Section 162 incorporation relief in crisis

admin    Uncategorized     agents

Property118

Section 162 incorporation relief in crisis

Securing clarity and stability in the application Section 162 incorporation relief for property investment businesses: Why the industry needs updated guidance and consistent interpretation.

Over the past decade, UK landlords and their advisers have faced growing uncertainty in how Section 162 incorporation relief is interpreted and administered. What was once a relatively stable area of tax law has become increasingly unpredictable, with significant impacts on landlords, advisers, lenders and the wider private rented sector.

This statement highlights several systemic issues that have emerged. It is not about any individual case or taxpayer. It is about the need for clarity, transparency and modernised guidance so that the industry can operate confidently and fairly under a consistent and consistent set of rules.

Withdrawal of pre-transaction clearance without replacement

Until 2016, advisers could request non-statutory clearance on factual matters relevant to incorporation relief. When this route was withdrawn without public consultation, and without any replacement mechanism, taxpayers lost the only formal way to obtain certainty on issues such as:

• business status,
• the treatment of liabilities,
• beneficial ownership on transfer, and
• the interaction with commercial refinancing requirements.

For a tax relief that is automatic rather than elective, the absence of any pre-transaction certainty mechanism has created deep structural vulnerability. Incorporation activity increased significantly after Section 24, yet the system designed to support certainty effectively contracted.

The gap between published guidance and operational practice

In recent years, practitioners have encountered situations in which HMRC’s operational stance differs from what is stated in published manuals and long-established professional commentary. Several examples illustrate this widening gap.

Example A — Beneficial interest transfers and Section 162

Professionals have reported receiving indications from HMRC that transferring the beneficial interest in property does not qualify for incorporation relief, even when the entire business is transferred as a going concern and where economic ownership passes to the acquiring company before legal title is updated during refinancing.

This position is not reflected in legislation, case law, or HMRC’s published manuals, which historically recognise the distinction between beneficial ownership and legal title. Without clear guidance, advisers cannot be certain how HMRC expects incorporations to be documented in real-world lending environments.

Example B — FOI evidence of agreed HMRC manual updates that remain unpublished

A recent Freedom of Information response confirmed that HMRC has internally agreed significant updates to its manuals relating to incorporation relief. These updates include a replacement version of CG65745, which has not yet been published despite many months having passed since internal approval.

Example C — Indemnities for ‘taken-over’ liabilities.

HMRC officers have, in some enquiries, indicated that indemnities for liabilities “taken over” by a company on incorporation are unacceptable.

This appears difficult to reconcile with HMRC’s own published manuals, including both the existing published guidance and the new unpublished version connected to ESC D32, which explains that indemnities are “normally” the accepted commercial mechanism where liabilities are transferred economically at incorporation, i.e. before legal transfers and refinancing is complete.

Long-established commercial practice and HMRC’s own manuals align on this point; recent operational positions do not, creating considerable uncertainty for taxpayers and advisers.

Example D — Disparity between HMRC manuals and Simon’s Taxes commentary

The leading professional commentary, Simon’s Taxes (notably B9:112 and B9:114), provides long-standing guidance on:

• the conditions for incorporation relief,
• the treatment of liabilities,
• the role of indemnities

Historically, HMRC’s published manuals aligned closely with this commentary. Yet practitioners have encountered interpretations that diverge significantly, suggesting, for example, that economic ownership cannot transfer without simultaneous legal title transfer.

Example E – New financing at incorporation

A further HMRC viewpoint, expressed in at least one formal explanation of its technical position, stated that where a company raises new borrowing at the point of incorporation and uses that borrowing to repay the proprietor’s existing mortgages, part of the consideration may be treated as cash provided by the company. This reduces the extent to which the transfer is regarded as being in exchange for shares and therefore may restrict the amount of gain eligible for rollover under Section 162.

