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By Mark Burns

Managing Director, Pure Investor


Is your buy-to-let investment effectively protected?

If you’re a buy-to-let investor or thinking of becoming one, then you may have very mixed feelings about the current state of the housing market.

On the one hand, demand is clearly still very strong. On the other hand, investors may be wary of operating in a politically-charged market.

Here are some points to consider...


Now is the perfect time to assess your portfolio

The stamp duty holiday is due to run until March 31 2021. That’s a decent amount of time for both buyers and sellers but it’s nowhere near enough to waste.

Remember, every stage in the property-buying/selling process will need to be completed according to Covid-19 protocols (at least for the foreseeable future). That has the potential to slow down what can often be a lengthy process at the best of times.

Investors active in the short-let market should be careful

Even before the pandemic struck, the rural staycation market was growing and the city-break market was coming under increasing scrutiny. In a post-Covid-19 world, it’s reasonable to ask just how feasible it will be for people to have short city breaks the way they once did.

Even if they do, there’s likely to be stiff competition from hotels which also need to fill up empty spaces insofar as they can.

Putting all this together, it seems fair to say that investors running short-let property in cities need to tread at least somewhat warily. As a minimum, they should have a clear exit strategy in place.

They should also pay close attention to local news sources as well as national ones. This is because the rules around short-term lets are often determined by local authorities, according to powers granted to them by Westminster.

Effective tenant selection is only going to become more important

The government has already limited the amount landlords can take as a deposit and banned them from charging additional fees to tenants. It has also stated its intention to end the ‘no-fault’ eviction process.

This sounds very reasonable in theory. In practice, however, the reason why the ‘no-fault’ route is so widely used is that the ‘with-fault’ route is slow, complicated and expensive. If the government proceeds with its plan to abolish ‘no-fault’ evictions without providing a workable alternative, then some landlords could be in for a very frustrating time.

The best way for landlords to protect themselves against this frustration is to have a robust tenant-selection process. Be aware, however, that whatever approach you use will need to be demonstrably compliant with the Equality Act 2010.

The key word in that sentence is ‘demonstrably’. In other words, you need to use an approach which will give you a robust defence against any legal challenge from a disgruntled applicant.

Landlord’s insurance could be invaluable

With Covid-19 refusing to go away completely and Brexit due in less than six months, it’s probably fair to say that the UK will be in for some interesting times.

Hopefully, most tenants and most landlords will be able to weather the storm capably. They may weather it more comfortably if they know they have the protection of robust insurance cover.

*Mark Burns is the Managing Director of property investment company Pure Investor


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