Case study: The landlord who expanded using buy to let gearing

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Case study: The landlord who expanded using buy to let gearing

For landlords, growth often depends on using gearing – borrowing against equity in existing properties to fund further acquisitions. In 2025, with property values stabilising and lenders reintroducing more competitive products, gearing remains one of the most powerful tools for portfolio expansion. This case study illustrates how one landlord used refinancing and sensible leverage to double their holdings, while also highlighting the risks of stretching too far.

Meet the Landlord

Our case study landlord owned three terraced houses in the North West, purchased between 2014 and 2017. Each property had appreciated significantly in value, with strong rental yields relative to purchase price. The landlord wanted to expand but lacked the liquid capital for further deposits.

The Expansion Challenge

Although the landlord’s equity position was strong, cashflow was under pressure as older fixed rates were expiring. Refinancing was necessary both to stabilise payments and to raise funds. The questions were:

• How much equity could be safely released without over-gearing?
• Which properties should be refinanced first to maximise affordability?
• Would lenders support the expansion given portfolio size and experience?

The Restructuring Plan

Working with a broker, the landlord created a staged refinancing plan:

• Step 1: Refinance the highest-yield property at 75% LTV, releasing £40,000 of equity.
• Step 2: Refinance the other two at 70% LTV, releasing a further £55,000.
• Step 3: Use the £95,000 released as deposits on two additional properties, maintaining gearing at a sustainable level.

The broker ensured five-year fixed products were used, which were tested at pay rate rather than inflated stress rates, making affordability more achievable.

The Outcome

The landlord doubled their portfolio from three to six units within 12 months. The strategy delivered:

• £95,000 equity unlocked without selling any properties.
• £16,000 annual increase in rental income across the expanded portfolio.
• Improved cashflow stability through five-year fixes, protecting against further rate rises.

Although monthly repayments rose due to higher borrowings, the rental uplift more than compensated, creating a stronger long-term position.

Lessons for Other Landlords

• Use gearing strategically – focus on refinancing properties with strong yields and growth potential.
• Sequence refinances – start with high-yield units to build affordability headroom for weaker ones.
• Balance risk and reward – higher gearing accelerates growth but increases vulnerability if rates rise or rents fall.
• Plan for contingencies – maintain liquidity buffers for voids, repairs and unexpected rate changes.
• Think long-term – gearing should build sustainable income, not just short-term capital extraction.

Risks of Over-Gearing

While gearing is powerful, over-leverage has been the downfall of many landlords. Risks include:

• Cashflow pressure if rates rise or rents stagnate.
• Reduced refinancing options if LTVs are too high when fixed deals expire.
• Vulnerability to valuation dips, which can trap landlords on reversion rates.

In 2025, most lenders cap LTVs at 75% to guard against these risks. Landlords should take this as a signal to avoid pushing too aggressively.

Final Thoughts

Buy-to-let gearing remains one of the most effective ways to grow a portfolio. Used responsibly, it can transform equity on paper into additional income and long-term wealth. The key is to approach it with discipline: understand lender rules, stress-test cashflow, and plan for both good and bad scenarios. The landlord in this case study expanded sustainably because they geared strategically, not recklessly.

Speak to Our Sponsor

Our sponsor works daily with landlords to structure refinancing plans, release equity and use gearing to fund expansion. They can help you model how much equity can be unlocked safely and which lenders support your growth strategy.

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Publication date: Monday, 8 December 2025

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Rachel Reeves faces £7,550 bill to upgrade EPC rating on her rental home

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Rachel Reeves faces £7,550 bill to upgrade EPC rating on her rental home

The Chancellor Rachel Reeves is facing a £7,550 bill to improve the energy performance of her London home under Labour’s tougher EPC rules for private landlords.

The Daily Telegraph reports that her four-bedroom property in Dulwich is rated D, falling short of the requirement for all new tenancies to meet EPC C by 2028 and all lets by 2030.

The rules, introduced by Ed Miliband, mean her family home risks falling foul of legislation unless she pays for recommended upgrades.

An EPC report for the house, seen by the newspaper, outlines a programme of works costing between £4,900 and £7,550.

Labour’s red tape burden

Conservative Party chairman, Kevin Hollinrake, said the Chancellor’s latest predicament underlines the pressure created by Labour’s climate strategy.

He told the Telegraph: “Rachel Reeves finds herself in yet another sticky situation of her government’s own making.

“Ed Miliband’s reckless dash for net zero means Reeves now faces a £7,550 bill to bring her property up to an EPC rating of C.”

He added: “This is indicative of the growing burden of red tape Labour is piling onto landlords across the country – driving up rents and reducing supply.”

List of EPC improvements

The EPC improvement suggestions include thicker loft insulation at an estimated £100 to £350 and removing flooring to install new insulation at £800 to £1,200.

Fitting solar water heating, typically costing £4,000 to £6,000, is also recommended.

If completed, these steps would move the property from a score of 64 to 70, taking it into the C band.

However, the projected savings are modest with annual energy bills being cut by roughly £300.

That means the Chancellor’s investment could take around 25 years to recover.

Reeves failed to license home

It is the second time in recent months that Reeves has faced scrutiny over her rental home.

In October, she was found to have breached housing rules by failing to obtain a selective licence from Southwark Council after letting out the property when she moved into No 11.

The Labour-run authority waived enforcement action, despite previously prosecuting private landlords for the same offence and penalties can reach £30,000.

Rent inflation driven by costs

The National Residential Landlords Association’s Chris Norris warned that many landlords face similar costs with little financial support to carry out the work.

He said: “The government has been slow to recognise the economics of private renting when it comes to energy efficiency measures, and the fact that rent inflation is driven largely by landlords’ costs.

“Even if these costs are not her primary concern, we would encourage the Chancellor to focus on the effect that these upfront costs will have on the cost of living for renting households.”

The former energy and net zero minister, Miatta Fahnbulleh, said the shift to EPC C by 2030 is intended to ‘reduce the number of fuel-poor households in England’.

She added: “Ensuring warmer, healthier private rented homes will lift many families out of fuel poverty and reduce energy bills.”

Industry estimates suggest landlords may face a combined outlay of around £36bn, and that the entire rental stock is unlikely to reach EPC C until 2043, 13 years beyond the government’s deadline.

Lenders are also warning that some landlords could choose to exit the market or remove homes from long term lettings, increasing eviction risk and further tightening supply.

The Chancellor’s spokesman was approached for comment by the Telegraph.

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Dear 30-Year-Old Me: The Tightrope Between Wealth and Life

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Dear 30-Year-Old Me: The Tightrope Between Wealth and Life

You already know how to create and multiply wealth, that won’t ever be your problem.

While others are chasing stable income and luxuries, you’ll already see the bigger picture: how time and debt can be transformed into equity, how every £1 million borrowed today and sensibly invested into properties with strong capital appreciation prospects becomes £million’s in equity in the decades that follow. You will be patient enough to hold your nerve and manage properties and tenancies in a way that transforms your houses into other people’s homes. That alone will be rewarding, but the excitement of building that empire will not be enough. You’ll balance risk like a mathematician, confident, precise, relentless, and it will work out in the long run.

You’ll help Mum and Dad retire early. You’ll hear their stories of their winters in Florida, laughing in photographs they’ll send while you work late, replying with pride and exhaustion.

You’ll pay for the whole family to go to Disneyland, cousins, nephews, nieces, everyone. It will be a holiday that becomes a legend in family stories. They’ll send you videos of the parade, your niece waving. You’ll smile at the screen, then turn back to your email Inbox, because whilst they’re riding the rollercoasters you will be at home responding to the constant ping of messages from your BlackBerry phone.

When your daughter turns six, you’ll pay for her to visit the ‘real’ Santa in Lapland. She’ll fly there with her mum, bundled in new snow gear you paid for, believing it’s the most magical trip in the world. She’ll remember the sleigh rides and the cold air on her cheeks for the rest of her life, but she won’t remember you being there, because you weren’t. You were working, always working, convinced that paying for the dream was the same as living it. The only time you won’t be working is when you’re sleeping, night or day, wherever you’re too exhausted to even contemplate doing anything else.

You’ll miss your daughter’s school plays, her parent evenings, even the little victories she’d wanted to tell you about in person when you picked her up from school in your Ferrari, all because you were too busy talking to people at the office on your car phone. You won’t hear the applause at the end of her performance at the school play, or see her scanning the crowd for your face. You’ll tell yourself it’s temporary, that you’re building a future for her, that one day she’ll understand, but all she will remember is the empty seat in the crowd where you were supposed to be.

It’s not guilt you’ll feel years later, it’s sadness. The kind that comes quietly, when you realise the people you worked hardest for just wanted you.

They weren’t jealous of your generosity to your family or work colleagues. They were jealous of your attention.

Your first marriage will end gently. Not much shouting, no villains, just distance. You’ll divide a life built on good intentions and too little presence, and it will take you years to understand that your absence grew from a festering bad habit and false beliefs. You were trying to protect your family with money when what they needed was time.

In the years that follow, something remarkable will happen: you’ll rebuild, you will learn to love again, but this time it will be very different. You’ll have learned the value of attention and what it actually means to your loved ones. You will still do plenty of travelling, but you won’t be looking at your phone every time it pings because the pings will be silenced during the scheduled quality time you’ve pre-agreed. You’ll have realised that love isn’t about sharing wealth, it’s about sharing your presence. You will have been happily remarried for 13 years, and as a result of engaging, you will have acted on the wisdom shared by your wife, whereas previously you were more likely to be dismissive of living and learning from those beautiful moments because you believed work-related issues mattered more. Emotionally, you will have transformed without realising how you got there.

You’ll have helped your brother grow a business, guided your stepson and his partner through their first renovation, supported family abroad through hard times, and you’ll actually have been there as opposed to just paying for it. That’s what they will remember most, because it’s what matters to them.

Work will still matter, but life will mean more.

Your son-in-law, who you will never have met, will be a finalist at the Property Investors Awards. You will see pictures on Social Media of properties you purchased, but went to your ex-wife as part of the divorce settlement, repurposed as modern AirBNB’s by your daughter and son-in-law. You will see your grandaughter you’ve never met presenting those properties on video’s posted on Social Media, and you will feel proud and sad at at the same moment.

One day, in your late 50s, you’ll be sitting by a pool, a glass of wine in hand, and realise that living the good life was never about wealth alone. It was about being able to stop, to breathe, to show up, and to stay. You’ll wish you could reach back across the decades to tell that younger man one thing: “You will always be able to build successful businesses, but you’ll never remake the moments you missed.”

So stop. Look up. Go to the play. Take the trip. Be in the photograph.

The business will wait, the memories won’t.

Your older and wiser self.

Why I’m sharing this so openly

I’ve thought long and hard about whether to share this publicly.

Part of me hopes that one day my daughter, her family (and even my ex-wife) might read it and understand that none of what I built was ever meant to come at their expense. The truth is, I’ve made my share of mistakes, and I’d rather those mistakes serve some purpose than just sit quietly in memory.

I’ve always believed it’s better to learn from other people’s experiences than from your own regrets. That’s why I’ve chosen to write and publish this letter to my 30-year-old self, to give others a chance to pause, to recognise the patterns before they harden, and to make changes while there’s still time.

If sharing my story helps even one person step back from the treadmill, reorganise their affairs, and reclaim the moments that truly matter, then it’s worth every word.

The financial side of what we do at Property118 is obviously an important aspect in all of this too; restructuring, succession, planning for freedom rather than obligation, but the real goal is to create time to live, because wealth alone can’t make life rich. Only time and attention can do that.

Please reflect, comment on, and share this article. As you can see, I’m an open book and wear my heart on my sleeve.

However young or old you are, please use whatever time you have left to build the life that you and your family really want and deserve. I recently lost a very dear friend (Mike Woodfine), he was just 66 years of age and had retired only three years ago. The weeks since his passing have been a period of reflection and mourning that finally pushed me to write this article, which has been on my mind for far too long. Mike’s illness was diagnosed just three weeks before he died. We never know how long we’ve got left.

If you need some help to reorganise your business affairs in a way that provides the time and cashflow you deserve to be able to share, I’ve built a team of consultants to assist you. Our consultancy doesn’t only cover retirement, business continuity and legacy planning. It can also help you understand options and opportunities that you may be blissfully unaware ever existed, or simply overlooked or wrote off, and which could enable you and your family to live the rest of your lives without regrets. It’s only too late to fix things when you’re gone.

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The mortgage consent mistake that put a landlord at risk

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The mortgage consent mistake that put a landlord at risk

The landlord had a standard residential mortgage but decided to let out their property when work took them abroad. They assumed the lender wouldn’t notice and went ahead without seeking consent. When the lender carried out a routine check, they discovered the property was tenanted. The landlord was in breach of their mortgage terms, exposing themselves to the risk of repossession and immediate demand for repayment. The tenants, meanwhile, were left anxious about their security of tenure.

Lenders treat letting without consent as a serious breach. Some allow temporary “consent to let” arrangements for a fee, while others insist on switching to a formal buy-to-let mortgage. Ignoring this step places landlords in jeopardy, as insurers may also refuse claims if the property is being used contrary to mortgage terms. In this case, a simple phone call to the lender could have prevented a high-stakes compliance risk.

The lesson is clear: landlords must align lending arrangements with letting intentions. Mortgage conditions are not optional, and assuming no one will notice is a gamble that risks both property and financial stability.

What do you think?

Have you ever had to seek consent to let from your lender? Did you find the process straightforward or restrictive?

Source: MoneyHelper: Consent to Let explained

Previous articles in this series

Landlord Lessons: The AST date mistake

Landlord Lessons: The missing inventory

Landlord Lessons: The verbal agreement trap

Landlord Lessons: The gas safety lapse

Landlord Lessons: The unprotected deposit

Landlord Lessons: The unlicensed HMO

Landlord Lessons: The electrical safety lapse

Landlord Lessons: The Right to Rent slip

Landlord Lessons: The ignored repair

Landlord Lessons: The insurance blindspot

Landlord Lessons: The rent-to-rent risk

Landlord Lessons: The Section 21 error

Landlord Lessons: The Section 8 misstep

Landlord Lessons: The selective licensing oversight

Landlord Lessons: The EPC blindspot

Landlord Lessons: The rent increase mistake

Landlord Lessons: The service charge shock

Landlord Lessons: The tax record slip

Landlord Lessons: The guarantor gap

Landlord Lessons: The referencing shortcut

Landlord Lessons: The pet clause oversight

Landlord Lessons: The fire safety lapse

Landlord Lessons: The legionella neglect

Landlord Lessons: The asbestos surprise

Landlord Lessons: The DIY eviction disaster

Landlord Lessons: The rent collection chaos

Landlord Lessons: The repair retention row

Landlord Lessons: The unserved notice oversight

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I think my Airbnb guests were strippers and now I have a glitter problem

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I think my Airbnb guests were strippers and now I have a glitter problem

I have been an Airbnb host for about six years, and I thought I had seen everything. I was wrong.

I recently accepted a three-night booking from three young women. They looked perfectly normal on their profile. Nothing unusual. The messages were polite, check-in was smooth, and I did not give them a second thought.

