Are NEW Landlords Building On Solid Foundations?

Are NEW Landlords Building On Solid Foundations?

12:49 PM, 8th September 2022, About 4 weeks ago

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New landlords continue to enter the UK property market every day, despite reports of many established Landlords exiting.

Are these new Landlords naïve or do they know something we don’t? I think the answer is somewhere in between.

For starters, they don’t have to worry about Section 24 because many of them are advised by their Estate Agents, Mortgage Brokers, Solicitors and Accountants to buy in a Limited Company.

If they are non-resident, the true cost of property in the UK is very low at the moment, even after factoring in the additional 2% Stamp Duty that foreigners now have to pay over and above their UK resident counterparts.

All economies and currencies, both FIAT and Digital, are extremely fragile at the moment, so parking wealth in UK property is regarded by many as a safe bet.

The one thing new buyers do seem to be overlooking though is the importance of building on solid foundations. Forming a UK Limited Company with a very basic ordinary share structure, model Memorandum & Articles of Association, and no Shareholders Agreement is cheap and easy (cost is as little as £12) and it’s also very easy these days to set up bank accounts online. However, this is a bit like building a property on sand. It may look fine for a while but without the proper foundations the consequences of future grief are inevitable.

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