Buy to Let Mortgage Advice

 

To minimise the risk when investing in property there are a variety of measures you should take and precautions you can make. Here are just a few...

Almost all, if not all, lenders will either prohibit you from letting your home to a third party or they’ll set restrictions and have formal requirements around notification, etc.

The simple answer is no. At least, you can, but it’s a very bad idea.

The Ministry of Housing, Communities and Local Government have recently introduced new guidelines for HMO landlords.

More recently, the UK government introduced a relatively complex scale of tax bands aimed in large part at discouraging the purchase of second homes and property used for buy-to-let investment.

The UK Government have been keen to discourage the small private buy to let investor. From April 2016, anyone purchasing an additional buy to let property must pay at least an extra 3 per cent in stamp duty land tax.

As part of a portfolio of measures aimed at cooling demand from the buy-to-let market, the UK’s Government have recently introduced several fiscal measures aimed at achieving a reduction in those interested in entering the private buy-to-let market.

The Buy to Let landscape is changing. The government fully intends to collect more tax from landlords and the option to buy and rent out property may no longer be open to just anyone who can raise a deposit.

There have been so many changes in the Buy to Let sector, that I thought it was time for a general round up.

The 1st April 2018 will see any properties rented out in the private rented sector requiring a minimum energy performance rating of E on an Energy Performance Certificate (EPC). If you don’t have this rating, you are unlikely to be able to legally rent out your property after this date.

Capital Gains Tax (CGT), as the name suggests, is charged upon the increase in value of an asset held by an individual. It is payable only when the gain is realised (i.e. a property sold or, in many cases, transferred) by that individual.

The Prudential Regulation Authority (PRA) is a part of the Bank of England and is responsible for the regulation and supervision of banks, building societies, credit unions, insurers and major investment firms. 

Once you have made the decision to invest in a residential Buy to Let property, it’s worth sticking to a few basic rules. This is likely to make the whole process simpler and easier to manage further down the line.

As Landlord you inherit several responsibilities around the need to secure your tenant’s safety. One of these includes the requirement for an annual Gas Safety Certificate.

With banks offering tiny returns on cash savings and ISAs and the fairly recent stock market volatility still fresh in people’s minds, investing in property is still considered by many to be the best way to invest their money.

The solution for some seems to be to set up a limited company within which to purchase the buy to lets.

Borrowing money for a ‘buy to let’ investment is different to borrowing for your own home. The interest rate is usually higher in comparison and the deposit required is usually between 20% and 40% of the property’s value.

From the 1st October 2015 regulations require smoke alarms to be installed in rented residential accommodation and carbon monoxide alarms in rooms with a solid fuel appliance.

If you are looking to rent out your property in Maidenhead after 1. February 2016 the UK will require Landlords to undertake ‘Right to Rent’ checks on all tenants.

Anyone buying a 2nd property will see an additional 3% on their stamp duty rate from April 2016. This means that tax bill on a buy-to-let property costing £250,000 will jump from £2,500 to £8,800. 

Interest rates are so low that mortgage lenders can’t really cut them any more in order to win business. Instead of fighting it out in a rate war, providers are looking for new markets or niche areas for lending.

Buying property as an investment has proved to be a successful and lucrative investment decision for some and here we will address some of the benefits and pitfalls those new to the market should consider.

The Chancellor has largely left mortgages alone in recent budgets, but last week he came out fighting.

By far the most dramatic and exciting way to buy a property is by auction.

A Buy to Let mortgage is a loan which, as the name suggests, is lent to the buyer of a residential property for the purposes of investment rather than personal occupation. Both loans are used to buy houses or flats but the Buy to Let mortgage is different in some subtle but important ways.

Let to Buy tends to be seen as a Plan B – a product for reluctant landlords who have entered Buy to Let accidentally, and usually because they could not sell their previous residential property prior to buying another. Let to Buy, the conventional wisdom goes, is what you do with the house you could not sell.

 
 
 
 

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be no fee for Mortgage Advice. There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, but we estimate it to be £399.

Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at www.fca.org.uk.

The Financial Ombudsman Service is an agency for arbitrating on unresolved complaints between regulated firms and their clients. More detail can be found on their website: www.financial-ombudsman.org.uk

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