The first sign that something odd was happening came from the neighbour. She asked me, in that half-concerned and half-nosy tone that older neighbours do so well, whether I knew the guests were “working nights”. I asked what she meant. She said she had seen them leaving the property at around eleven o’clock, wearing full evening wear. Not the sort of outfits anyone wears to go to Tesco.

I brushed it off at the time. Some people go out clubbing midweek. It is not my business.

The second sign came from my cleaner. She sent me a voice note the following morning, saying she could not get inside because “they are still getting ready for work”. At that point, I thought my neighbour must have misinterpreted something, because who gets ready for work at half eleven in the morning after coming home at four?

Then the third sign arrived, and this is the one that made everything click. One of the guests messaged me asking if I had any spare full-length mirrors because they “needed them for rehearsals”. I told them I did not. They said not to worry, they would improvise.

By now, I had built a fairly accurate picture of what they were doing, but they were tidy, polite and not causing damage, so I convinced myself to leave it alone. If they chose to live that way, that was their business.

The real problem happened after they checked out.

My cleaner rang me, sounding exasperated. She said the place was spotless except for one thing. She said the carpet looked like someone had exploded a craft shop inside the living room. I went over to see it myself. She was not exaggerating. There was glitter everywhere. Embedded in the carpet, stuck to the curtains, wedged in the skirting boards.

I vacuumed, she vacuumed, we tried sticky rollers, we tried a carpet brush, we tried duct tape. It barely made a dent. Every time we thought we had cleared it, we walked across the carpet and our shoes lit up like disco balls.

I cannot list the property again until it is resolved.

My question: Is there any vacuum cleaner on earth that actually removes glitter from carpet, or am I looking at a full replacement?

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Landlords blast selective licensing scheme as anger grows after first year

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Landlords blast selective licensing scheme as anger grows after first year

Angry landlords have hit out at their town’s selective licensing scheme, a year after it was introduced.

They accuse the council of creating higher rents, driving evictions and worsening local housing pressures, Teesside Live reports.

The five-year scheme, covering central Stockton, north Thornaby and Newtown, has issued more than 1,400 licences since its launch.

Landlord opposition was clear long before the rollout, with only 3% backing the plans in the council’s 2024 consultation.

Now, a one-year update on the scheme at a Safer Stockton Partnership meeting led councillors to praise the scheme’s impact.

Dick Turpin wore a mask

One landlord argued the policy completely misunderstands the realities of the sector, saying “we are not babysitters and cannot control how tenants conduct their lives”.

Another warned they would “just sell my properties” in response.

Several landlords say the scheme has backfired, with one calling it an “own goal” and an “exercise in futility”.

Others were even more blunt with a landlord saying: “Selective licensing is just a cash cow for the council. At least Dick Turpin had the decency to wear a mask.”

Stockton’s licensing scheme criticised

Other landlords have highlighted how the scheme has caused “real and lasting harm to the community”.

One said: “Lots of tenants have been evicted because of the new schemes. Well done Stockton Council! Another self-induced own goal.”

Some argue tenants are the ones paying the price with rents going up to pay the license fee.

Another landlord said: “The licensing scheme is a joke. Total waste of time. The scheme is a disgrace. Four years to go, then it will end, thank God.”

Landlords are selling up

Frustrated landlords also highlighted the scheme’s impact with one stating: “Landlords are selling up and evicting tenants. We now have more ‘low housing demand’ in the area than before, but that was why the council brought the scheme out, saying they would solve it.”

However, it’s not just landlords who are unimpressed; tenants aren’t too.

One reportedly said he is “fed up of getting knocks at the door” from officers.

He added: “They think they are helping us tenants. Well, I have a message to them, ‘no you aren’t, leave me in peace, I don’t want you round and you’re not coming in.’”

He also criticised the language used around inspections, saying officials should “show greater respect.”

Council praises licensing

The council insists the licensing scheme is delivering what it set out to do.

Councillor Richard Eglington, cabinet member for regeneration and housing, told the news site: “Before the implementation of selective licensing in central Stockton, north Thornaby and Newtown, the council consulted extensively with landlords, managing agents and those living in the proposed selective licensing areas to seek views on the proposals.”

He added that ‘all feedback’ was considered before its introduction and he insists that the scheme is working by improving the condition and management of private sector housing, with ‘positive outcomes’ for landlords and tenants.

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Beat the crackdown! We’ll get Your Properties Sold Fast for the maximum amount of Cash in the Bank

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Beat the crackdown! We’ll get Your Properties Sold Fast for the maximum amount of Cash in the Bank

Thousands of us are getting ready to sell as the government warns landlords they could face fines of up to £40,000 under the Renters’ Rights Act.

With less than 28 days to go until the start of the New Year, many landlords are looking for a quick way out.

With the new changes just around the corner, every delay could cost substantial equity. Landlords simply can’t afford to be stuck waiting months, or even years, to sell their property. For landlords like Shauna, who had to wait eight years to sell 14 properties, turning to Landlord Sales Agency helped her finally exit her portfolio.

After almost a decade of trying to sell the properties by herself through various different channels, the moment Shauna contacted us she was able to sell the remaining 23 properties of her portfolio in under 16 days.

Shauna says she was shocked at just how fast we were able to find a buyer and all for the best price possible.