This does align with the warnings in Simon’s Taxes at B9:114, however, many advisers and taxpayers have long understood that ESC D32 existed to prevent “dry tax” where liabilities were economically transferred to the company as part of a genuine business incorporation.

The unpublished version of CG65745 continues to leave room for ambiguity on this point.

Example F – Capital account withdrawals: Simon’s Taxes and BIM45700 vs operational stance

Impact across the sector

• timely publication of agreed manual updates,
• transparent communication where HMRC’s interpretation has developed, and
• alignment between published guidance and operational enforcement.

• Landlords face uncertainty over past and future incorporations.
• Advisers face heightened professional-risk exposure when guidance lags behind operational interpretation.
• Lenders encounter delays and documentation challenges, complicating refinancing and reducing liquidity.
• The wider private rented sector suffers from reduced confidence at a time of already significant regulatory pressure.

Uncertainty on this scale can distort decision-making and undermine fair administration.

What the industry needs

To restore clarity and stability, the sector urgently requires:

a. Updated and published guidance

Reflecting modern business practices, lending constraints, refinancing cycles and beneficial ownership mechanics.

b. A clear route to pre-transaction certainty

Whether statutory or administrative, the current void is unsustainable.

c. Prospective, not retrospective, application of new interpretations

Where HMRC’s understanding develops, it must be applied to future transactions, not retrospectively.

d. Alignment between manuals, professional commentary and operational practice

Taxpayers should be able to rely on published guidance when structuring legitimate commercial transactions.

A constructive way forward

The purpose of this statement is to highlight systemic issues and encourage constructive dialogue between:

• HMRC,
• professional bodies,
• technical practitioners,
• lenders, and
• policymakers

Thousands of landlords have incorporated their businesses in good faith, based on the published guidance and professional understanding available at the time. They deserve clarity, consistency and fair treatment. A stable framework benefits everyone.

Supporting evidence

Simon’s Taxes B9:112 – LINK

Simon’s Taxes B9:114 – LINK

HMRC FOI response – LINK

Current CG65745 manual including ESC D32 as of 05/12/2025 – LINK

BIM45700 – LINK

The post Section 162 incorporation relief in crisis appeared first on Property118.

View Full Article: Section 162 incorporation relief in crisis

Subsidence and ground movement – What landlords need to know

admin    Uncategorized     agents

Property118

Subsidence and ground movement – What landlords need to know

Subsidence is one of the most disruptive and time-consuming perils a landlord can face. Unlike a burst pipe or storm damage, ground movement claims rarely resolve quickly. Investigations, monitoring and structural works can span many months, sometimes years, with cash flow consequences if the property is uninhabitable. This guide explains causes, warning signs, how insurers assess claims, and the steps landlords can take to protect their position.

What Counts as Subsidence, Heave and Landslip?

• Subsidence – downward movement of the ground supporting a building, often due to clay shrinkage in dry spells, tree root desiccation, or washing-out of fines from leaking drains.
• Heave – upward movement of the ground, commonly when trees are removed and clay rehydrates.
• Landslip – movement of soil or rock down a slope. Coastal and hillside properties are more exposed.

Policies that cover “subsidence, heave and landslip” usually treat them together under the buildings section, often with a higher subsidence excess (for example £1,000).

Common Causes in Rental Stock

• Clay soils shrinking in hot, dry summers and re-swelling in winter.
• Trees and large shrubs close to foundations (willow, poplar, oak are frequent offenders).
• Defective drains eroding or softening bearing strata beneath foundations.
• Historic ground conditions, made ground, or nearby excavations and soakaways.

Warning Signs Tenants and Agents May Spot

• Stepped cracking through brickwork or at window/door corners (typically 3mm+ and tapering).
• Doors and windows sticking; new gaps at skirtings, coving or between extensions and the main house.
• Rippling or cracking where different building sections meet, especially after a dry summer.

Ask tenants to report changes promptly. Early notification helps limit damage and speeds insurer engagement.

