When looking for somewhere to live or somewhere to set up your business office, you must sign an agreement to make the move official.
If you do not buy the property outright then you will be looking to rent a home, property or estate.
‘Let agreed’ means that an offer on a property has been accepted by the landlord or estate management company.
This means that the property is no longer available and no longer on the market. The agent overseeing the transaction then provides the landlord and tenant with the necessary documents to sign.
What is the difference between ‘let’ and ‘let agreed’?
‘Let agreed’ is when the property or estate has had a rental offer agreed on but hasn’t been signed off by those involved.
Once the landlord and tenant sign the accompanying legal documents, then the property or estate in which the deal was successfully agreed – the prospective tenants can actually move in.
The prospective tenant who has made an offer to rent the property to the landlord and agents in order to lease it must agree to the necessary terms and conditions, which can vary depending on what the property will be used for and the history of the property itself.
Often these two statements are found on estate agents signs outside homes, property and land waiting to be rent.
What is the difference between renting and letting?
A landlord ‘lets’ a property to a tenant whereas a tenant ‘rents’ from a landlord or estate management company. Essentially, they mean the same thing , it just depends which side of the transaction you are on.
What is the difference between rent and lease agreements?
With a rental agreement, the landlord provides a tenancy agreement for a short period of time that automatically renews.
Both tenant and landlord can get out of the deal a lot easier through a written notice.
On the other hand, a lease agreement gives the renter the right to occupy the land, property or estate for a longer, set amount of time. This can be from six months to several years.
Under this type of agreement, the landlord cannot increase the price to occupy the property. Rental agreements are frequently subject to change and so it is key to check all legal documents associated with either a rental or lease agreement. The only way in which a price can increase under a lease agreement is if both parties involved agree to it.
Another difference between rental and lease agreements is the fact that lease tenancy do not auto renew and can only restart through a new or updated series of signed documentation.
What does ‘Buy to let’ mean?
‘Buy to let’ is a term that references the purchase of a property for the specific intent of letting or renting that property out once the transaction is complete and all necessary documents are signed.
Once completed the new owner will be on a buy to let mortgage – which is a specialised mortgage loan specifically designed for this agreement. There are a lot more parts to the ownership agreement, that then need to be relayed to any potential and future tenant.
‘Buy to let’ properties are normally homes in residential areas but can also include trading estates, hotels/motels, student accommodation, retail and warehouses.
What are the benefits of ‘buy to let’ properties?
Rental properties have a lot of benefits for potential landlords.
One of the main benefits for a ‘buy to let’ property landlord is that you can receive a regular and stable income from rental agreements, as well as accumulating the wealth that the house will receive as house prices goes up over time in the UK.
Purchasing a house, property or estate in an up and coming area that is set to receive investment and rapid growth are common areas where ‘buy to let’ properties are purchased.
It is common that a landlord will own a series of properties and can even set up a business this way. This will again need to be notified in all official documentation and will need to appear in any terms and conditions that will need to signed by all parties involved.
What are the risks of ‘buy to let’ properties?
Depending on the circumstances around the purchase of the house – if a loan has been used then it can lead to much higher mortgage repayments and insurance.
This will need to be taken into consideration before anything is signed as not meeting the monthly payments can potentially lead to serious legal and economic ramifications for a landlord, their business and any other properties then own (or will potentially own in the future).
In recent years, the UK government have been introducing steps to help protect tenants from landlords who have historically used loopholes in legislation in order to take advantage of them.
The government made large steps towards closing those loopholes and in 2015 they introduced the need for compulsory third party deposit protection schemes and compulsory licensing of homes in multiple locations.
Four major steps were taken to help further regulate the ‘buy to let’ market in the UK.
Autumn Budget 2015 – ‘buy to let’ regulations:
- Accelerated payment of capital gains tax
- Removal of controversial 19% ‘wear and tear’ allowance
- Further regulations around the restrictions in place on tax relief on mortgage finance costs to basic rate tax
- One of the highlights and highly publicised parts of the Autumn Budget included the introduction of an additional 3% surcharge in stamp duty
The UK has suffered from several housing crisis’ in different forms since ‘buy to let’ schemes were introduced in the 1980s. Many economic, housing and governmental commentators and experts have put some of these down to ‘buy to let’ schemes.
The general consensus amongst doubters and opponents of ‘buy to let’ schemes is that it has increased the likelihood of creating a culture of overvaluing houses – meaning that a lot of people nowadays are struggling to get on the housing market.
Other factors such as a vastly increased population, fewer developments of new homes and residential to retail developments across the UK have affected the housing crisis’ over the years.
What does ‘buy to leave’ stand for?
The UK has seen a rise in a number of ‘buy to leave’ schemes – particularly in London. Essentially this is where investors buy houses and leave them empty. They do this so they can benefit from the rise in house prices without the hassle of having tenants.
In short they are used as a short term investment to get a quick return on a property or estate. This is common for overseas investors looking to take advantage of the UK’s rising house prices.