Top Tips: When Buying / Investing in Residential Property in England

Property in England remains a solid, long‑term investment thanks to its stability, strong rental market, and global reputation. In the next of our Top Tips series, we look at some key things to consider when investing in Residential Property in England.

Careful planning should be undertaken before making any property investment.  Here are our top legal and tax considerations when looking to buy / invest in Residential Property

1. Thorough Legal Due Diligence

Proper legal due diligence will ensure that you obtain ownership of the property you expect with the rights and restrictions you would expect. For example, it should confirm:

• if that the property has been built correctly and in accordance with planning permission;
• any rights the property benefits from or restrictions over its use;
• whether there have been any disputes with the neighbours;
• the boundary to the property and any rights of way which affect it; and
• what income streams the property benefits from (such as rent from tenants).

2. Building Safety Act – High Rise and High Risk Buildings

Buyers of leasehold flats should be aware that the Building Safety Act 2022 may affect certain residential properties, particularly higher-rise buildings. Key considerations include:

• Check whether the Act applies: Properties classed as “Relevant Buildings” (generally at least 11 metres in height or five storeys and containing at least two dwellings) or “Higher-Risk Buildings” (generally at least 18 metres in height or seven storeys) may be subject to additional building safety obligations and requirements.
• Understand the type of lease: For Relevant Buildings, leases can be classified as either “qualifying” or “non-qualifying”. This can affect the extent to which remediation costs can be recovered from leaseholders.
• Investigate remediation issues: Buyers should establish whether any remediation works are planned, underway or completed, and whether there are any historical defects in the building which will need to be remedied.
• Consider service charge implications: Higher-risk buildings may attract higher service charges in certain leases due to the additional duties and responsibilities imposed on landlords.
• Lender Requirements: Lenders will likely require evidence in the form of certificates and documentation where a building is affected by the Act. There may be delays to the transaction where the lender has not received relevant documentation from the seller/seller’s solicitor.

3. Energy Performance Certificates (EPCs) and Minimum Energy Efficiency Standards (MEES)

An EPC rates a buildings energy performance level from A (best) to G (worst).

If property is let on an assured, regulated or domestic agricultural basis then it must currently have an EPC rating of E or above. Government proposals aim to increase this to EPC C by 2030, although no legislation to this effect has yet been passed.

If you are looking to purchase a buy to let property with an EPC rating below EPC C then you should consider what energy improvement works may be required in the near future, how these works could be funded and whether you will require access rights (perhaps from tenants in situ) in order to carry out such works.

4. Tax Considerations

There are various taxes that can be relevant to the purchase and ownership of property. These include:

• Stamp Duty Land Tax:This is payable on the consideration provided for a property, subject to the applicable rates. For SDLT purposes, higher rates may apply to additional residential properties and purchases by non-UK residents.
• Rental income: Rental income is taxed in England regardless of the owner’s residence. Individuals are taxed to income tax at their applicable rate (up to 45%), while companies are subject to corporation tax, currently up to 25%.
• Ongoing charges: Be mindful that certain residential properties worth over £500,000 owned by a non-natural person (most commonly a company) may be subject to an annual ATED charge, although reliefs and exemptions are available in some circumstances.
• Council tax: This is a charge on residential property based on its historic value. From April 2028 a surcharge will apply to high value residential properties (£2million or more), colloquially referred to as the “Mansion Tax”.
• Inheritance tax: Property situated in England is generally within the scope of UK inheritance tax, including for non-UK resident owners, with charges of up to 40% potentially arising on death, subject to available reliefs and exemptions.  
• Taxes on sale: The disposal of property may result in capital gains tax, corporation tax or income tax liabilities, including for non-UK residents, depending on the circumstances of the disposal.

