case, a plot of land. The Bridge Farm Archers should have ordered a survey by a RICS-accredited surveyor so that both parties could agree on a fair price.
What’s the worst that could happen?
You could argue that it already has; The Bridge Farm Archers have ‘lost’ £100,000, although admittedly they never had it in the first place. And there’s still time for the deal to fall through, particularly if things don’t go to plan between Justin and fiancée Lilian, who just happens to be Tony’s sister.
What’s the story?
Lilian’s light-hearted fling with her boss, Justin – who was renting The Dower House from her – turned into so much more when he sent his frosty wife packing and publicly proposed.
What’s the problem?
Where to start? It turns out that Lilian doesn’t actually own The Dower House herself; it’s in a Trust set up by her old flame Matt and she has to ask the trustees if she wants to carry out any major work.
Not only has Lilian been renting out a property that doesn’t necessarily belong to her, Justin is funding an elaborate bathroom refurbishment which he thought would benefit his future wife – and without the trustees’ permission. Oops.
To make matters worse, Justin’s arch-rival Matt is one of the Trustees and the Trust has to agree the terms of any sale, which could scupper Justin’s plans to buy the property back for Lilian. While the two men battle to prove who is the better businessman, there can surely be no winners… and the biggest loser looks set to be Lilian.
What should they have done?
The main issue is that Lilian should have been honest with Justin before he invested thousands of pounds into somebody else’s property, as he stands to lose out financially if he cannot buy the house.
Permission should have been gained for the bathroom refurbishment, although any management of maintenance is probably the responsibility of by the trustees.
What’s the worst that could happen?
Matt has described the Trust as “a bit unorthodox” so there is little point in speculating on its terms but he has said the Dower House can be sold if this is what Lilian wants, with the Trust deciding on the terms of the sale. If Justin buys it (he can afford to, Lilian can’t), Matt has said the money would go into the Trust to benefit Lilian and that he would resign his position as trustee so she’d be free of him forever. But can he be trusted
Whatever happens, if Lilian wants to keep her much-loved home, it looks like she’ll have to rely on one of the men in her life. And if Justin buys the property and they subsequently split up, Lilian could be in a very vulnerable position.
It’s time for Lilian to lift her head from the glossy wedding magazines and seek legal advice.
You can find out more about trusts here and read our checklist:
Kate Faulkner’s top tips for tenants and landlord
What to do if your chosen area is too expensive?
It’s a problem some, but not all people face; they want to stay in their home town, or near to their work place, but can’t afford to buy property there. If this sounds all too familiar, what are your options?
Help to Buy ISA
Save up to £3,400 in your first year and £2,400 thereafter… and the government will top up your savings by 25% when you come to buy a property of up to £250,000 (£450k in London). You can earn up to £3,000 in free money from the government in this way.
Ok, this may not make the difference between buying in a leafy village or not but it’s free money which will help you get on the ladder by boosting your deposit.
Lifetime ISA
Free money again! Lifetime ISAs are relatively new and are suitable for those whose house-buying plans can wait at least a year, as the money will need to remain in the account for 12 months before you can reap the rewards. But if you can wait that long, you can save up to £4,000 a year and receive a 25% top-up from the government each year, too, up to a maximum total of £32,000. The maximum property price is higher, at £450,000, and you can keep the account open to save for retirement. Aged 40 or over? Sorry, you’re told old to open a Lifetime ISA.
Help to Buy Equity Loan
This has proved really popular and means you can buy a brand new home with just a 5% deposit. The government will top up the deposit with a further 20% loan, which is interest-free for the first five years. You can buy a home up to £600,000 (£300,000 in Wales, Scotland and NI are different).
Shared ownership
If you qualify – contact your local housing department to find out – this allows you to buy a share of a property, eg 25%, 50% or 75%, and pay subsidised rent on the part you don’t own. You’ll need a 10% deposit of the purchased share and it only applies to certain properties but it’s definitely worth looking into. Shared ownership can be bought new or existing.
Modify your expectations
This is probably the hardest thing to do of all, particularly if you have your heart set on staying in a certain area, but sometimes compromise is the answer. If you can reconcile yourself that your first property may not be your dream home but something to strive for as you move up the property ladder, househunting should prove a lot easier. Just because you can’t afford to buy in an expensive area now, doesn’t mean you won’t be able in the future.
Ways to compromise include:
