Buy to Let Mortgages

One of the keys to Buy to Let success is finding the right property in the right area and at the right price.

Your own knowledge of the local market will prove invaluable in ensuring you achieve this objective. A long term regeneration programme, town centre redevelopment, emergence of new Industries to an area or new rail or tube communication links could all have a positive impact on the local property market. In your hunt for value don’t be tempted to buy the first property that you see. Get to know your local Estate Agents and make sure they know what your budget is and how quickly you can complete a transaction. Don’t be frightened to step in to mend a broken chain and if you do, negotiate hard on the asking price.

Think of your property as a long term investment and really think twice about buying anything with ongoing maintenance problems. Always secure the services of a reputable managing agent. They will ensure that your property is properly managed and the annual regulatory obligations that you need to consider in terms of Gas, Fire and Electrical safety are not forgotten. In addition to the emergence of Buy to Let, we have also seen an increasing number of lenders who will now assist on a Let to Buy basis. This is where you let your current property and purchase a new property for you to live in. Equity can be released from the existing property which can be used as a deposit on your new home. There are significant tax advantages for both Buy to Let and Let to Buy, particularly the latter which can be extremely tax efficient. Recent and little known tax changes now mean that it can be possible to obtain tax relief on a new residential property as well as a Let to Buy Property.

Our advice is that if you are thinking about Buy to Let or Let to Buy you should always employ the services of a Tax Adviser.

Buy to Let mortgages have grown in popularity in recent years and there is now a vast array of schemes readily available through the majority of lenders. Lenders will normally use standard income multipliers when assessing residential mortgage applications. However, buy to let loans are typically assessed on the amount of rental income they will generate. An example would be 130% of rental income against your mortgage repayment. Most lenders will require a minimum of 20% deposit. Another recent and welcome trend is for lenders to offer buy to let loans specifically for student occupation. University life is expensive and a buy to let mortgage is potentially a way of mitigating some of those costs.

The ready availability of buy to let mortgages is good news but the variety of different products, mortgage rates and also specific lender requirements can often make your choice of loan confusing. This is where we can help. We can discuss the latest available schemes and let you have details of monthly payments so you can compare the different lenders.

If you are buying for the first time or wish to re mortgage an existing property please contact our offices on 01494 680700.

• Your Home or property may be repossessed if you do not keep up repayments on your Mortgage
• Past performance is not a guide to future performance. The value of property investments and income from them can go down as well as up and investors may not get back the amount originally invested.
• The value of a property is generally a matter of opinion and the true value may not be recognised until the property is sold. It may be difficult to sell or realise the value of the property in adverse market conditions.
• Borrowers will still be responsible for maintaining the payment of any mortgage in the event that the property is not rented out and therefore may wish to make suitable provision for this event. We suggest that you seek legal advice and advice on tax issues before purchasing a property to let

BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL SERVICES AUTHORITY

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