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Buy to Let (BTL) Mortgages

Buying property to let as an investment or source of income is becoming increasingly popular and the UK Buy to Let mortgage market offers a wealth of products to meet your needs.

Affordability of Buy to Let mortgages is largely assessed on the rental income being enough to cover
the mortgage payments each month although a borrower’s personal income may also be considered to support the loan application. However, aside from how affordability is assessed, a buy to let mortgage is essentially the same as a residential mortgage with the same choice of mortgage types such as short, medium and long term fixed, variable rates, discounted rates and bank base rate trackers.

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:

Property Maintenance.

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.

Ground Rent/Service Charges.

These costs only apply to leasehold properties.

Buildings /Contents Insurance.

The property will need buildings insurance, and any furnishings provided as part of the rental agreement will also need to be insured with a suitable contents insurance policy.

Furnishings.

If the property is to be let as furnished, then you'll need to consider the initial cost of providing the items needed to furnish the property.

Letting Agent fees.

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).

Legal insurance.

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.

Appliance Safety and Inspection.

Certain appliances will need to be regularly inspected and serviced to ensure they are safe to use and compliant with current regulations. Examples include Gas Boilers and Gas Fires.

When choosing a letting agent to act on your behalf, it is wise to choose one that is a member of The Association of Residential Letting Agents (ARLA). All members of the ARLA participate in a bonding scheme to protect both rental income and tenants’ deposits.

You don’t have to be an experienced landlord to benefit from having a buy to let property and whether a first-time property investor, building or experienced we can find you the most suitable Buy to Let (BTL) mortgage to meet your needs and take care of the full application process from start to completion

Here at Roberts McBain we make sure our clients have extensive options available from UK lenders through access a comprehensive panel of lenders so you can be sure that advice is tailored to your individual needs.

A mortgage is a loan secured against your property. Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

The financial conduct authority does not regulate most forms of buy to let mortgages.

Please be aware that from 6 April 2016 higher rates of stamp duty land tax were applied to the purchase of additional residential and non-residential properties.

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