A life sentence in property is not a bad thing!

Wednesday 09th August 2017 11:14 EDT

This afternoon, I'm due to meet a tenant who has been occupying a property we purchased on behalf of an investor.

The property was purchased prior to auction in June 2014 for the sum of £250,000. It’s a semi-detached house, freehold, on a busy Road in Greenford, North London.

It was a good buy at the time and we managed to secure the property prior to the auction. The seller had given the impression that the property was occupied by a tenant on an AST, by including an AST in the legal pack duly signed by the tenant.

It was in fact more complicated than that. The tenant has a life tenancy in the property and to complicate matters she had been shifted from one house to another. The short of it is, the tenant cannot be shifted from the property in her lifetime.

This isn't necessarily a bad thing, the first benefit is there are no void periods. There is also not as much complaining, as if someone is in a place for life they treat the home as their own, not as a hotel.

One aspect which came to light was, although the tenant has a right to stay in the property for life, they have to be paying market rental; this was implemented following a set procedure which was duly followed and the rent increased to market levels.

In a nut shell our investor has a great deal, a BTL freehold property which was bought very cheap; I recall at the time, the market value was around £300k-£325k, equating to a 25% discount.

Currently the value of this property is £415k, this is on the basis it is vacant. This means there is potentially a good £150k to be gained from this property if it can be vacated. Given the original investment was under £70k, this represents a very good return over a three-year period.

The market is segmented into two, the end user and the investor. The end user will pay over the odds to get a property as it will be an emotional purchase. The investor will look at the numbers, and this will be the driving factor. However, despite the benefits from a lifetime tenant paying market rent, the proposition is not attractive. This stems from mortgage companies’ requirements for an AST to be in place and no other types of tenancies. This is driven by the risk of the property being repossessed, they perceive it will be less desirable and may not achieve the market price. This wouldn’t be a problem if mortgage companies chose to lend on it in the first place!

This was a perception created for Council flats many years ago, some lenders would not lend on a council flat full stop, others would only lend subject to a valuer’s comments. However, when you look at the numbers, a council house investment especially in Central London made more sense than a privately owned property.

We live in an environment where the purchase price, and current prices of almost any property, is easily found in minutes. And, therefore, the tenant can already see the figures, and have an idea of what kind of premium she can request to surrender her tenancy.

However, we are not in a desperate situation and the investment is stable.  Therefore, if the margin is not big enough the tenant can carry on living there with no issues. 

Agony Agent is here to help!

Q: I'm just doing a bit of decorating in my apartment, ready for my next set of tenants, but what do you recommend for the flooring, carpet or laminate?

A: As a landlord, there are certainly pros and cons to each option.



l Keeps the house warm and helps with insulation

l Looks attractive and feels better under bare feet

l Adds value – makes the space look like it’s had more money spent on it


l Wears out easily – especially in high-traffic areas, such as hallways

l Can fade in places, especially when furniture has been in one place for while

l Stains easily and attracts dirt

l Difficult to clean – professionals may have to be contracted

l Can be expensive to buy good quality and have it fitted


Make sure you look for a durable, easily cleaned carpet that will withstand a few years of wear and tear. Darker colours are best to prevent stains showing, but don’t go too dark – this could make rooms look smaller.

Laminate flooring


l Durable and can withstand much more than carpet as it’s less easily marked

l Easy to clean – spills will mop straight up

l Cost effective and easy to install and replace (if a section is damaged, it can be lifted out and replaced), you could even do it yourself


l While it can be installed in ‘moist’ places, such as kitchens and bathrooms, it is easily damaged by puddles of water, if they’re left to stand

l Many people think it looks less attractive than carpet or wood


If you’re considering installing laminate flooring in a bathroom or kitchen, make sure it’s a specialist variety that can withstand water better. Also make sure you check the guarantee, to ensure it won’t be void if you install the flooring in these areas.

Do be sure to take into account the type of tenants you’re looking for and the rent you’ll be charging.

If you would like further advice on this or any other areas of decoration, then please contact the office and ask about our assisted full refurbishment packages.

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