UK Buy to Let Mortgage

The buy to let mortgage UK market suffers highs and lows, although experts are currently confident as the lack of first time buyers has led to a higher demand of rented accommodation.

If you go into it with your eyes wide open, there’s no reason why your buy to let venture can’t work for you.

One of the first things to do is get to know the market. Ask estate agents about rental demand within the area that you wish to purchase. It’s crucial to find a property that will be easy to let.

Also find yourself a good letting agent. It’s wise to opt for one that’s registered with the Association of Residential Letting Agents (ARLA).

Next, set your budget. Start with what you have by way of deposit, remembering to factor in new furnishings. The size of your deposit will determine how much you can afford to borrow. It’s crucial that you find a mortgage provider that offers buy to let deals with competitive rates.

Most deals vary between (typically) 75 to 85% loan to value, so this may limit what you can afford to buy. You will be expected to be able to predict your rental income.

It’s advisable to find a decent mortgage broker to do the work for you and find you the best mortgage.

Look for a mortgage broker who advises from the whole of the market, not just a panel of mortgage providers.

And most importantly – don’t pay a broker fee. There’s no need to and it significantly adds to your costs at a time when every penny counts.

When the sale gets under way, make sure you protect yourself from all eventualities: get a full structural survey or Homebuyers report if you’re buying an old place; sort out renovation work sooner rather than later; have tenants lined up for as soon as the work completes; look at health and safety requirements; and ensure you have a tenancy agreement in place.

Remember the two golden buy to let rules: Do your homework & seek advice!

Please note: Although the FSA does not regulate most Buy to Let mortgage advice, check that the broker concerned will treat you with the same skill, care and diligence as if they did.

See also:
Buy to let mortgage calculator: how much can I borrow?
Buy to let mortgage calculator: how much rent should I charge?
Mortgage comparison: finding the right mortgage broker
Independent or whole of the market mortgage broker?