What should I do as a landlord with my annexe now?
Like so many others on the forum are finding, the recent changes in the property rental market are forcing undesired changes, making it feel like a game of chess when trying to decide the way forward after 35 years of being a landlord.
The latest conundrum concerns a property I purchased from my grandmother all of those years ago, which had a building behind it, which, when built 125 years ago, was a bake house and wash house for the 3 cottages in front of it. My grandmother lived in the cottage and rented out the bakehouse, which she had converted to a small, studio-sized property, calling it the Annexe.
I believe this to be the smallest, detached, occupied dwelling in the UK at 26 square metres, and would be keen to hear from anybody who knows of anything smaller.
Many years ago, after a tenant had left, as they had become unemployed and signed on, it seems that as the council deemed it a separate dwelling, with its own entrance, then Council Tax was payable. Because of this, I was able to legally separate the property into 2 places, despite stiff resistance by the council. So, for 35 years, I’ve kept it in tip-top condition, and it has provided a home for a number of people, most of whom have enjoyed living there, especially the large garden, but now it looks like this is all about to end.
Why? Because there is no sensible way of achieving an EPC of C or above, especially as there are no cavity walls. Somewhere as hot as a bake house didn’t need insulation!
There is a large external wall surface, to small internal volume, and so it very much depends on the tenant and their lifestyle as to whether there is a damp issue or not. At a rental of £550pcm, which seems to be the ceiling for a small property in a low-wage area, it attracts those at the lower end of the social scale, who can’t, or don’t want to, afford to heat the place.
The last tenant, who left today, told me that the internal temperature last week was 16C, and that she was happy with this, and was still drying her washing within the house, which she informed me she had always done, wherever she lived. Needless to say, there was a damp problem.
With Awaab’s Law coming into force for the PRS, I’m in a no win situation, especially as if there was anything that I could have sensibly done, I would have done it by now, and even if there was a possible avenue, with a rental of £550pcm, it makes no financial sense, and even less so as I’m now retired.
So, if I now found a new tenant today, it would be on a 6 month agreement, which would be useless in 5 months, as it would become a rolling tenancy on the 1st May, and so if a tenant was one who creates lifestyle dampness, then I would be legally obliged to fix an unfixable problem, whilst providing alternative accommodation, and potentially fined, and wouldn’t be able to end their tenancy.
Needless to say, I’m not renting the place out again, and in an area where there is a dire shortage of 1-bed properties to rent! So what do I do with the property, especially as it has no mortgage?
As 40 years ago, the place was being used as a workshop on the upper floor, and storage on the lower, I’m looking to turn it back into a workshop, especially so that I don’t have to pay council tax, which doubles after a year, of nobody living there, as I’m having to do on another property whilst I do it up for holiday rental. I presume the very nice kitchen and bathroom will need to be removed, and services disconnected?
If need be, I’ll have it demolished and sell the bricks, which are in demand, but would rather not, especially as it still has the original bake oven in situ.
Has anybody done this sort of thing before, and if so, what is the pathway? I guess that the Planning Dept need to be involved, and doubtless various costs along the way?
Thanks,
Martin
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Member Since October 2020 - Comments: 63
9:53 AM, 18th November 2025, About 5 months ago
How about using it as a holiday let?
Member Since February 2018 - Comments: 13
9:59 AM, 18th November 2025, About 5 months ago
I sympathise Martin, I have long thought of my own property rental business (40 years) as being a four sided game of game chess in which, whenever you feel you are getting on top and take a break to make a cup of tea, the other players all get to put a piece back on the board whilst you are not looking. Shifting metaphors, there are only so many straws you can add on, until your back breaks – and then it doesn’t matter how many of these straws you then remove, your back is still broken.
Reaching for yet another metaphor … One last throw of the dice perhaps? – I think you could offer the property on a longer lease, perhaps 10 years ? I have not yet fully digested all the implications of the new RRA etc but I believe this would step outside of any of the legislation and might work for you ?
Just a thought.
