by Charles Oliver BSc MSc FRICS FAAV MEWI FCIArb (Associate Director)

Chancellor George Osborne forewarned of changes to stamp duty on 'second property ownership' in his Autumn Statement in November 2015.

What he outlined was an additional 3% on all property sales that currently attract Stamp Duty Land Tax (SDLT). Seen as a plan to significantly increase SDLT returns it was also viewed as targeting small investors in buy-to-let property and second homeowners.

The government has now released additional information on how the new rules on SDLT will work in practice and announced an open consultation requesting feedback in advance of the 1 April 2016 implementation date.

We now know that after 1 April 2016, SDLT returns will carry a two-stage assessment on property purchases.

• If the purchaser owns just one property at the end of the purchase then there is no additional SDLT to pay
• If the new property is to be the main residence of the purchaser and their other property is being sold, then there is no additional SDLT to pay
• If the new property is the main residence of the purchaser but their 'original' property has not yet been sold, the additional 3% SDLT will be charged but is fully refundable if the first property is sold within 18 months
• If at the end of the day of purchase the purchaser owns, and intends to keep both properties, then appropriate SDLT rates will apply

If the property is a joint acquisition but one of the parties already owns a property then this will be deemed his/her second property purchase and will automatically activate the additional SDLT rule.

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Charles Oliver

Recently, I have been observing the shifting house-share market. It used to be the norm that students shared large properties – houses in multiple occupation (HMOs) – but nowadays the climate has changed and it is professional house sharing that is all the rage, whilst many students prefer to rent purpose-built single occupancy properties.

Professional sharing is on the increase and frequently driven by affordability. Often, young professionals cannot afford to rent a property by themselves whilst saving for a deposit for their own a home. So sharing can be an attractive alternative.

Across the country, advertisements targeting professionals for house or flat shares are increasing –Sheffield, Reading, Liverpool, Bristol – it is not just in London where young workers cannot afford a place of their own.

Websites such as,, and even are an ideal way to advertise for a professional house or flat mate/share. Categories covering extra costs, amenities, current house occupants, new flatmate preferences (for example, singles or couples, pets, smokers) are all included, presumably in an attempt to reduce the 'house-mate from hell' applicant.

From a landlord's perspective, this is an expanding market and hopefully, an attractive one too. This is an older and wiser market than the archetypal student tenant. Supposedly they have more experience andhopefully more self-control, they are working and only partly responsible for paying the total rent. If one mate loses his or her job, presumably their house-mates will replace them with another, more reliable source of income – so it could be a win-win situation for the clever landlord.

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Alan Stewart

"Today, it is even more important for anyone considering investing in a buy-to-let property to do their homework. It can make the difference between a lucrative investment and a disastrous and expensive failure.  Location is always a key factor, whether buying to live in or to let. Always consider market value, rental income and capital growth. Who will let and manage the property? If an agent, the cost must be factored in."

This was the penultimate paragraph of an article I wrote at the end of 2014.

In the intervening three months, the increased level of publicity regarding property as an investment has prompted me to expand on the topic:

Recent reports confirm that tenant demand continues and is outstripping supply. As a result, the buy-to-let sector remains attractive for both larger property investors and first time landlords who, during the

downturn saw their savings diminish in real terms due to low interest rates, poor returns and limited options.

During 2014, buy-to-let was the fastest growing segment of the mortgage market, and as an investment option, there are many advantages.

Tax breaks are available for buy-to-let properties that are denied for private residential house purchases. In addition 'allowable expenses and allowances' permit landlords to offset interest charges on a buy-to-let mortgage against their taxable income. This makes it an even more attractive proposition for investment.

As well as reaping tax benefits and a regular income from tenants, there is the potential long-term gain from capital growth when investing in bricks and mortar – although it should be remembered that property prices can go down as well as up.

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Alan Stewart
Director and head of Residential Lettings and Management

Clarity needed over plans for compulsory tenant immigration checks
by Duncan Reeves

In the recent Queen's Speech, the Government unveiled plans to make landlords legally responsible for checking the immigration status of tenants.

Industry groups have called for greater clarity over the proposals, which could see landlords fined thousands of pounds if thorough inspections are not undertaken.

The move is part of the Government's latest attempt to curb immigration.

At the moment there is very little detail around what these new rules will mean for landlords.

It could be that landlords and lettings agents will have to implement another layer of administration, adding more red tape to the process, which could make renting less efficient and push up the costs for tenants.

However, highlighting any immigration issues is already usual practice for the majority of responsible lettings agents. We already undertake thorough identity checks, including taking copies of prospective tenants' passports as well as work permits and resident visas where appropriate.


Duncan Reeves

Plans to extend the office-to-residential conversion policy by scrapping the exemptions some councils had from the scheme (with effect from 2016), have been revealed by the Government.

Permitted Development (PD) Rights were introduced by the Government in May 2013 with the aim of increasing the supply of housing.

The rules allow office buildings to be converted into residential use without formal planning consent.

This has been welcomed by many as it allows older, low value office buildings to be converted into much needed residential accommodation.

In addition, PD schemes have been a catalyst for the office market as the loss of poor quality office stock may create a lack supply, meaning that new development will be required to satisfy demand.

Caxtons is aware of three 1960s and 1970s local office buildings - one in Gravesend and two in Maidstone - which are currently being converted to residential use.

In London, period buildings that have been used as offices for more than 50 years are being converted into residential space.

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James Roberts

Flood Re unworkable says industry

Update : 24th July 2014
by Morag Keohane Dip CII

It now seems that the Flood Re fund, the scheme designed to ensure properties would not be denied flood insurance is in doubt because government proposals are unworkable, according to the insurance industry.

The draft regulations contain several worries according to insurers, which they say have to be addressed.

The Association of British insurers say the matter is even worse because in their view the proposals might not get regulatory approval as "a sustainable insurance vehicle".

A limit to Flood Re cash flows, in the industry's opinion, are creating impossible problems.

Unless a resolution can be found to the problems, it is estimated that approximately 200,000 homes will suffer massive premium and excess level rises.

According to the industry, the lack of investment in UK flood defences has led to an undermining of their commitment to provide universal flood cover.

It looks likely now that the launch of Flood re-will be postponed beyond its proposed introduction in summer 2015.

It seems that the main problem is Defra's proposal to prohibit Flood re-from adding over £100m in any financial year to public sector borrowing

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Morag Keohane

by: Morag Keohane Dip CII, Insurance Manager at Caxtons

Empty properties have become an unavoidable consequence of today's economic climate, leaving many landlords out-of-pocket as rental income dries up. While a vacant period can be a serious financial blow, landlords need to be aware that insurers view unoccupied buildings as high risk too.

To comply with their insurer's policy terms, landlords must make sure they are doing everything they can to protect and manage any vacant premises. This means assessing the risk for each building and implementing a range of appropriate and relevant security and protection measures.

As soon as a property becomes vacant, landlords should

notify their insurers to prevent any future claims becoming invalid. How much action landlords then need to take will depend on the location and type of premises.

As a general rule of thumb, any properties with a declared value of less than £1 million will need to implement standard non-occupancy precautions. While premises with a declared value of more than £10 million will need to put in place additional security measures.

For those buildings with a declared value in the middle of this range, the preventative action required will be influenced by a range of factors, such as whether the property is an office situated in a city centre or if it's a factory unit located on an industrial park - the latter meaning more precautions need to be taken.

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Morag Keohane