Landlords like long term tenants

Whether you’re a seasoned investor or about to embark on your first buy-to-let property, the value of having good long-term tenants can never be under estimated. However, getting such tenants is not always simple, nor is it easy. Landlords can suffer from a high turnover of unsuitable tenants and the time and effort taken to replace occupants can be expensive. The ideal scenario is to have long-term tenants for your property who you can trust and get on with well.

What are the benefits?

The primary benefit of having long-term residents is that it establishes regular income from the property (negating any vacant periods where you won’t earn) and saves you the hassle of constantly advertising for prospective tenants. Furthermore, having a lower turnover of people living in your property means less chance of encountering a bad tenant, for example, one that neglects the house and causes expensive damage. Adding to this, you will not have the cost of cleaning and redecorating the property after each tenant moves out too.

Landlords should read on…….

Unless your mortgage is already fixed for the long term, this week’s interest rate rise, following hot on the heels of December’s, is likely to have given you cause for concern. About 2 million borrowers are on variable rate deals of some kind, and many have already seen an increase in their repayments following the last base-rate rise. Thousands more are on fixed-rate deals that come to an end over the next few months.

With other living costs rising, re-mortgaging might be a good bet. Some people will be able to save more than £200 a month, or in excess of £2,000 a year, just by making a fairly simple switch.

Mortgages are the one aspect of good news here, because there is still something you can do about the cost. You can ease the pressure elsewhere by taking appropriate action.

What “appropriate action” is, will depend on your circumstances, but you should, at least, start with a look at your current situation and consult an independent broker.

Landlords are being selective

Buy-to-let (BTL) landlords are increasingly targeting smaller towns to buy properties in, according to a recent analysis.

According to the bank’s data, aside from London and Manchester, completions during 2021 were highest outside the UK’s major city centers, in “secondary towns and cities.”

Completions in Milton Keynes spike 667% in 2021, compared to the previous year, while completions in Bristol increased 300%.

Completions in Manchester and Luton increased 300% and 258%, respectively.

They also accelerated substantially across Plymouth, Stoke, Northampton, Cardiff and Nottingham, where they spiked 183%, 157%, 133%, 70% and 64%, respectively.

In London, BTL completions increase 95% over the year.

Landlords are changing

If you are considering creating a limited company to run your buy-to-let properties, you are not alone. It’s becoming a popular option for landlords, but there are also some elements which may need consideration first.

Investing in property through a limited company has become a popular choice for many landlords. According to research by estate agency Hamptons a total of 41,700 new limited companies were set up for buy-to-let businesses, an increase of 23% on 2019.

The growth of limited company buy-to-lets looks set to continue, but is it right for all landlords? Let’s look at some of the factors you need to weigh up when considering such a decision.

Tax benefits

Landlords operating within a limited company are able to claim 100% limited company mortgage interest relief and benefit from a lower rate of Corporation Tax, rather than Income Tax, on profits.