In fact, we help hundreds of landlords every day, like Shauna, get a quick sale and cash in the bank before the New Year. Whether it’s single buy-to-lets, chunks of them, a few at a time or whole portfolios, we have the best team in the UK who know exactly what it takes to get your properties sold.

With our private database of over 30,000 buyers, the top property buying companies, private funds and first-time buyers, we generate a bidding war that pushes your properties to the highest prices. What’s more, we manage the entire process, allowing you to sit back and relax – no need to worry about managing the details.

We have a 100% success rate in selling tenanted buy-to-lets and a solid network of solicitors who can help with evictions, paying tenants to move out, or raising rents to make properties more appealing to buyers.

We can also help with refurbs and, in some cases, even pay for them so you can get a higher price. But what landlords really love us for is that we’re fast. Super fast. It’s why so many landlords per month are coming to us, and we’re delivering.

All our properties sell on average in just 28 days for up to 90% market value, and for that, we cover all the costs and take away all the hassle that comes with selling the portfolio. We’re completely transparent, so you know exactly what we’re making.

We’re experts at overcoming every single obstacle, be it tenant issues, selling with tenants in situ, evictions, or properties in difficult conditions. There’s absolutely nothing stopping us from selling your properties.

In fact, we’re so confident, contact us now and find out for yourself if we can get your properties sold for a price and timescale you’re happy with. Chances are we’ll beat it.

So if you want to start 2026 the right way, with cash in the bank and peace of mind, you’re all set to move on to safer investments. Contact us today.

We know exactly what’s needed. Our team is ready. And we’re here to get the job done.

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The unserved notice oversight that derailed a possession claim

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Property118

The unserved notice oversight that derailed a possession claim

The landlord filed for possession after months of arrears, confident the paperwork was in order. But when the case reached court, the tenant’s solicitor argued that no valid notice had ever been served. The landlord had posted a Section 21 notice but had no proof of delivery, and the tenant denied receiving it. The judge struck out the claim, forcing the landlord to start the entire process again. By the time a new notice was served and the case reheard, the arrears had doubled.

Serving notice is not simply about completing the right form. Landlords must ensure the notice is delivered and can be evidenced if challenged. Acceptable methods include personal delivery, recorded post, or using a process server. Some tenancy agreements specify service methods, but without proof, landlords are exposed. In this case, the absence of evidence cost months of rent and additional legal fees.

The lesson is clear: possession cases collapse without procedural precision. Notices should always be served in a way that provides indisputable evidence. Landlords who cut corners risk losing time, money, and credibility in court.

What do you think?

How do you serve notices? Do you rely on recorded delivery, personal service, or professional agents to remove doubt?

Source: Gov.uk notice service guidance

Previous articles in this series

Landlord Lessons: The AST date mistake

Landlord Lessons: The missing inventory

Landlord Lessons: The verbal agreement trap

Landlord Lessons: The gas safety lapse

Landlord Lessons: The unprotected deposit

Landlord Lessons: The unlicensed HMO

Landlord Lessons: The electrical safety lapse

Landlord Lessons: The Right to Rent slip

Landlord Lessons: The ignored repair

Landlord Lessons: The insurance blindspot

Landlord Lessons: The rent-to-rent risk

Landlord Lessons: The Section 21 error

Landlord Lessons: The Section 8 misstep

Landlord Lessons: The selective licensing oversight

Landlord Lessons: The EPC blindspot

Landlord Lessons: The rent increase mistake

Landlord Lessons: The service charge shock

Landlord Lessons: The tax record slip

Landlord Lessons: The guarantor gap

Landlord Lessons: The referencing shortcut

Landlord Lessons: The pet clause oversight

Landlord Lessons: The fire safety lapse

Landlord Lessons: The legionella neglect

Landlord Lessons: The asbestos surprise

Landlord Lessons: The DIY eviction disaster

Landlord Lessons: The rent collection chaos

Landlord Lessons: The repair retention row

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Tenants will pay the price for council’s entry threats warns landlord

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Property118

Tenants will pay the price for council’s entry threats warns landlord

A landlord is warning that councils gaining more powers for implementing forced intended entry to a rented property will ultimately harm tenants.

While Nottingham City Council says it will not use forced entry, the Renters’ Rights Act will give council officers the power to carry out surprise inspections and enter private rented properties without a warrant in certain circumstances.

Mick Roberts, one of Nottingham’s largest landlords housing benefit tenants for the past 28 years, says that under selective licensing schemes, councils already have powers to inspect properties.

However, he has recently received a letter of intended entry for one of his rented homes.

The letter warns the council may issue an enforcement notice, along with a £350 charge, if they find any issues during the inspection.

Words and actions make it harder for tenants

Mr Roberts tells Property118: “An intended entry letter sounds scary, what are they going to do, kick the door down if the tenants don’t answer?

“I’m really worried for my tenants’ health, and they’ve committed no crime, yet the council intend to enter.

“The council claims they will charge me £350 when they find something wrong. If it’s something the tenants have done, what do the council think will happen to their cheap rent?

“Do the council have any idea how their words and actions are making it harder for tenants?”

He adds: “The council told me two years ago they were looking at changing the wording ‘Intended Entry’.