How Insurers Assess Subsidence Claims

Expect a structured process:

1. Initial triage – desktop review and request for photos, tenancy details and history.
2. Engineer appointment – insurer’s consultant undertakes site inspection. Drain CCTV surveys are common.
3. Monitoring – crack gauges or precise level monitoring over one or more seasons to confirm progressive movement.
4. Cause and remedy – tree management (pruning/removal), drain repair, localised or full underpinning if required.
5. Making good – repairs to finishes, doors, windows and services; decorations at the end.

Because movement is seasonal, monitoring can take 6–12 months or longer. Set realistic expectations with tenants and lenders early.

What’s Usually Covered (and What Isn’t)

• Covered – repair of insured damage to the building caused by subsidence/heave/landslip; necessary investigations; reinstatement after stabilisation.
• Often excluded – patios, drives, boundary walls and fences unless the main home is damaged; poor workmanship/defective design; general settlement or bedding-in of new extensions.
• Contents – structural movement rarely triggers contents cover except for resultant damage (for example a cracked landlord-owned hob if the worktop distorts).

Loss of Rent – Set Adequate Time Limits

Properties are not always uninhabitable during monitoring, but significant works (underpinning, piled beams, major drain excavations) can require decanting tenants. Ensure your policy has realistic loss-of-rent limits by both sum and duration. For complex cases, 12 months may be insufficient; some insurers offer 18–24 months for larger risks.

Evidence Pack That Speeds Acceptance

• Date-stamped photos showing crack patterns and progression.
• Drain CCTV reports and plans (if available).
• Tree report listing species, age, distance from foundations and recommended management.
• History of extensions, prior movement or past underpinning (full disclosure is essential).
• Tenancy details and access arrangements for surveys and works.

Trees: Prune, Pollard or Remove?

Insurers often start with arboricultural management. Pruning or pollarding can reduce moisture demand, but sometimes removal is required. Beware unintended heave after removing large water-demanding trees on clay. Engineer and arborist advice should be coordinated and recorded.

Underpinning and Post-Claim Realities

• Underpinning is a last resort. Localised solutions (drains, trees) are preferred where effective.
• After underpinning, future insurance placement may require full disclosure and evidence of completion; some markets rate properties with prior movement differently.
• Keep a complete claim dossier (engineer’s reports, monitoring results, method statements, completion certificates) for renewals and any future sale.

Common Pitfalls That Derail Claims

• Late notification – delaying contact with the insurer can prejudice investigations.
• Non-disclosure – failing to mention historic movement, underpinning or previous tree issues.
• Unauthorised works – removing trees or starting structural repairs before insurer approval.
• Assuming “settlement” is covered – normal settlement, shrinkage or thermal movement is typically excluded.

Prevention and Risk Reduction

• Survey soil type and nearby trees when purchasing; adjust planting and maintenance plans for clay sites.
• Undertake drain surveys after major leaks or ground soft spots; repair promptly.
• Control vegetation near foundations; follow arborist schedules.
• Log inspections with photos; act early on cracks that open/close seasonally or exceed ~3mm.

Final Thoughts

Subsidence claims demand patience, documentation and coordination between landlord, tenants, engineers and the insurer. With early notification, clear evidence and realistic loss-of-rent limits, most cases resolve satisfactorily. Treat trees, drains and disclosure as part of your risk management, and keep a complete paper trail from first crack to completion certificate.

Request your quote or call-back

The most efficient way to get a personal quote with the best price and cover possible is to call the team on 01832 770965 so we can focus on your enquiry when you are ready and sitting down with your portfolio details to hand.

Alternatively, you can use the form below to request one of our team to give you a call back.

