Mortgage

Buy to Let Mortgages are mortgages specifically designed for people who want to invest in the property market by purchasing one or more houses and letting them out to tenants. The Owner is then able to benefit from any appreciation in the capital value of the house itself. They are also likely to be able to maintain the property and meet much of the loan repayment from the revenue realised by letting. The buy to let phenomenon has driven house prices higher over the last few years while making a broader section of rental accommodation available.

Buy to Let Mortgages differ from what came before by specifically allowing the rental revenue to be considered as income when considering the ability of the buyer to meet the ongoing mortgage payments. Buy to Let mortgages are very similar to standard mortgages for property which the owner will inhabit. The percentage which the buy to let lender is willing to lend is likely to be restricted to 80% of the value of a property. The term of a buy-to-let mortgage is likely to be somewhere in the region of 5 to 45 years. Interest rates are also likely to be slightly higher than those which a standard mortgage agreement attracts.

When buying to let it is important to know the market in which you will be trying to let your property. It may be worth getting help from a letting agent who knows the area, what is in demand, what the likely pitfalls will be. By planning carefully and purchasing wisely you ought to get a property which requires little maintenance and is attractive to tenants. Avoiding void periods, i.e. time between tenants where you receive no rental income, will be your primary concern once you have purchased the house on a buy to let basis. While not inescapable, you are wise to do everything you can in advance to minimise the likely length of these periods. Insurance is now available to cover buy to let contingencies, your provider ought to be able to provide you with information.

Many high street banks and building societies now offer a buy to let mortgage product. Independent mortgage broker will also be able to recommend mortgage arrangements which are not available on the high street and which will more perfectly meet your buy-to-let mortgage requirements.

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