5. Renters’ Rights Act

The Renters’ Rights Act which came into force on 1 May 2026, has reformed residential tenancy law, and represents the most significant overhaul in almost 40 years. The Renters’ Rights Act has introduced more favourable provisions for tenants renting in the private rented sector and has also introduced new rules for landlords. Most notably, key points to note are:

• End of “no-fault” evictions: Previously, a landlord was able to evict a tenant under section 21 without a reason for doing so. Under the Renters’ Rights Act, a landlord will now need to rely on a legal basis for eviction.
• The Private Rented Sector Database (the “PRS Register”): Landlords will be required to register themselves and their rental properties on a centralised database. The register is intended to improve transparency by providing tenants with access to information about their landlord, their property and key compliance documentation such as EPCs and gas safety certificates, where applicable.
• Periodic tenancies as the default: The Act will change the default residential tenancy to an assured periodic tenancy, meaning that leases will continue indefinitely, rather than being limited to fixed terms.
• Exclusions: It is important to note that tenancies with a rental income exceeding £100k per annum are instead generally governed by their contractual terms and common law requirements. Accordingly, certain key reforms introduced by the Act may not apply to such tenancies.

Burges Salmon has produced a range of materials on the implications of the Renters’ Rights Act, which are available on our Renters’ Rights Act Hub, accessible here.

6. Leasehold Extension and Enfranchisement

When purchasing a leasehold property, buyers should be aware of the following points relating to lease extensions and enfranchisement:

• Understand your rights: Leasehold extension and enfranchisement relate to the rights of qualifying tenants to either acquire the freehold of their property or extend the term of their lease.
• Value of a lease: Lease extensions can be costly, so consider the remaining lease term and whether the cost of a future lease extension has been reflected in the purchase price. A shorter lease may affect a property’s value and future saleability.
• Lease Terms: Many lenders will not accept leases that have a term of less than 80-85 years to run at the time of purchase. A shorter lease term may therefore limit available options.
• Seek specialist advice where required: Lease extension and enfranchisement rules can be complex, so obtaining specialist legal advice can help you understand your rights and any options available to you.

7. Other Leasehold Considerations for Investors

In addition to the matters discussed above, investors should also consider the extent to which landlord consent is required and the level of any service charges payable under the lease, as both may affect the property’s attractiveness as an investment.

• Landlord consent: Investors should review the lease carefully to determine whether landlord consent is required before the property can be let, as any such restrictions may affect the property’s investment potential.
• Service charges: Investors should consider the level of any service charges payable under the lease. High service charge liabilities may also adversely affect the overall return on investment.

8. Trees

When buying a residential property, you should be aware of any trees located both on the property itself and on neighbouring land. Particular factors to consider include:

• Subsidence: Trees located close to a property may contribute to subsidence, particularly where the property is situated on shrinkable clay soils. Tree roots can extract moisture from the ground, causing soil movement and potential structural damage.
• Drain damage: Tree roots may enter drains through existing faults in the pipework causing blockages within drainage systems.
• Building insurance implications: The presence of trees near a property may have implications on building insurance. Risks of trees include falling branches, falling trees, subsidence and heave, all of which may affect insurance premiums.
• Tree Preservation Orders (TPOs): A tree subject to a TPO is protected by the council and must remain in place unless there is a justifiable reason for it to be removed. Written consent may be required before carrying out any works such as felling a tree subject to a TPO.

9. Commonhold Reform

Whilst not currently law, anyone buying or investing in residential flats should be aware of the government proposals to make a reformed commonhold model the default tenure for flats, replacing the traditional leasehold structure.  The proposed reforms are intended to provide a number of benefits, including:

• Increased control over management: Owners would have a greater input on the management and maintenance of common areas and facilities within the property.
• Permanent ownership: Unlike leasehold ownership, commonhold ownership is not subject to a fixed term and therefore does not require lease extensions.

For more information, please see the government’s consultation setting out its proposed approach here.

There are undoubtedly other matters to consider in addition to the legal and tax considerations outlined above, including location of the property, condition of the property, maintenance costs and the availability of mortgage finance.

At Burges Salmon, we can provide tailored guidance across all the legal and tax issues that can arise when investing in residential property situated in England. If you would like to discuss your circumstances or need support navigating any aspect of the above, please get in touch with our team — we’re here to help.