/* “function”==typeof InitializeEditor,callIfLoaded:function(o){return!(!gform.domLoaded||!gform.scriptsLoaded||!gform.themeScriptsLoaded&&!gform.isFormEditor()||(gform.isFormEditor()&&console.warn(“The use of gform.initializeOnLoaded() is deprecated in the form editor context and will be removed in Gravity Forms 3.1.”),o(),0))},initializeOnLoaded:function(o){gform.callIfLoaded(o)||(document.addEventListener(“gform_main_scripts_loaded”,()=>{gform.scriptsLoaded=!0,gform.callIfLoaded(o)}),document.addEventListener(“gform/theme/scripts_loaded”,()=>{gform.themeScriptsLoaded=!0,gform.callIfLoaded(o)}),window.addEventListener(“DOMContentLoaded”,()=>{gform.domLoaded=!0,gform.callIfLoaded(o)}))},hooks:{action:{},filter:{}},addAction:function(o,r,e,t){gform.addHook(“action”,o,r,e,t)},addFilter:function(o,r,e,t){gform.addHook(“filter”,o,r,e,t)},doAction:function(o){gform.doHook(“action”,o,arguments)},applyFilters:function(o){return gform.doHook(“filter”,o,arguments)},removeAction:function(o,r){gform.removeHook(“action”,o,r)},removeFilter:function(o,r,e){gform.removeHook(“filter”,o,r,e)},addHook:function(o,r,e,t,n){null==gform.hooks[o][r]&&(gform.hooks[o][r]=[]);var d=gform.hooks[o][r];null==n&&(n=r+”_”+d.length),gform.hooks[o][r].push({tag:n,callable:e,priority:t=null==t?10:t})},doHook:function(r,o,e){var t;if(e=Array.prototype.slice.call(e,1),null!=gform.hooks[r][o]&&((o=gform.hooks[r][o]).sort(function(o,r){return o.priority-r.priority}),o.forEach(function(o){“function”!=typeof(t=o.callable)&&(t=window[t]),”action”==r?t.apply(null,e):e[0]=t.apply(null,e)})),”filter”==r)return e[0]},removeHook:function(o,r,t,n){var e;null!=gform.hooks[o][r]&&(e=(e=gform.hooks[o][r]).filter(function(o,r,e){return!!(null!=n&&n!=o.tag||null!=t&&t!=o.priority)}),gform.hooks[o][r]=e)}});
/* ]]> */

