Property Investment Advice in Leeds
Why Invest in Property in Leeds?
We often get asked “Should we buy this property?” – and the answer is rarely a straightforward yes or no. Some landlords are motivated by rental income, others by capital growth (in the value of a property), whist others are ideally looking for both. Investing in, and running, a rental property will very much depend on your own motivations, financial set up and experience. Property investment should ideally be viewed as a medium to long term investment rather than a quick fix.
Leeds isn’t just any city; it’s the beating heart of the UK’s fastest-growing urban landscape, boasting a staggering economy of around £65 billion and a vibrant combined population of approximately 3 million. If that doesn’t scream opportunity, we don’t know what does! From being crowned the Sunday Times’ best place to live in the north of England to its thriving rental market catering to professionals and students alike, Leeds is the place to be for savvy property investors like yourself.
Sourcing and Buying Property in Leeds
Now, let’s talk strategy. With demand consistently outpacing supply in Leeds’ rental market, finding your dream investment property might feel like searching for a needle in a haystack. But fret not, because, armed with an extensive local network and insider knowledge, we’re your secret weapon to uncovering hidden gems that tick all your boxes and numbers that stack up. From navigating the ins and outs of property purchases, including the nitty-gritty of limited company setups, to securing the best financial advice and funding options, consider us your one-stop shop for property investment success.
By working with us through our complete “From Buy to Let” package, you’ll have access to the best support garnered from over 25 years of experience.
And if your dream property needs a little TLC, fear not; we’ve got a squad of trusted contractors ready to whip it into shape. Whether it’s a fresh coat of paint or a full-blown makeover, we’ve got your back.For more information, and examples of some of the work we’ve carried out, click here
Getting Your Property Ready to Let
If you’ve bought, or already own, a property to rent out, we’d always advise that you speak to us well in advance of you putting the property up for rental so that we can help in getting it tenant-ready. From the décor to the fittings, fixtures and amenities, there are plenty of ways you can make sure that you’re ticking all of the boxes that a prospective tenant would be looking for. There are also around 180 different bit of legislation you need to comply with before a tenant can pick up the keys; we’ll guide you through this and make sure that you avoid any potential pitfalls.
We also come across growing numbers of “accidental landlords;” people choosing to rent out their own properties which estate agents have struggled to sell, or simply wishing to retain their own home as they have moved in with a partner. If you want to rent out your own home in Leeds, then you need to make sure that any mortgage on the property allows this in order to avoid any nasty surprises down the line. And if you’re in leasehold property you will need to check your leasehold agreements for any conditions attached to renting.
We would always recommend, in the interests of preserving a lower-risk investment and attracting a better calibre of tenant, to go that extra mile when getting your property ready to market. And we’re also pretty passionate about creating thoughtful and well-designed homes for our tenants. We can help you make sure your property is going to stand out – and for the right reasons! Beware Magnolia fatigue and Grannie’s old furniture!
We specialise in interior design and project management and have worked with interior designers such as Amy Wilson (form BBC’s Interior Design Masters) to create stylish rentals that tenants love. From stylish decor to top-notch amenities, we’re all about going the extra mile to ensure your property stands out from the crowd. Say goodbye to bland interiors and hello to bespoke designs crafted to wow even the most discerning renters. After all, it’s the little details that transform a house into a home tenants will love.
Rental Yield Calculator
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Checklist Prior to Renting Your Property in Leeds
If you are already a landlord in Leeds then hopefully you will already be familiar with much of the following, although it’s always useful to have a quick recap;
- Is the property clean, well presented, in a good state of repair, well decorated and, if required, adequately furnished?
- Have you done a basic risk and fire risk assessment?
- Have you got the décor right? Try and keep the property looking bright, modern and neutral. Saying that, a bit of flair can often help; we’re only a phonecall away for design advice.
- Have you arranged a suitable mortgage on the property or advised your current mortgage provider that the property is to be rented?
- Do you have adequate landlord insurance?
- Do you have a gas certificate, electrical certificate, fire alarm certificate and energy performance certificate?
- Does all furniture supplied meet legal requirements?
- If the property is being rented to five or more unrelated people, do you have an HMO license?
- Have you taken meter readings and, where applicable, redirected any personal mail?
- Have you appointed an amazing and pro-active letting agent to help?
HMO Properties and HMO Licensing in Leeds
If you’re the owner of an HMO then we’ve also got you covered. Any property that has five or more unrelated occupiers is likely to require a council issued license to run a larger House of Multiple Occupation (HMO). These HMO Licenses place various conditions on the landlord, managing / letting agent and the property in terms of amenities, safety requirements and property management.
With our wealth of experience managing larger HMO properties, we’ll navigate the labyrinth of licensing requirements so you can rest easy knowing your investment is in safe hands. If you are buying a property that’s going to run as an HMO, then you should ensure that you receive a copy of the current HMO licence prior to exchange of contracts. This copy should include all of the pages of the original document including the ‘Schedule of Works’ which details any improvements that should have been carried out to make the property compliant. Licensable HMO properties will require more investment due to the requirements of HMO licensing as well as the additional wear and tear caused by multiple occupiers. The HMO Licence itself will also need to be renewed every five years by Leeds Council. Again, we can take this over for you.