“Please do go in, find some things wrong, bill me, it gives me the perfect reason to accelerate my house-selling process.

“Then I don’t have to look after the tenants, and don’t have to do my best to reduce the price and don’t have to take longer to find them the perfect landlord to keep them safe.”

Mr Roberts continued: “The landlord has committed no crime. The tenant hasn’t. The house is safe as far as we’re aware. Yet the council don’t even discuss a suitable time with the landlord to arrange access for everyone?”

Selective licensing plays an important role in raising housing standards

A Nottingham City Council spokesperson told Property118 compliance inspections are an important part in helping to protect tenants.

The spokesperson said: “Selective licensing plays an important role in raising housing standards and ensuring residents have access to safe, well-managed homes.

“Compliance inspections are a normal and necessary part of this process and help maintain a consistent standard across the sector. They are designed to support landlords in meeting their legal responsibilities, many of whom already provide high-quality accommodation.

“Where issues are identified, the council will always take a proportionate approach, clearly outlining what needs to be addressed and allowing landlords the opportunity to put things right. Any charges only apply where landlords fail to meet legal requirements, in line with national policy.

“We do not comment on individual cases or unverified claims. Our focus remains on protecting tenants and creating a fair and consistent system for all responsible landlords.”

Councils gain more powers for entry

The issue of gaining entry will become widely used by councils under the Renters’ Rights Act, from 27 December.

That’s when councils will have the power to enter private rented properties without needing a warrant in certain circumstances.

Landlord law expert at Landlord Licensing & Defence, Phil Turtle, told Property118 the new power of entry is simply embodying what councils have been able to bend the law to achieve for years.

He explains: “A council can still inspect a property even if the tenant and landlord refuse to give permission. Councils have more power than the police to enter your home.

“Already, before the Renters’ Rights Act powers of entry: The Housing Act gives councils entry under Section 239 which gives them the ability to go in and inspect because of an official complaint to determine whether any function under parts one to four of the Housing Act should be exercised.

“If the council think anything is wrong in the property or if anybody has complained, they can go in under Section 239 in 24 hours.”

Mr Turtle added: “But when dealing with an unlicensed property, councils do not need to give 24-hour notice.

“If the council believe that there is an offence under Housing Act 2004 Section 72 which is anything to do with HMO licensing or Section 95 (selective licensing) and they have reason to believe the property is unlicensed, they don’t need to give notice they can just turn-up and demand entry.

“Often the council will do a dawn-style raid at five in the morning with eight or so officers dressed to look like police uniforms, and they’ll threaten their way in.”

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SDLT Tribunal Win Highlights Misclassification Risks for Landlords

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Property118

SDLT Tribunal Win Highlights Misclassification Risks for Landlords

A newly published First-tier Tribunal decision has drawn fresh attention to how easily Stamp Duty Land Tax (SDLT) can be misapplied when property purchases include multiple components such as parking spaces, garages, or storage units.

The case, Sehgal v Revenue and Customs [2025] UKFTT 1439 (TC), concerned the purchase of an apartment, an allocated car parking space, and a separate basement storage unit.

HMRC treated the entire purchase as wholly residential, applying the higher residential SDLT rates.

• The taxpayers appealed.
• The Tribunal agreed.
• A repayment of £1,749,250 was ordered.

The full written judgment is now published on the National Archives “Find Case Law” website under the official neutral citation [2025] UKFTT 1439 (TC).

This article summarises what is known from the published decision, why the outcome matters, and what property owners should consider in similar circumstances.

What We Know About the Case

Based on the published judgment:

• The appellants purchased an apartment,
• an allocated parking space,
• and a separate storage unit held under a new 20-year lease,
• with each component registered under its own title.

All three were acquired under a single contract for £18,250,000.

HMRC treated the entire transaction as “wholly residential”, applying higher residential SDLT rates.

The Tribunal concluded that:

• the storage unit did not “subsist for the benefit of” the apartment (FA 2003 s.116), and
• therefore did not qualify as “residential property”.

Because the transaction did not consist entirely of residential property, the non-residential SDLT rates applied. The appeal was allowed.

Important Clarification: We Do NOT Know Whether the Appellants Were Landlords

Nothing in the public judgment states:

• that the appellants were landlords,
• that the property was part of a rental portfolio, or
• that it was purchased for investment purposes.

Therefore, we do not describe them as landlords.

The case is nevertheless highly relevant to landlords, because mixed-use SDLT questions frequently arise in portfolios containing flats with garages, stores, parking, ancillary land or multiple titles.

Why This Case Matters for Landlords

Many property purchases involve multiple components, such as:

• garages,
• storage units,
• plant rooms,
• bin stores,
• commercial elements,
• land used for non-residential purposes,
• parking or access rights held under separate titles.

The case highlights a key SDLT principle: If any part of a transaction is non-residential, the entire transaction may fall under the non-residential SDLT rate structure.

Misclassification can lead to substantial overpayments, especially on higher-value properties.

The outcome in Sehgal demonstrates how a relatively small non-residential component can have a significant effect on SDLT liability, though several SDLT specialist have described the result as “surprising”, meaning outcomes remain fact-specific.

When Are Storage Units or Ancillary Spaces ‘Residential Property’?