/* = 0;if(!is_postback){return;}var form_content = jQuery(this).contents().find(‘#gform_wrapper_9′);var is_confirmation = jQuery(this).contents().find(‘#gform_confirmation_wrapper_9′).length > 0;var is_redirect = contents.indexOf(‘gformRedirect(){‘) >= 0;var is_form = form_content.length > 0 && ! is_redirect && ! is_confirmation;var mt = parseInt(jQuery(‘html’).css(‘margin-top’), 10) + parseInt(jQuery(‘body’).css(‘margin-top’), 10) + 100;if(is_form){jQuery(‘#gform_wrapper_9′).html(form_content.html());if(form_content.hasClass(‘gform_validation_error’)){jQuery(‘#gform_wrapper_9′).addClass(‘gform_validation_error’);} else {jQuery(‘#gform_wrapper_9′).removeClass(‘gform_validation_error’);}setTimeout( function() { /* delay the scroll by 50 milliseconds to fix a bug in chrome */ }, 50 );if(window[‘gformInitDatepicker’]) {gformInitDatepicker();}if(window[‘gformInitPriceFields’]) {gformInitPriceFields();}var current_page = jQuery(‘#gform_source_page_number_9′).val();gformInitSpinner( 9, ‘https://www.property118.com/wp-content/plugins/gravityforms/images/spinner.svg’, true );jQuery(document).trigger(‘gform_page_loaded’, [9, current_page]);window[‘gf_submitting_9′] = false;}else if(!is_redirect){var confirmation_content = jQuery(this).contents().find(‘.GF_AJAX_POSTBACK’).html();if(!confirmation_content){confirmation_content = contents;}jQuery(‘#gform_wrapper_9′).replaceWith(confirmation_content);jQuery(document).trigger(‘gform_confirmation_loaded’, [9]);window[‘gf_submitting_9′] = false;wp.a11y.speak(jQuery(‘#gform_confirmation_message_9′).text());}else{jQuery(‘#gform_9′).append(contents);if(window[‘gformRedirect’]) {gformRedirect();}}jQuery(document).trigger(“gform_pre_post_render”, [{ formId: “9”, currentPage: “current_page”, abort: function() { this.preventDefault(); } }]); if (event && event.defaultPrevented) { return; } const gformWrapperDiv = document.getElementById( “gform_wrapper_9″ ); if ( gformWrapperDiv ) { const visibilitySpan = document.createElement( “span” ); visibilitySpan.id = “gform_visibility_test_9″; gformWrapperDiv.insertAdjacentElement( “afterend”, visibilitySpan ); } const visibilityTestDiv = document.getElementById( “gform_visibility_test_9″ ); let postRenderFired = false; function triggerPostRender() { if ( postRenderFired ) { return; } postRenderFired = true; gform.core.triggerPostRenderEvents( 9, current_page ); if ( visibilityTestDiv ) { visibilityTestDiv.parentNode.removeChild( visibilityTestDiv ); } } function debounce( func, wait, immediate ) { var timeout; return function() { var context = this, args = arguments; var later = function() { timeout = null; if ( !immediate ) func.apply( context, args ); }; var callNow = immediate && !timeout; clearTimeout( timeout ); timeout = setTimeout( later, wait ); if ( callNow ) func.apply( context, args ); }; } const debouncedTriggerPostRender = debounce( function() { triggerPostRender(); }, 200 ); if ( visibilityTestDiv && visibilityTestDiv.offsetParent === null ) { const observer = new MutationObserver( ( mutations ) => { mutations.forEach( ( mutation ) => { if ( mutation.type === ‘attributes’ && visibilityTestDiv.offsetParent !== null ) { debouncedTriggerPostRender(); observer.disconnect(); } }); }); observer.observe( document.body, { attributes: true, childList: false, subtree: true, attributeFilter: [ ‘style’, ‘class’ ], }); } else { triggerPostRender(); } } );} );
/* ]]> */

Publication date: Tuesday 9 December 2025

The post Subsidence and ground movement – What landlords need to know appeared first on Property118.

View Full Article: Subsidence and ground movement – What landlords need to know

Hamptons forecasts modest 2026 house price growth

admin    Uncategorized     agents

Property118

Hamptons forecasts modest 2026 house price growth

House prices are set to rise modestly next year by 2.5% across Great Britain in Q4 2026, Hamptons says.

It is also predicting that inflation will ease, and mortgage rates will be lower.

The firm says transactions should hold near 1.15 million as improving affordability counters economic and tax pressures.

However, the outlook becomes more fragile from 2027 when Hamptons thinks political uncertainty and higher borrowing costs will slow growth to 2% in Q4 2027 and 1.5% in 2028.

Modest house price rises

Aneisha Beveridge, the firm’s head of research, said: “The housing market has always mirrored the mood of the nation.

“While the headlines have been dominated by uncertainty, underneath it all, we’ve seen signs of resilience.

“Inflation is easing, mortgage rates are falling, and affordability is improving, which should support modest price growth next year.”

She added: “But it’s hard to ignore the growing drag of taxation and politics.

“London, which historically leads recoveries, is being held back by higher stamp duty and broader tax anxieties, locking some owners into their homes and others out of buying them.”

Base rate cuts predicted

Hamptons says that since prices hit their post-crash floor in 2009, the Midlands is on track to outperform London by next year.

The North West and West Midlands are also expected to pass the capital by the end of 2027.

Next year, the agency believes inflation will fall faster than expected, allowing two or three base rate cuts.

By the end of 2026, Hamptons expects the Bank Rate to settle around 3.25%, with typical mortgage deals stabilising near 4%.

The post Hamptons forecasts modest 2026 house price growth appeared first on Property118.

