Safe as houses" is an axiom which resonates across
cultures, and has an impact on pension investment. Although SIPPS
can't invest in residential property, UK commercial property is
an important asset class for trustees and advisors to consider.
There are two features of the property industry which are
peculiar to the UK and merit especial mention. First is the
so-called "FRI lease": a full repairing and insuring
lease means that the tenants pay all the cost of maintaining and
repairing the building, in addition to the rents. This is
sometimes called a "triple net" lease. Other
jurisdictions require the landlord to repair structure of the
building using income from rent, or make the seller liable for some
wants of repair event after the sale has completed.
Second is the upwards only rent review, prevalent in the UK
despite its unpopularity with tenants. Typically the rent
payable by the tenant is reviewed to the market level every five
years, ensuring the rent received by the landlord keeps pace with
inflation. The benefit (for building owners) is that leases
tend to be written on terms which mean the rent payable by the
tenant will not fall, even if the market rent has fallen since the
lease was first granted.
The combination of these factors produce a robust return profile
Of course, past performance is no guarantee of future
returns. Lease lengths in the UK have fallen over time; the
rent is payable only as long as the lease lasts. This means
there is less certainty with regards to returns. Property
investment has transaction costs and takes time to transact.
Looking to the future, trends such as co-working space and the
growth of freelancing is likely to reduce the demand for offices
This means that any investment into UK property requires expert
advice. Our commercial property team are used to working for
investors of all sizes, and can recommend other relevant
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The recent County Court decision in Camelot Property Management Limited (1) and Camelot Guardian Management Limited (2) v. Greg Roynon is an uncomfortable reminder to landowners of how easy it is to inadvertently grant a tenancy when only a licence was intended. The consequences of getting it wrong can be time consuming and costly.
It's now less than one year to go until the Energy
Efficiency (Private Rented Property) (England and Wales)
Regulations 2015, commonly known as the MEES Regulations (minimum
energy efficiency standards) come into effect.
It's now less than one year to go until the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, commonly known as the MEES Regulations (minimum energy efficiency standards) come into effect. It
The use of letters of intent can be fraught with difficulty. In this Insight we review the key case law on letters of intent of the past few years and seek to highlight some of the lessons that can be learned from them.
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