Buy to let has become an attractive investment
option for many people as soaring house prices, increased
demand for rental property and better legal protection
for private landlords has made buy to let fast growing
area of the mortgage market.
Many lenders now offer specialist buy to
let mortgages that allow private landlords to fix their
interest payments for five years or more, providing you
with some security over mortgage funding costs.
Amendments to the 1988 Housing Act has reduced
the fear of landlords that tenants, once admitted to the
property, will prove all but impossible to evict. This
possibility alone was enough to dissuade many people from
becoming private landlords in the past. The proportion
of UK housing stock taken by rentals stood at a low of
7% in 1989, but has grown to 11% in the ten years since.
Most landlords should be able to obtain gross
rent equivalent to between 100% and 130% of the rental
property's mortgage repayments (interest only). Letting
agents will charge up to 10% of the rental. Some may charge
15% if they are responsible for such things as repairs,
complaints and other matters.
Buy to let mortgages and properties have
become increasingly popular in the UK over recent years.
These mortgages do not differ too greatly from other mortgages
and do require a deposit which varies from lender to lender.
You can usually find discounted, fixed, base rate Tracker
rates and flexible Buy to Let mortgage rates to suit most
short and long term financial planning needs.
Historically, borrowing on income-producing
property has been viewed by lenders as a commercial proposition
so they attracted higher rates of interest than the standard
mortgage offered to owner-occupier, however this is no
longer the case.
There are a number of factors which require
to be taken into account however when considering this
type of venture and therefore the broad appreciation of
how both product lending criteria and interest rates work
does benefit from a more professional approach and one
which takes into consideration other factors which could
benefit you financially. Factors such as how tax relief
can be employed as well as being made aware of the many
obligations which go along with being a 'landlord'.
For a full and frank
appreciation of how this type of scheme may work for
you simply contact Flexible-Finance who will arrange
for you to be able to explore the possibilities which
may await you with this type of scheme.
