Buying a Leasehold Flat, Guarantors in Tenancy Agreements. Plus Local Authorities Survey Private Landlords Housing Benefit Intentions

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A bit of a quiet week this week, though I was quoted in the FT again: so, with not much news to report, I thought I would offer up some random observations from my working week as a speaker and commentator on the world of buy to let and letting property.

Local Authorities Research Private Landlords LHA Intentions

At last, I see, some local authorities have followed my exhortations and actually gone out and surveyed private landlords to find out their intentions post the new LHA or Housing Benefit changes. I received no less than two surveys in the same day from different London boroughs.

A good start, though in our view both boroughs missed the chance to ask all the right questions and because of the structure of the surveys, some of the survey results may be ambiguous. Still, the fact that the councils have done the surveys is better than sitting there wringing their hands and trying to second guess what landlords will do.

Why I Don’t Buy Flat Conversions in Single Block Victorian Houses with More Than One Other Flat

When I do speaking engagements the two things I get asked about most are problems with leases on flats and problems of tenant guarantees.

Looking at leases, if you have read my book you will know my views on these already. Buy the Book at Amazon

I say in the book that ……whilst many lease arrangements work just fine, in nearly every newspaper there is a column in the property supplement where frustrated leaseholders (and some freeholders) seek advice from the paper’s solicitor on how to solve some problem or other with the working of their lease. Their questions are usually about how to get a freeholder or managing agent to do something they should be doing anyway, how to stop other leaseholders from doing things they shouldn’t, how to extend a lease, buy the freehold or take over the management. The fact is there are quite a few flats – especially conversions – where the building is managed badly. Typical problems are noise, crumbling exteriors and filthy common areas. Given that the law on leasehold has changed frequently in the last twenty or so years suggests it needed fixing. Things today are better than they were, but for many leaseholders there are still problems.”

Most of the queries I get are from frustrated leaseholder and co-freeholders of flats which are in single block properties that have been converted from a large house or small commercial building into flats.

All too often the leases on these types of properties are badly drafted and there is no mechanism for collection of service charges or even insurance or for doing maintenance.

Enforcing your rights can be hard and time consuming and this is the reason why, as a landlord, I never now even bother look at buying flats in these types of conversions. And there are many investors and leasehold experts who share my view.

But If You Must Buy One……

Of course, I fully appreciate that, due to financial constraints, for many first time buyers and investors there is no option but to buy a flat in a Victorian or Edwardian conversion block.

If this is you, then try to buy one where there is just one other flat in the block (preferably with an amenable owner who is not mad) because you will at least have a starting chance to put things right if there are problems. If you have to get three or more other leaseholders (some of whom will inevitably be absent landlords) on your side it gets a lot harder to get the freeholder or other co-freeholders to join in actions with you or get anything done.

If you are thinking of buying this type of flat, your priority even before you move ahead on the legals is to get hold of and scrutinise the lease first. Find out how long there is left on the lease (amazingly many estate agents won’t even know which is kind of stupid as it has a huge bearing on price), how many other flats are in the arrangement and what the arrangements are for collection of service charges and doing maintenance work.

If you don’t like the answers you get, then avoid! And if you need more advice on leasehold and freehold, there is a small section in my book. Plus, you really also should get in touch with “Lease”, the Leasehold Advisory Service at

Also look at  Leasehold and Freehold which is an article where we look at why extending a lease is often better than buying the freehold.


The large and rapidly increasing number of queries I get about guarantors is a sure sign of the recession. As recession bites, more tenants will find it hard to prove an income to a landlord and therefore need a home owning guarantor to say they can play the rent in event the tenant can’t.

But signing up a guarantor is an area that is fraught with problems for landlords. You can all too easily make a muck-up of the guarantor process which means you cannot actually enforce the guarantor’s guarantee! In other words, the guarantee is worthless.

We will look at this again in a forthcoming blog post but you may find this short article useful at our website:

House Share Rents Appear to be Down

According to the latest data rents are up overall but anecdotally we have noticed that the rent level for rooms in shared houses are more down than up, at least here in London.

This is another sign of recession and one we think that is caused by people who may have lost their jobs turning to letting out a spare room in their house (which is tax free up to £4,500 per annum.)  The extra supply is driving these kinds of rents down.

I would expect to see this drive down rental levels on HMOs and student accommodation. Next Property Investment Seminar and Networking Event

MORE ABOUT LETTINGFOCUS AND WHAT WE DO is the home of Private Rented Sector and Landlord Information.

I’m David Lawrenson, a landlord and property investor myself for over 25 years and author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 25,000 copies sold.

Services to Businesses and the Public Sector

Primarily I am a consultant to a range of organisations including banks, local authorities, social housing providers, institutional investors in the private rented sector and insurers – helping them with their landlord facing or buy to let product strategies and services.

For example, I help banks improve their buy to let mortgage lending practices and I help housing associations / local authorities by advising on LHA issues and finding private landlords (private rented access schemes, local letting agency models etc.) I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor. We pride ourselves on giving independent unbiased Buy to Let Advice on a one-to-one mentoring / coaching basis or through our (very occasional) group seminars.



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