Landlord Bank Account for Multiple Properties

by Readers Question

11:31 AM, 11th November 2013
About 5 years ago

Landlord Bank Account for Multiple Properties

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Landlord Bank Account for Multiple Properties

I have a separate bank account to receive rent and pay expenses for my property portfolio (80+ properties).

Up until now my have just used a second current account with my bank. Everything has been fine for over six years but last week I got a letter from the bank saying that I’m using the account for business purposes and they are giving me one months notice before they close the account down. Landlord Bank Account for Mutiple Properties

I have rang the manager at my branch and explained that I did tell the staff at the branch when I opened the account that it was to keep our rental income separate from our personal expenditure etc. He said there were too many properties and this is a business.

We have a business for which we have a business account with another bank.

These are investments as far as HMRC, my account and I are concerned so I was just wondering what anyone else with a larger portfolio did?

Regards

Soni



Comments

Mark Alexander

11:37 AM, 11th November 2013
About 5 years ago

Hi Soni

I have a rent account and a property account with Coutts & Co and these are treated as personal accounts for charging purposes. Coutts share the view of HMRC that my property portfolio should be treated as investments.

However, Yorkshire Bank, which is used for exactly the same purpose for another property portfolio I own jointly with two other partners take the view that it is a business. The accounts we have with them are business accounts.

I have considered moving away from Yorkshire bank to avoid the charges but the hassle of doing so makes it unattractive.

Gary Nock

12:05 PM, 11th November 2013
About 5 years ago

Barclays take the same view as Coutts and HMRC. Property rental is not classed as a business ( which we all know it is but who are we to argue) and so therefore it is a personal account.

I know its a lot of hassle to switch banks but if it saves you a lot in bank charges it may well be worth it.

Mike W

13:12 PM, 11th November 2013
About 5 years ago

Obviously the bank does not want your business so change banks. Inform your current bank that to close the account in one month is unfair and unreasonable as you need at least 6 months to undertake a phased transfer of your investments. If they do not agree advise them that you will incur damages and will seek compensation via the financial ombudsman service.

With my own bank I have a separate current account for each of my properties for some 12 years. But I also have other business with them.

I have a simple view: if someone does not want to provide a service I go elsewhere.

BOB PEARCE

18:45 PM, 11th November 2013
About 5 years ago

The new banking service rules means you can switch accounts in 7 days, including most small businesses. It really is a lot easier now than it was a couple of month ago. A good bank will now monitor your direct debits etc going into your old account and draw them down if someone tried to pay into your old bank. I have just switched back to natwest from HSBC and it went really smooth compared to when I moved banks about 12 months ago.


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