Buy to Let (BTL) Mortgages
Buying a property to let as an investment or source of income is becoming increasingly popular
The UK Buy to Let mortgage market now offers a wealth of different mortgage products. Our professional advisers can help you navigate this market to find the right mortgage to meet your needs.
The affordability of Buy to Let mortgages are largely assessed on the rental income being enough to cover the mortgage payments each month. However, in some cases, a borrower’s personal income may also be considered to support the loan application.
To assess that rental income is sufficient, they use a rental income cover calculation. This can vary depending on the lender, the type of mortgage rate taken, the type of property and your personal tax code. However, generally speaking, if the property has a good rental income then the rental will be the key factor when assessing the affordability of the mortgage amount required.
With our access to a comprehensive range of UK lenders (including broker exclusive rate, lenders not available to the public direct, high street banks and building societies throughout the UK) and friendly qualified advice, we will consider your key objectives, property type and mortgage required to find the right lender that fits the affordability assessment needed.
"This company is brilliant, always professional and go out of their way to support clients through the sometimes difficult process of buying to let. Highly recommend for anyone needing any type of mortgage. "
~ Louise
Portfolio Landlord - April 2022
Aside from the difference in how affordability is assessed, a buy to let mortgage is essentially the same as a residential mortgage. The same choice of mortgage types such as short, medium, and long term fixed, variable rates, discounted rates and bank base rate trackers are generally available across the market.
As well as mortgage costs, potential landlords should carefully consider the other associated costs of owning the rental property itself.
These additional costs may include:
Regular Maintenance and ongoing repairs
The upkeep of the property itself, such as repairs to appliances, and redecoration that may be required before a property can be let to new tenants.
Possible void periods if a property is not occupied
Are you going to have someone in the property long term?
Estate Agent fees if using an agent to manage and let the property
Though it varies, letting agents normally charge around 10% of the monthly rental income for managing tenants. If you need full management of your property, it is not unusual for these costs to be much higher, typically around 15% of monthly rent. (Nb. The Queen’s speech of 21st June 2017, has confirmed a pledge to introduce a ban on letting agents fees levied on tenants in England).
Servicing and legal requirements such as annual gas certificates etc.
Say for example in the event of non-payment of rent, anti-social behaviour or damage to the property. Legal insurance can be used to cover costs involved in pursuing eviction.
The benefits of a successful Buy to Let portfolio can include a regular income from the property and capital growth in the property itself. These of course being why BTL is so popular as a way of investing.
There are different types of property as well as different ways that these can be purchased, and all these points are important to consider when finding the most suitable BTL mortgage from the whole of the market. However, we have years of experience in BTL advice and can talk you through the key points to consider and make sure that we find the right BTL mortgage for you.
"Craig and the team at Roberts McBain have been helping us with our buy to let mortgages for 7 years. We always go back to them. They are all so helpful and professional and go out of their way to support us through the process.
Wouldn’t go anywhere else."~ Jon, New Mills
Buy to let mortgages - February 2023
One key point to consider is if a property is purchased in your own name or through a Ltd Company. Limited Company BTL purchases are becoming more and more popular but it’s important to understand the advantages and disadvantages of Ltd Company BTL. Just give us a call and we can talk you through things and help you decide the right way forwards to meet your needs and objectives.
We have helped many of our clients build successful BTL portfolios and seen this work fantastically well for them. However, like any mortgage you take, it’s essential that you have the best advice possible to ensure you have the right borrowing in place.
Please be aware that since the 6 April 2016 higher rates of stamp duty land tax were applied to the purchase of additional residential and non-residential properties.
Your home / property may be repossessed if you do not keep up repayments on your mortgage
Think carefully before securing any other debts against your home/property. Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it
The Financial Conduct Authority does not regulate some forms of buy to let mortgage and some forms of bridging finance.
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We're happy to answer any questions that you might have, just drop us a line!