Evil landlords making people live in deplorable conditions

Today I was up near the North Circular Road looking at a pre-63 building. These are properties which have been continuously let out since before the building regulations came in and for that reason they are often divided up into very small units or bedsits. From this year new legislation came in which means that many of them are illegal because you can’t have shared bathrooms and many other structural issues that make the old ‘bedsit’ a redundant property.

You can still let out a full house, somebody could sign the lease then let out rooms to get a similar end result but this isn’t commonplace as the various rooms are not ‘self contained’ in any way (no kitchen etc.).

Another lady was there to view the property and we got to chatting, I asked if she was interested in making it into one normal home as it had been originally, she answered by saying ‘what are you looking at it for?’, to which I answered ‘to let it out to people similar to how it is now’. I should …

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Financing pre-63 properties

We have covered pre-63 properties in the past and talked about how many of them have very strong cash-flows.

The recent downside we’ve seen is that lenders shy away from financing them for several reasons, the first and foremost is down to them being a multi-unit that requires a professional landlord to manage and banks tend to be of the view that if you don’t have lots of property already that you won’t be up to the task (which spells future losses in their books).

The next thing is SI534 which is changing the building standards for rented accommodation, this legislative change means that many pre63’s are not up to scratch, which also means most of these properties require substantial retro-fitting.

This second hurdle means that even when financing the property that you have to prove the borrower can make payments while investing in the work that needs to be carried out, because roll-up accounts are a thing of the past (something developers used), it …

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