View Full Article: Hamptons forecasts modest 2026 house price growth

Portugal cuts rental tax to 10%: A warning shot for the UK?

admin    Uncategorized     agents

Property118

Portugal cuts rental tax to 10%: A warning shot for the UK?

Recent announcements from the Portuguese Government, including a proposed reduction of income tax on residential rental income to 10% or even 0% in some cases, have captured the attention of UK landlords. The move contrasts strongly with UK policy direction and raises two important questions:

1. Is Portugal positioning itself as a more attractive reinvestment destination for UK landlords?
2. Does the UK Government risk being forced into similar reforms if rental supply continues to fall?

This article explores these issues from a landlord-focused, strategic perspective.

Portugal Is Actively Encouraging Landlords

Portugal has made a decisive shift towards using incentives rather than penalties to shape its rental market. Key measures include:

• A proposed 10% tax rate for residential rental income within a defined moderate rent bracket up to €2,300 per month
• A 0% tax rate for rents at least 20% below local medians
• Existing reduced rates of 10% for 10 to 20 year leases and 5% for leases over 20 years
• Reduced taxable bases for company structures

It is a clear strategic signal. Portugal wants to increase rental supply, encourage affordability, and reward landlords who commit to long-term or moderate-rent housing.

This approach is in stark contrast to the UK’s direction over the past decade.

Why UK Landlords Are Taking Notice

UK investors face a combination of rising costs and increasing penalties:

• Section 24 mortgage interest restrictions
• Income tax rates of 20 to 45% on rental profits
• An additional 2% tax increase on landlords was announced in the recent Budget
• Higher financing costs, with the UK base rate almost double that of the EU
• Growing regulatory burdens
• Persistent shortages in rental stock due to sustained landlord exits

Meanwhile, Portugal benefits from:

• A significantly lower tax burden on rental income
• A lower interest rate environment
• A government that openly acknowledges the role of landlords in solving housing supply issues

A portfolio generating rental profits taxed at 10% instead of 40% can dramatically improve net outcomes. When combined with lower borrowing costs, it is easy to see why some UK landlords are exploring overseas reinvestment, with Portugal now high on the list.

Could Portugal Be a Better Reinvestment Choice for Some UK Landlords?

For many landlord profiles, the answer is increasingly yes.

Portugal may be attractive to those who:

• Are exiting the UK market because Section 24 makes leveraged buy-to-let unviable
• Prefer stable, long-term rental yields
• Value predictable taxation and low operating burdens
• Want exposure to growing European rental markets
• Are comfortable investing internationally using appropriate legal and tax structures

Not every investor will be suited to the Portuguese market, but its direction of travel is hard to ignore. Portugal is becoming more landlord-friendly at the same time the UK is becoming less so.

Will the UK Need to Introduce Similar Incentives?

The UK Government may eventually have no choice.

The UK rental sector is under significant pressure:

• Tenant demand is rising
• Supply is shrinking
• Rents are increasing at record rates in many regions
• Councils are struggling with housing obligations
• Homelessness pressures are increasing
• Most commentators attribute at least part of the supply decline to taxation and regulation

If supply continues falling, the Government may need to consider reforms such as:

• Revisiting or reversing Section 24
• Offering lower tax rates for long-term tenancies
• Encouraging affordable or moderate rents through tax incentives
• Introducing measures to support reinvestment into the rental sector

Portugal’s approach demonstrates that a government can stimulate rental supply by rewarding landlords rather than penalising them. If the UK continues to push landlords out of the market, similar corrective measures may eventually become unavoidable.

A Strategic Turning Point

Portugal’s rental tax reforms serve both as an invitation and a warning.

For UK landlords looking for stable returns, lower taxation, and a supportive policy environment, Portugal is becoming a credible reinvestment destination.

For UK policymakers, Portugal’s shift highlights how far the UK has diverged from landlord-friendly policy and how unsustainable that may be if rental supply continues to shrink.

