Buy-to-Let in Central London
Buy-to-Let (BTL) in Central London
With a rapidly growing population and strengthening demand for living space, London has seen a significant increase in Buy-to-Let investment and the private rental sector. With the volatility of the stock market, low interest rates, plus London’s international reputation as an attractive and cosmopolitan city, london residential property is still regarded as a safe haven for both domestic and overseas investors.
Growth within the private rental sector (PRS) and better availability of BTL finance over recent years has propelled it into the national consciousness and proved a very popular investment option. This has not been without some controversy as buy to let landlords have been accused of pricing first time buyers out of the market by buying up stock that would ordinarily be secured by them.
Although this may have little relevance in Central London due to the starting cost per unit and where very few first time buyers purchase, this has prompted the UK government to introduce taxation specific to second home buyers and individual landlords by removing some of the tax advantages previously available to private landlords. This change started in April 2017.
The banking crisis of 2007 and mortgage lenders’ subsequent tightening of mortgage lending qualifying criteria (particularly to second homes and investment purchases) has reduced the ability of some to be able to enter the market, and this was tightened up still further in January 2017. Despite these measures, the prospect of a regular rental income coupled with reliable long term capital appreciation has ensured that Buy-to-Let remains a hugely significant component of the property market.
1. Choose the right location
As with any property purchase location is the key consideration. A Buy-to-Let investment requires different considerations compared to buying a property for your own occupation, although some of the factors will definitely overlap. Primarily you need to consider your target tenant market and their requirements. Obvious considerations are proximity to public transport and place of work or study. Equally important is the prospect for future capital growth. Historically Central London as a whole has been regarded as a “safe” prospect for reliable capital growth as it is possible to identify certain hotspots or areas where gentrification is planned or taking place. This is where Hudsons can provide specialist advice on recommended locations within our areas of expertise.
2. Find the right property
This will, of course, be determined principally by your budget. However, along with location it is important to consider the profile of the tenant you are seeking to attract. For example, a student tenant may be less fussy on interior condition than a professional tenant. Also consider the maximum occupancy of the property. As a general rule the greater the occupancy the greater the rent that can be generated, however you need to be aware of each of the Borough Council’s rules on HMO’s (Houses of Multiple Occupation) and Hudsons will be happy to guide you through this. Another very important consideration is the prospect for strong capital growth. Questions to discuss with your agent should include: Is the area on the up or in decline? Are there likely to be any future large maintenance bills that you might be liable for? Are there any restrictions to renting attached to the property?
3. Furnished or unfurnished
This is a question we are asked by most new landlords. Generally speaking we have greater tenant demand for furnished homes as opposed to unfurnished, however this preference does vary depending on the profile of tenant and tenancy type that you are offering. Unfurnished tenants have a tendency to stay longer, so there are benefits to both. Longer term tenants, especially those of two or three year terms, normally prefer their own choice of furniture. Short term lets will invariably require a furnished property, although this method generally attracts more “wear and tear” on walls and furniture.
4. Managed or unmanaged
Along with determining the length of tenancy you are prepared to offer your property for, it is also important to consider just how personally involved you want to be with the tenancy and tenants. Some landlords are quite happy dealing with the day-to-day maintenance, however dealing with the ever changing legislation required by law (there are over 100 of these) and the practical issues that arise within their tenants’ tenancy term require a significant investment of your time.
However, for those that do not have the time or inclination, or those that lack the necessary understanding of property legislation, a fully managed service is preferable, especially as this will normally take care of all aspects of the landlords’ legal compliance. Here at Hudsons our extremely experienced property management team are ready to guide you through the whole process, ensuring that your tenancy is administered under best practise principles and is fully legally compliant. Additionally, we will provide easy to understand statements and invoices produced for tax return purposes, and monitor and chase rent payments where necessary with your rent paid straight into your account, leaving you more time to sit back and relax in the knowledge that Hudsons will take the strain.
5. Be aware of your responsibilities as a Landlord
Recent years have seen a steady stream of new legislation governing the private rental sector to ensure that landlords provide safe and fair accommodation to their tenants and there is no sign of this slowing any time soon. This has added many new and complex levels of responsibility to landlords and it is vital that you are aware of your obligations and responsibilities. The penalties for non-compliance can be severe, including in the most severe instances prison sentences, so it is essential that you fully comply with the law.