All the best
Jonathan
Member Since July 2013 - Comments: 754
12:19 PM, 18th November 2025, About 5 months ago
One example of the many unintended consequences we will be seeing as a result of the RRA.
In your shoes, I would not go directly to the Planning Dept – instead I would seek advice from a private planning consultant who can review your planning options with you and you can appraise them financially. Only then go the planners and tell them your proposals – this just switches the dynamic and gets you nearer the goal that you want to achieve rather than what the Council wants to see (should your ideas differ). If it’s a Listed Building the Council could be keen to see it preserved.
Member Since September 2018 - Comments: 3524 - Articles: 5
12:40 PM, 18th November 2025, About 5 months ago
can you make it attached to your existing property in some way and organise some kind of shared use – then just get a lodger? Tax free income up to 7.5k per annum. (assuming you still need the income?)
Holiday let a possibility (depends on the LA requirements and if you want to bother)
Student let?
Member Since September 2013 - Comments: 64
1:34 PM, 18th November 2025, About 5 months ago
Reply to the comment left by Reluctant Landlord at 18/11/2025 – 12:40
Thanks for the thoughts. Because of the 3 cottages to the front of this building, connecting would obstruct the rear access to one of them. I have considered this approach. As I live 120 miles away from the property, I can’t claim I have lodger!
Holiday let has been looked at, and not ruled out, as in a holiday/tourist area, but the distance from home (3 hour drive each way) brings about its own set of problems.
This morning I’ve paid £72 for 5 minutes advice from the Planning Portal, who the local Council recommends, who say it should be possible to change it back to a workshop, but will needs a planning application! £’s, £’s, as usual.
Even though the place is small, the Council Tax is Band A, at around £1,800 p/a, so worth the outlay to escape this, especially when it can be doubled, tripled, etc, in future. I read somewhere that in the upcoming budget, they are looking to change Council Tax, so cost is akin to the property value, with a minimum charge of £800 p/a. If this happens, maybe short term lets, so as to cover the overheads?
Some have suggested selling, but as I own it outright, and the land around it, I have no desire to sell, especially as I would end up paying a high % of Capital Gains Tax (Owned 35 years), and I’m not wishing to make HMRC any fatter, whilst losing an asset.
Spoke to the Agent this morning, and she said that they had a 1 bed place to let last week, and there were 138 enquiries for it. Present and previous Governments haven’t thought this through properly.
Incidentaly, I see Shelter are now running their own lottery: https://lottery.shelter.org.uk/ Their heading says: Play to help end the housing emergency. Not even worthy of comment!
Member Since June 2019 - Comments: 781
3:01 PM, 18th November 2025, About 5 months ago
Another possibility could be studio space for an artist or potter. EPC not required if less than 50 sq metres.
A residential can be EPC exempt if it was a listed building, but I suspect this would not qualify, and there are possible threats to this in the pipeline.
Member Since September 2013 - Comments: 64
3:33 PM, 18th November 2025, About 5 months ago
I’ve checked the less than 50 sq/m route a number of times, and although the property is stand alone, and under 50 sq/m, it doesn’t apply to residential buildings. When you read the info, it would seem to be excempt, and I had banked on this at one stage, until told otherwise.
If converted back to a workshop or just a shell, would I still have to pay Council Tax? I was told by the Planning Portal woman, that Mrs Thatcher had said that every building needs to be classified, and that every building should have a purpose. Do I have to demolish to get away from Council Tax?
Member Since July 2013 - Comments: 97
3:46 PM, 18th November 2025, About 5 months ago
I would sell it and give someone else the problem. You’re retired sit back and enjoy it.
Member Since April 2024 - Comments: 3
11:52 PM, 18th November 2025, About 5 months ago
Send me a direct message there are likely ways to achieve the required EPC in a more cost effective way using alternative approach with solar, battery and specialist IWI.
Member Since September 2013 - Comments: 64
9:47 AM, 19th November 2025, About 5 months ago
How do I send you a direct message?