If the UK wants a functional rental market, it may ultimately need to pivot towards incentivising landlords, not deterring them.

The post Portugal cuts rental tax to 10%: A warning shot for the UK? appeared first on Property118.

View Full Article: Portugal cuts rental tax to 10%: A warning shot for the UK?

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

admin    Uncategorized     agents

Property118

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.

/* “function”==typeof InitializeEditor,callIfLoaded:function(o){return!(!gform.domLoaded||!gform.scriptsLoaded||!gform.themeScriptsLoaded&&!gform.isFormEditor()||(gform.isFormEditor()&&console.warn(“The use of gform.initializeOnLoaded() is deprecated in the form editor context and will be removed in Gravity Forms 3.1.”),o(),0))},initializeOnLoaded:function(o){gform.callIfLoaded(o)||(document.addEventListener(“gform_main_scripts_loaded”,()=>{gform.scriptsLoaded=!0,gform.callIfLoaded(o)}),document.addEventListener(“gform/theme/scripts_loaded”,()=>{gform.themeScriptsLoaded=!0,gform.callIfLoaded(o)}),window.addEventListener(“DOMContentLoaded”,()=>{gform.domLoaded=!0,gform.callIfLoaded(o)}))},hooks:{action:{},filter:{}},addAction:function(o,r,e,t){gform.addHook(“action”,o,r,e,t)},addFilter:function(o,r,e,t){gform.addHook(“filter”,o,r,e,t)},doAction:function(o){gform.doHook(“action”,o,arguments)},applyFilters:function(o){return gform.doHook(“filter”,o,arguments)},removeAction:function(o,r){gform.removeHook(“action”,o,r)},removeFilter:function(o,r,e){gform.removeHook(“filter”,o,r,e)},addHook:function(o,r,e,t,n){null==gform.hooks[o][r]&&(gform.hooks[o][r]=[]);var d=gform.hooks[o][r];null==n&&(n=r+”_”+d.length),gform.hooks[o][r].push({tag:n,callable:e,priority:t=null==t?10:t})},doHook:function(r,o,e){var t;if(e=Array.prototype.slice.call(e,1),null!=gform.hooks[r][o]&&((o=gform.hooks[r][o]).sort(function(o,r){return o.priority-r.priority}),o.forEach(function(o){“function”!=typeof(t=o.callable)&&(t=window[t]),”action”==r?t.apply(null,e):e[0]=t.apply(null,e)})),”filter”==r)return e[0]},removeHook:function(o,r,t,n){var e;null!=gform.hooks[o][r]&&(e=(e=gform.hooks[o][r]).filter(function(o,r,e){return!!(null!=n&&n!=o.tag||null!=t&&t!=o.priority)}),gform.hooks[o][r]=e)}});
/* ]]> */

