We have assembled this section to answer the questions most frequently posed by our clients. If you have a question that is not answered here, please call our Buy to Let team for an instant answer, and we will arrange to have it listed. If this is your first property investment or you are adding to an established portfolio, our expert team can help you find the best possible rate on 0800 840 6513.
Lenders usually assess Buy to Let mortgage applications on the basis of rental income, and will also of course take into account the broader financial profile of the applicant, and this will include any additional sources of income which the borrower may possess.
The maximum loan-to-value offered by lenders is 80%, the remainder of the purchase price being contributed from the buyer's own resources.
Investment in property should essentially be looked upon as being a medium to long term venture, and statistics show that attractive returns have been the reward. Pundits in various investment sectors have over the years propounded the virtues of doing the opposite to the herd and the present time may be regarded as one providing attractive entry levels. Those who take this view may well be rewarded by sourcing deposits from equity in an existing portfolio, and if historic data is an accurate guide, investors are unlikely to be disappointed over the medium term.
Gearing is the means by which equity in a portfloio may be applied to achieve maximum returns. A given property may be assumed to appreciate by exactly the same amount whether it is subject to a mortgage, or is unencumbered. For example, an investor owning a property valued at £200,000 subject to a mortgage of £119,000, being 85% of its original purchase price of £140,000, would have available equity of £81,000. If this was applied as two deposits of just over £40,000 each on two properties costing £200,000, he would derive three potential profits, whereas if he took no action he would be left with just the one.
With the recent fall in interest rates, it is highly likely that we can reduce your repayments by remortgaging. Speak to our lending team today, and see how much you could save.
Many Buy to Let investors order their affairs in such a manner that exposure to tax is minimised, and this is often reflected in audited accounts. However, the principal yardstick by reference to which lenders asses applications relates to rental income achieved from the portfolio, and the extent to which this covers repayment costs. Some lenders are prepared to accept a self-certified declaration of income, but this is becoming more difficult to arrange in the current climate.
We deal with a number of lenders who specialise in providing finance for people who have experienced financial problems. The rates in these cases are surprisingly competitive, to the point where certain products are available without any increase in rates.
The short answer is no. While certain providers require an original house for security, it if often accepted that houses converted into flats, HMOs, bedsits, flats above commercial premises and blocks of flats are all suitable. Provided the property in question is in a suitable condition, we can propose a number of suitable packages.
It may be a natural progression for residential landlords to diversify into the commercial sector, and thus broaden their exposure. Whereas of course residential landlords are mainly involved with Assured Shorthold Tenancies over relatively short periods, commercial tenancies are normally of longer duration with consequently increased security, particularly where a property is subject to a full repairing lease, combined with reduced administrative involvement.
Certain of our panel of lenders are content to accept tenants in these categories. Rents for most DSS tenants are paid direct to landlords, providing a degree of comfort to lenders.
Our dedicated Buy to Let team will be happy to answer any questions you may have. Whether you are an experienced landlord, or are contemplating entering this field, you can call them now on 0800 840 6513, or fill in our online enquiry form and we will respond immediately.
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