It depends on several factors:

Often residential:

• Parking spaces or garages included in the same lease as the flat
• Areas necessary for the dwelling’s use
• Communal areas linked to residential enjoyment

Potentially non-residential:

• Storage units under separate leases
• Spaces that can be independently used or let
• Areas not required for the dwelling
• Outbuildings or land with distinct commercial purpose
• Components legally or functionally independent of the flat

The Tribunal’s analysis emphasised the legal and functional independence of the storage unit in Sehgal.

As always, outcomes are heavily dependent on the facts and documents.

Why the Judgment Appeared Later Than Expected

Although the hearing took place in January 2025, the written judgment was published on the National Archives site later. Delays like this are not unusual and can occur for administrative or procedural reasons.

Now that the decision is publicly available, its reasoning can be analysed directly from the official text.

Possibility of Appeal

Some SDLT professionals commenting publicly have described the decision as unusual and have said they expect HMRC may consider appealing.

At the time of writing:

• no public confirmation of any appeal has been issued, and
• no Upper Tribunal listing is visible.

If an appeal is brought or further developments arise, we will provide an updated analysis.

Recommended Reading for Landlords and Property Owners

You may find these Property118 resources useful:

Why SDLT Planning Matters explains the new 2025 SDLT regime (additional-dwelling surcharge, non-resident surcharge, abolition of MDR) and outlines how legitimate strategies still exist to minimise SDLT for landlords.

Case Study: One Mixed-Use Purchase, Three Strategic Outcomes shows a real-world example where an investor used mixed-use SDLT rules, lease restructuring, refinancing and pension structuring to optimise tax treatment, split assets, and create long-term investment value.

Thinking Bigger: Why Strategic Investors Are Acquiring Six or More Properties in a Single Deal discusses the logic behind buying blocks of six or more properties at once as a deliberate strategy to access non-residential SDLT treatment rather than paying higher residential rates.

Why £2 million Mansion Qualified for 5% SDLT explains how a large, £2 million countryside mansion (with a chapel, a lake and six holiday-let cottages) nonetheless became liable to a 5 % Stamp Duty Land Tax (SDLT) charge because it was treated as a “non-residential” or “mixed-use” purchase under the rules.

These guides help provide context when thinking about structuring, ownership, and tax planning.

What To Do If You Think Your SDLT May Have Been Misclassified

If you have purchased property where any of the following applied:

• separate storage units or garages,
• parking on separate titles,
• multiple leases,
• partially commercial areas,
• unusual layouts or ancillary land,
• multi-component purchases under one contract,

…it may be worth reviewing whether the original SDLT position was correct.

Several recent Tribunal decisions,  including Sehgal, show that HMRC assessments are sometimes wrong.

Through a full Property118 consultation, we can help you:

• review ownership structures,

• identify areas worth exploring,

• and understand what further professional input may be needed.

We do not provide SDLT reclaim services ourselves.

Important Notice – Not Legal or Tax Advice

This article is for general information only. It is not SDLT advice, legal advice, tax advice or an encouragement to pursue a reclaim.

All tax positions must be reviewed with your accountant. All legal interpretations must be confirmed by your solicitor or barrister.

We will provide a full technical breakdown of the Sehgal decision if and when an appeal is announced or further details become publicly available.

Our consultancy not only covers retirement, business continuity and legacy planning. It can also unlock the lifestyle you once dreamed about but forgot to implement.

Important notice – scope of planning support

Where our recommendations touch on areas requiring regulated input, we refer clients to appropriately authorised professionals for advice and execution.

Mixed-Use SDLT – Frequently Asked Questions (FAQ)

Information correct as at 3rd December 2025. SDLT rules and case law change frequently. Always seek specialist advice before making or amending any SDLT filing.

1. What does “mixed-use” mean for SDLT?

A purchase is treated as mixed-use when it includes both:

• residential elements (e.g., a dwelling), and
• non-residential elements (e.g., commercial land, separate units, land not used as part of the dwelling).

If any part of the relevant land is non-residential, SDLT is charged at non-residential rates for the whole transaction. (Exactly how “relevant land” is defined depends on the facts, titles and contracts involved.)

2. What counts as “residential property” for SDLT?

The Finance Act 2003 (s.116) defines residential property as:

• a dwelling,
• land that forms part of the garden or grounds of that dwelling, and
• interests or rights that subsist for the benefit of the dwelling (e.g., a parking space included within the same lease).

It is not about what something is called, but how it actually functions.

3. Can a storage unit or garage make a purchase mixed-use?

It depends on the details:

Often residential

• A parking space or garage included in the same lease/title
• Areas integral to the flat
• Storage that is not independently accessible or lettable

Potentially non-residential

• A storage unit on a separate lease
• Garages that can be used independently
• Areas with separate access or titles
• Units capable of being let independently

The key question is whether the space subsists for the benefit of the dwelling. Every case turns on its own facts and paperwork.

4. What if I have a garden office, studio or outbuilding?

If the structure is:

• within the garden/grounds, and
• used for domestic purposes,

…it is generally still “residential property”.

However, if it is:

• separately lettable,
• used commercially,
• held under a different title, OR
• functionally independent,

…the analysis becomes more complex.