/* = 0;if(!is_postback){return;}var form_content = jQuery(this).contents().find(‘#gform_wrapper_579′);var is_confirmation = jQuery(this).contents().find(‘#gform_confirmation_wrapper_579′).length > 0;var is_redirect = contents.indexOf(‘gformRedirect(){‘) >= 0;var is_form = form_content.length > 0 && ! is_redirect && ! is_confirmation;var mt = parseInt(jQuery(‘html’).css(‘margin-top’), 10) + parseInt(jQuery(‘body’).css(‘margin-top’), 10) + 100;if(is_form){jQuery(‘#gform_wrapper_579′).html(form_content.html());if(form_content.hasClass(‘gform_validation_error’)){jQuery(‘#gform_wrapper_579′).addClass(‘gform_validation_error’);} else {jQuery(‘#gform_wrapper_579′).removeClass(‘gform_validation_error’);}setTimeout( function() { /* delay the scroll by 50 milliseconds to fix a bug in chrome */ }, 50 );if(window[‘gformInitDatepicker’]) {gformInitDatepicker();}if(window[‘gformInitPriceFields’]) {gformInitPriceFields();}var current_page = jQuery(‘#gform_source_page_number_579′).val();gformInitSpinner( 579, ‘https://www.property118.com/wp-content/plugins/gravityforms/images/spinner.svg’, true );jQuery(document).trigger(‘gform_page_loaded’, [579, current_page]);window[‘gf_submitting_579′] = false;}else if(!is_redirect){var confirmation_content = jQuery(this).contents().find(‘.GF_AJAX_POSTBACK’).html();if(!confirmation_content){confirmation_content = contents;}jQuery(‘#gform_wrapper_579′).replaceWith(confirmation_content);jQuery(document).trigger(‘gform_confirmation_loaded’, [579]);window[‘gf_submitting_579′] = false;wp.a11y.speak(jQuery(‘#gform_confirmation_message_579′).text());}else{jQuery(‘#gform_579′).append(contents);if(window[‘gformRedirect’]) {gformRedirect();}}jQuery(document).trigger(“gform_pre_post_render”, [{ formId: “579”, currentPage: “current_page”, abort: function() { this.preventDefault(); } }]); if (event && event.defaultPrevented) { return; } const gformWrapperDiv = document.getElementById( “gform_wrapper_579″ ); if ( gformWrapperDiv ) { const visibilitySpan = document.createElement( “span” ); visibilitySpan.id = “gform_visibility_test_579″; gformWrapperDiv.insertAdjacentElement( “afterend”, visibilitySpan ); } const visibilityTestDiv = document.getElementById( “gform_visibility_test_579″ ); let postRenderFired = false; function triggerPostRender() { if ( postRenderFired ) { return; } postRenderFired = true; gform.core.triggerPostRenderEvents( 579, current_page ); if ( visibilityTestDiv ) { visibilityTestDiv.parentNode.removeChild( visibilityTestDiv ); } } function debounce( func, wait, immediate ) { var timeout; return function() { var context = this, args = arguments; var later = function() { timeout = null; if ( !immediate ) func.apply( context, args ); }; var callNow = immediate && !timeout; clearTimeout( timeout ); timeout = setTimeout( later, wait ); if ( callNow ) func.apply( context, args ); }; } const debouncedTriggerPostRender = debounce( function() { triggerPostRender(); }, 200 ); if ( visibilityTestDiv && visibilityTestDiv.offsetParent === null ) { const observer = new MutationObserver( ( mutations ) => { mutations.forEach( ( mutation ) => { if ( mutation.type === ‘attributes’ && visibilityTestDiv.offsetParent !== null ) { debouncedTriggerPostRender(); observer.disconnect(); } }); }); observer.observe( document.body, { attributes: true, childList: false, subtree: true, attributeFilter: [ ‘style’, ‘class’ ], }); } else { triggerPostRender(); } } );} );
/* ]]> */

Publication date: Monday, 8 December 2025

The post Case study: The landlord who expanded using buy to let gearing appeared first on Property118.

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

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

admin    Uncategorized     agents

Property118

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.

The post Rachel Reeves faces £7,550 bill to upgrade EPC rating on her rental home appeared first on Property118.

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

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

admin    Uncategorized     agents

Property118

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.

The post Dear 30-Year-Old Me: The Tightrope Between Wealth and Life appeared first on Property118.

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

The mortgage consent mistake that put a landlord at risk

admin    Uncategorized     agents

Property118

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

The post The mortgage consent mistake that put a landlord at risk appeared first on Property118.

View Full Article: The mortgage consent mistake that put a landlord at risk

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

admin    Uncategorized     agents

Property118

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?

The post I think my Airbnb guests were strippers and now I have a glitter problem appeared first on Property118.

View Full Article: I think my Airbnb guests were strippers and now I have a glitter problem

Landlords blast selective licensing scheme as anger grows after first year

admin    Uncategorized     agents

Property118

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.

The post Landlords blast selective licensing scheme as anger grows after first year appeared first on Property118.

View Full Article: Landlords blast selective licensing scheme as anger grows after first year