Should you have any questions regarding any aspect of Hudsons Lettings and Management Service, or the law relating to residential tenancies, then please do not hesitate to contact our office on 020 7323 2277.
Our experience working with Hudsons was excellent. From our first meeting to completion (which was unusually swift!), we had a harmonious, mutually respectful relationship. We wouldn’t hesitate to recommend them.
We have used the services of Hudsons for nearly 20 years. Robert Burwood, one of the Directors, kept the flat leased for virtually all this time and so, when it came to sale they were the natural choice. The Company has been so impressive that they have been appointed as block managers. Simon Bray was tasked to sell the flat which he accomplished with great professionalism. He worked with both sides and the legal teams to bring the sale to completion. We highly recommend the team.
I have used many estate agents down the years and I have not always been impressed. Hudsons and Simon Bray in particular have been something else.They provided honest , informed advice and maintained excellent communications throughout. They found a buyer in a difficult market (from Singapore) and nurtured the buyer ensuring the sale went through even when things became difficult. They liaised outstandingly well with other professionals on both sides. I am immensely grateful.
I am so impressed by the property management service that Hudson's are providing me with. As it was the first time I was using a property manager for my rental investment I was nervous about who to go to. I am currently living in the US so I wanted and needed a company who were really on the ball and who made sure my tenants were always looked after, if and whenever they had a question or problem. I have come to believe that Hudson's is a highly professional property management company with a very polite and hard-working staff. I would recommend them to anyone looking for help with their rental property.
I take the opportunity of this email just to let you know that Sandrine Locatelli is a great value employee in your agency. She helped me to find my first flat very quickly - and she was absolutely amazing during the last three weeks, in an emergency situation. I complain when I m not happy (french origins) - but I think it's also important to emphasize people's qualities when they're efficient. Great service is high value and she offered me great service, in complicated conditions.
We recently put a bid in on a property but were unfortunately unsuccessful, nevertheless I just wanted to write a big thank you to Margaret and to let the Principal of the Company know how great she was. Throughout the process she bent over backwards to help us, opening the property at various times and was always very knowledgeable and very helpful. She even stayed late one night beyond her finishing time at the property so we could get some measurements done. I was really impressed with her work, and when the time does come for me to buy a property, will have no hesitation in approaching Hudson's first as a result of her efforts. I am really very grateful for all her help.
In the buying, selling and letting of property in London: Covent Garden and Fitzrovia particularly, none can compare to the personal attention of Hudsons. In well over a decade, the wise guidance, knowledge and accessibility of it's founder Jonathan Hudson has been to me a constant. His loyal staff are polite and prompt in response, with Hannah Copues and Sandrine Locatelli impressively informed and helpful with regard to maintenance and lettings; keeping me in the loop at all times. In other words they inspire trust. A vital ingredient if one is unable to be on hand. As with Sherlock Holmes, Hudsons are always on the case.
Unlike any other, Margaret has been professional, transparent, and realistic, in helping me to find and buy a property. She was pivotal in the on-going transaction between me (the buyer), my solicitor and the vendor and his solicitor towards the purchase of the property. As a mediator between buyer and vendor and their solicitors, she was never intrusive but always kept everyone engaged, professionally, a very distinctive feature as most other estate agents tend to be pushy and down right rude! It is people like her who will always shine in your business given most things now can be retrieved from the internet; she has something extra to offer in ways I have described above that an internet website can never do. This survey does not accurately explain the excellent service provided by Hudson’s Margaret Connerty.
I was happy to use Hudson’s as I have lived in the area for many years and so got to know the area and the companies I would wish to do business with and Hudson’s was one of those companies. As they are a local company, and have been here a long time, they know the area and its specific details, it’s history along with its future and character. When you’re looking to sell a property there are so many factors to take into account and Hudson’s did tick all the boxes as far as I was concerned. So I sat back and let them do all the promotion and selling and my flat sold quickly. I have no hesitation in recommending Hudson’s to potential buyers and sellers.
It is my pleasure to recommend Hudsons as a lettings agent for any individual or company searching for the ideal location in the West End for their business situation. As a member of the Finance Committee for a church in Marylebone it was imperative for me to find new tenants for our investment property following the vacation of a long term tenant