You can visit the Leeds City Council website for more details on HMO Licencing: www.leeds.gov.uk/Business/Pages/Find-out-about-Houses-in-Multiple-Occupation-Licensing.aspx
Article 4 in Leeds
A relatively new planning restriction, Article 4, came into effect in Leeds in an attempt to curb the spread of HMO properties in certain areas. The result of this is that, where a property has previously accommodated a family or less than three unrelated sharers, a landlord in certain areas of Leeds can no longer rent to three or more unrelated tenants without permission from planners.
This direction – under Article 4(1) of the Town and Country Planning (General Permitted Development) Order 1995, as amended – essentially takes away a property owner’s permitted development rights in certain restricted areas in relation to the number of unrelated occupants. It is then up to the Planning authorities in Leeds as to whether consent for this change of use is given.
If the property already exists as an HMO and the use of the property is therefore not changing, then notification to planning should not be required.
Before purchasing an HMO in an area restricted by Article 4, you should ensure that the property has unbroken historic evidence of being run as an HMO – the easiest way to get this is for the vendor to provide you with a Certificate of Lawful use. We’ve come across a number of solicitors who don’t fully understand the nature of Article 4 restrictions so make sure it’s something that is raised early on in the purchase process.And if this sounds like your solicitor then let us help you get a better one!
Other Rules, Regs and Regulations
There are around 180 different bits of legislation involved in renting out a property. We could list them all here but that would make this the least interesting webpage ever and no one would ever read it. These regulations aren’t fun, they’re often overly onerous on landlords and occasionally some of them are just plain daft. However, they’re all out there, and getting these wrong can be expensive and sometimes dangerous. Ignorance is not an excuse and we’ve come across a number of genuinely wonderful landlords who have been caught out by something of which they simply weren’t aware.
The regulations that are more commonly known deal with safety and safety certs, tenancy deposit protection, right to rent checks (with landlords becomingimmigration officers!), GDPR, and possession rights and legal notices. But there are literally hundreds of others – everything from consumer rights to data protection all falls under a landlord’s duties.
One of our jobs as your agent is to navigate these for you and take away this pain. Because, frankly, you have far better things to do with your time! Think of us as your personal property sherpa.
Landlord Notice to Quit – Section 21 and The Renters (Reform) Bill
Landlords have always been able, once a tenancy come out of its fixed period, to end a tenancy and retake possession of their property through issuing a Section 21 notice. The much-debated Renters Reform Bill, which has limped its way through Parliament over the last couple of years, is finally set to become law. The key headline in this is the abolition of Section 21 and the so called “no fault evictions.” Yay; more new legislation.
In what will be some of the biggest changes to the rental landscape for many years, the Renters Reform Bill will effectively end fixed tenancies. We have campaigned, lobbied, and generally bothered people and, alongside the National Residential Landlords Association (NRLA) and the Leeds Property Association (LPA), have pushed for amendments to the bill which, in its earliest form, would have had some hugely negative unintended consequences, not least for the tenants that the Billl was created to protect. Whilst these amendments will soften the blow (and have finally got the bill through the House of Commons) there will still be significant changes to the rental landscape, tenancy agreements and the process of reclaiming a property back from tenants when the bill finally becomes law.
We’ve unwittingly become something of experts on the Bill and we’ll be working hard to make sure this transition is carefully and correctly managed for all of our landlords.
The Financial Stuff; What are my Tax Implications and Savings as a Landlord?
Everyone love talking about, and paying, tax right? Unfortunately, whether its interest rate relief, changes to the tax benefit of holiday lets or changes to capital gains tax, the tax landscape for property owners is constantly changing and we would always recommend taking up to date advice.
Landlords can still reduce their tax bills by deducting a number of expenses incurred in the letting and management of their properties – although there have been a number of recent changes as landlords have come into the Treasury’s firing line resulting in a number of benefits now being vastly reduced. The following is a brief (but not exhaustive) guide of costs that you may be able to claim against your rental income. Again, we can help you to ensure your not missing anything when it comes to filling in your tax return.
- Interest charges (on mortgages and loan payments to purchase or improve the property); although these have significantly reduced since 2017 and the implementation of the law of Section 24)
- Repairs and maintenance on your property
- Ground rent and service charges (if applicable)
- Letting agency fees
- Accountancy, legal and other professional fees
- Insurance
- Utility and council tax (where paid by the landlord)
- Furniture and furnishings
- Replacement of domestic items
- Travelling costs
- Gardening
- Marketing
- Training and courses
- Safety inspections
- Sundries including advertising, telephone calls etc
You’re Not Alone
There’s A LOT to thing about when embarking on your journey as a landlord and the above is just intended as a brief summary of some of the key considerations. So, whether you are a new landlord in Leeds acquiring your first property, or a seasoned pro who needs some help and advice, you’re not alone in this adventure. The team at Sugarhouse is here to support you every step of the way.
Welcome to the exciting world of property investment in Leeds!