Tribunal cases have gone both ways, and HMRC routinely challenge borderline claims. Professional SDLT advice is essential before relying on mixed-use treatment.

5. What about land surrounding a house?

Land can be non-residential if:

• it is used for commercial activity (e.g., grazing),
• it is genuinely separate from the use of the dwelling, OR
• it is not reasonably required for the enjoyment of the home.

The Suterwalla case is an example where grazing land meant the purchase was mixed-use. Similar-looking land in other cases has still been treated as part of the residential “grounds”. This is highly fact-specific.

6. Does having a second dwelling (like an annex) make a property mixed-use?

No, a second dwelling does not create mixed-use.

Historically this would have engaged Multiple Dwellings Relief (MDR).

MDR is now abolished for most transactions (with limited transitional rules), but the “how many dwellings?” question may still be relevant for historic cases.

A second dwelling is still residential, not non-residential.

7. Are mixed-use SDLT rates always lower?

They can be lower, especially on higher-value purchases, because:

• non-residential rates top out at 5%, and
• there is no 3% surcharge or 15% corporate rate on non-residential transactions.

However, the financial difference depends on:

• your transaction value,
• buyer type, and
• timing.

You should always run the numbers with a specialist, the saving is not automatic.

8. Does the Sehgal case mean storage units are non-residential?

No, it means that in that specific case, with:

• a separate short lease,
• a separate title,
• and specific factual circumstances,

…the Tribunal found the storage unit did not “subsist for the benefit of” the apartment.

The Tribunal itself acknowledged this was a “surprising result” given the storage unit’s small value relative to the flat.

This does not create a general rule. Most “flat + store” arrangements will still be residential, it depends entirely on the precise facts.

You should not change or amend any SDLT return based solely on Sehgal without specialist review.

9. What if my purchase included multiple leases or multiple titles?

Multiple leases/titles are a red flag that mixed-use might be relevant, but they do not guarantee it.

Key considerations include:

• how the documents link the spaces,
• whether each element is independently usable,
• whether the rights are essential to the dwelling, and
• whether different parts can be legally occupied or let separately.

An adviser needs to review the actual documents.

10. Can a small non-residential component change the whole SDLT result?

Yes; if the non-residential element is genuinely non-residential under FA 2003 s.116.

This is the core lesson from Sehgal, but again, only where the documentation and facts support it.

11. Is HMRC expected to appeal the Sehgal decision?

Some SDLT professionals commenting publicly have suggested that HMRC may consider an appeal, but:

• no appeal has been publicly confirmed, and
• no Upper Tribunal listing is available at the time of writing.

If this changes, we will provide an update.

12. What should I do if I think my SDLT may have been misclassified?

Do not amend or submit an SDLT reclaim without specialist advice.

Instead:

• gather the leases/titles/contracts,
• obtain a structured review,
• and speak to an accountant or SDLT solicitor about potential next steps.

Property118 can help you sense-check ownership structures and understand which questions to take to a regulated adviser.

We do not provide SDLT reclaim services.

13. Where can I learn more about property structures and tax?

You may find these Property118 resources useful:

Why SDLT Planning Matters — explains the new 2025 SDLT regime (additional-dwelling surcharge, non-resident surcharge, abolition of MDR) and outlines how legitimate strategies still exist to minimise SDLT for landlords.

Case Study: One Mixed-Use Purchase, Three Strategic Outcomes — shows a real-world example where an investor used mixed-use SDLT rules, lease restructuring, refinancing and pension structuring to optimise tax treatment, split assets, and create long-term investment value.

Thinking Bigger: Why Strategic Investors Are Acquiring Six or More Properties in a Single Deal — discusses the logic behind buying blocks of six or more properties at once as a deliberate strategy to access non-residential SDLT treatment rather than paying higher residential rates.

Why £2 million Mansion Qualified for 5% SDLT — this explains how a large, £2 million countryside mansion (with a chapel, a lake and six holiday-let cottages) nonetheless became liable to a 5 % Stamp Duty Land Tax (SDLT) charge because it was treated as a “non-residential” or “mixed-use” purchase under the rules.

These guides help provide context when thinking about structuring, ownership, and tax planning.

Disclaimer

This FAQ is for general information only. It is not tax advice, legal advice, SDLT reclaim advice, or a recommendation to amend any tax return.

SDLT outcomes depend entirely on the facts and documents of each case. Always consult a qualified SDLT specialist, accountant or solicitor before taking action.

Important Notice – Not Legal or Tax Advice

This article is for general information only. It is not SDLT advice, legal advice, tax advice or an encouragement to pursue a reclaim.

All tax positions must be reviewed with your accountant. All legal interpretations must be confirmed by your solicitor or barrister.

We will provide a full technical breakdown of the Sehgal decision if and when an appeal is announced or further details become publicly available.

Our consultancy not only covers retirement, business continuity and legacy planning. It can also unlock the lifestyle you once dreamed about but forgot to implement.

Important notice – scope of planning support

Where our recommendations touch on areas requiring regulated input, we refer clients to appropriately authorised professionals for advice and execution.

The post SDLT Tribunal Win Highlights Misclassification Risks for Landlords appeared first on Property118.

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