Q & A with Kate Faulkner from LBC Property Hour week 8, sponsored by Direct Line Landlord Insurance

publication date: Nov 18, 2016
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books



Every Thursday I co-host the LBC Property Hour, sponsored by Direct Line, alongside Clive Bull and we have a different guest each week. This weeks guest was property lawyer, Russell Conway.

Download the podcast here.

In case you missed it, here are the Q&As and some more help and advice if any of these issues apply to you:

Q – If I put my two daughters name on my own property can they throw me out?

A – This can be set up so this is not an issue. First thing to do is to get some proper legal advice and get a deed of trust drawn up with the appropriate conditions. Under no circumstances should you convey the property to your daughters without any advice and make sure you consider tax implications.

If you have similar concerns, visit saga.co.uk or contact Russell's firm, Oliver Fisher.

Q – I've got a leasehold flat with London borough council, along with other leaseholders we are in dispute with the council regarding the cost of major works. What are my options on selling the property, could myself and the buyer split the cost of works post sale?

A – Talk to the local agent to find the best deal you can do as it is a matter of negotiation. Any deals with the buyer can be put into contract for sale, but as it is a leasehold property please make sure you choose a good legal company that is expert in leasehold law.

Looking for a letting agent? Read how to choose a letting agent from Belvoir and for leasehold queries visit the Association of Leashold Enranchisement Practitioners.

Q – I'm buying my first house and my mum and dad, who are overseas, are providing the money for the deposit as a gift. I'm self-employed, do I need to declare that on my tax return?

A – You don't need to declare it to the tax man when buying the property so you don't need to worry. However, as with most purchases, you will need to declare it to the mortgage lender/broker as they need to know where the money is coming from for you to purchase the property.

Not sure what mortgage to choose? Read our checklist on how to secure the right mortgage.

Q – I am about to become a landlord for the first time, will I pay tax on whole amount of rent or just profit after mortgage repayments?

A – Right now (October 2016) you can deduct the mortgage interest and finance costs off your rent, but this is expected to change in April 2017 if you are a higher rate tax payer. However, if you reading this after November 23rd, 2016, check what happens/has happened in the budget and subsequent budgets.

Buying to let? Read our expert BTL tax checklist and our BTL finance checklist.

Q – What is malicious damage and what can be done about it?

A - This week on the Property Hour, Christina Dimitrov talks about malicious damage, what to look out for and how to avoid it.

Q – I'm a landlord and have a property being rented out to Slough council, I have had the same tenant for the last seven years, I haven't increased the rent at all, but the property has started to fall into disrepair, and a flood in the flat above means the whole ceiling needs sorting. This really requires around six weeks work with the tenant out of the property. Her contract has expired after which I served a two month notice but she's said she's not leaving. The council told her to wait for formal eviction proceedings leaving me in the lurch, what can I do?

A – Firstly check if there is a negotiable option with tenant? If she is a good tenant there may be a way round things and she could move somewhere else temporarily after all she has been paying you money for seven years. It is a problem that the local authority won't rehouse tenants until they have received a possession order from courts so you may have to commence proceedings if you choose to end the relationship, but after all this time, is there a way you can help her find / fund somewhere else to live rather than incur the costs of eviction?

If you ever do need to evict a tenant, don't forget to read our eviction checklist from Landlord Action.

Q – I've got cash from a house sale following a divorce and I am looking for a good time to get into the buy to let market. Will the triggering of article 50 have any impact and reduce prices making it a good time to buy?

A – Brexit doesn't necessarily have anything to do with property and the timing of when to get in – or out. The most important thing if you want to invest is to first talk to an independent financial advisor. Once you know whether property is a good investment and the tax implications of putting your money, potentially into one basket, then you can make a judgement call.

But, be aware that there have been lots of adverse tax changes to property investment versus financial investment and that you need to make sure it is the right way for you to investment your money.

Need some financial advice? Read our guest article from independent financial advisers Chase de Vere and check out our expert BTL tax checklist.

Q – I'm a student in London and rent is quite expensive but I have savings so is it worth buying a flat and renting out rooms to pay for the mortgage? I don't have an income at the moment.

A – You often need a source of income to get a mortgage. Find a property that you like and think you can afford and then speak to an independent mortgage adviser, it might not work, but it is always worth a try! Always bear in mind though that property is a 15-20 year investment, so if you buy now you may prevent yourself from buying another property in the future wherever you end up living.

Here are some of mortgage broker contacts who can help:

All our information is brought to you by Kate Faulkner, author of Which? Property books and one of the UK's top property experts.
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