Struggling to find the best buy-to-let mortgage in York? speak to one of our buy to let mortgage advisers today
The term ‘buy to let‘ generally refers to either the practice of buying a property to be let for profit or to the type of mortgages used to purchase a property for such letting. Many countries, both in the western world and in the developing nations, have seen a surge in the growth of the buy to let property market in the last 2 decades and this has fuelled a growth in amateur landlords and the but to let mortgage providers who are keen to encourage and profit from them in turn. In addition, this growth has generated a lot of commerce in other related sectors such as buy to let insurance.
FAQs on Ltd Co borrowing for buy to let
Many countries, both in the western world and in the developing nations, have seen a surge in the growth of the buy to let property market in York the last 2 decades and this has fuelled a growth in amateur landlords looking for quality mortgage advice, this is why mortgage brokers in York who specialise in Buy-to-let are so important and the but to let mortgage providers who are keen to encourage and profit from them in turn. In addition, this growth has generated a lot of commerce in other related sectors such as buy to let insurance.
York Buy to let mortgages have been available in the UK since the mid-nineties and they are specifically designed for investors to borrow money to purchase property in the private rental sector. The amount that a prospective but to let investor can borrow is generally determined by the rental valuation of the property. The annual income for a rented property has to cover a certain percentage of the mortgage repayments, the Association of Residential Letting Agents (ARLA) states that landlords should seek to be able to obtain gross rent returns equivalent to between 130 per cent and 150 per cent of the rental property’s mortgage repayments, this takes into account the surplus rent to cover costs of property maintenance and slack periods when the property may be vacant of tenants.
York Buy To Let Mortgages.
Some buy to let mortgage lenders in York will lend you a maximum sum based on a multiple of your salary (usually a multiple of three) plus a percentage of the forecast rental income on the property. So if your annual salary is said 30,000 Franks and the forecast rental income is 10,000 Franks they will lend you 95,000 Franks. Other mortgages, in addition to factoring in your salary, will include any existing loan commitments you have, and then apply what is known as the ‘deduction rule’. This rule relates to the annual mortgage payments worked out at a pre-set level of interest.
Buy to let mortgage interest rates are generally fairly close to residential mortgage rates but will generally be slightly higher and typically charge higher fees. This is due to the fact that buy to let loans are considered by the financial sector to represent a greater risk than residential owner-occupier mortgages, and they generally are.
The Situation in the UK About Buy To Lets
The buy to let market literally ‘exploded’ in the York around the beginning of the millennium with rising property prices and the increasing availability of buy to let funding fueling a surge in would-be investors trying to cash in on the trend of the market. One reason for their popularity is the tax advantages that are available to the UK buy to let investors. Rental income is treated just like a salary by the Inland Revenue, and is therefore often taxed at 22% or even 40%. However, landlords are allowed to deduct costs from the taxable portion of their rental income, and these costs can include the interest of the buy to let mortgage repayments as well as maintenance costs on the property. These tax incentives made the buy to let market very attractive for both professional investors and amateurs looking to make the most out of their savings.
Would-Be Buy-to-let Investors
The market peaked around 2007 and now the market is saturated in many areas across the country with too many properties available to tenants. While buy to let is generally not a good idea for people who do not possess some extra budget there are a lot of remortgage deals which will fund a deposit for a home. If you are worried about losing money during void periods many companies will provide insurance which can deliver as much as six months mortgage payments in the event of a property in York remaining unoccupied.
You may still be lucky, and find a hotspot but you need to do your homework and the figures correctly. Buy to let trends differ from town to town and literally from street to street. Good advice for potential investors is to visit the local letting agents who should be able to tell you who is renting what at the moment so you can define your target audience. It could be students, young professionals or families, for example. Look for areas that do have a shortage of properties and for indicators that people will move there, such as new business developments.
Buy to let mortgage deals are still rife and the rates are almost as competitive as with conventional deals. The mantra with your buy-to-let must be ‘don’t expect to get rich quickly’. You need to look long-term: an absolute minimum of five years – but probably nearer to ten years.
If you're looking at buying an investmentproperty to help supplement your pension in the future should you be looking for a propertyor real estate investing mentor? It’s an interesting question and I’llgive you my thoughts right after this Hi I’m Andy from monoperty.
Com and on thischannel I share the lessons I have learned as a property investor and landlord and Ialso interview other investors so we can learn from their advice too so if you're new hereconsider subscribing for more videos like this And so if you're a beginner looking to investwhilst you're in full time employment to help supplement your pension in the future I wouldn’tworry about finding a mentor.
What!?! Hear me out There are people who charge thousands or tensof thousands for mentorship programs.
Now I know if you want to go big having amentor can accelerate your progress and help you avoid the pitfalls but I think that’ssomething to think about once your involved and you've got a taste for it and you enjoyit and you want to take it to the next level.
Also I believe there is added value if youhave some experience before seeking a mentorship because you'll have some knowledge that youcan base your questions on and you won’t be spending your money on just learning thebasics which you can get for free online or from books.
Of the 2 million landlords in the UK the majorityof them are what’s known as accidental landlords.
It’s how I started out.
These people find themselves in a situationwhere they are unable to sell a property for various reasons due to an inheritance, movingjobs, or they let their property because they are living away from home for long periodsof time with their work.
Rather than selling they look to let theirproperty through a managing agent so it’s one less thing for them to worry about.
And the majority of people do well from thiswith very little effort, their running costs and overheads are covered each month and astime passes they gain some capital growth.
I know this because as an accidental landlordmyself I’ve been there.
If you are actively looking to invest, youare going to have a better start than the accidental landlords, who are already doingwell, because you have taken the time to learn.
The accidental landlords are making the bestout of what they already have, whereby you, the active investor, will be seeking a certaintype of property in a specific area that is in demand.
Buying your first buy to let can be done withoutany guidance at all, and you will find that you’ll receive some direction from the estateagent, mortgage broker and solicitor during the process anyway.
You already have enough to do on your to dolist; find a deposit, find a mortgage broker, research an area, conduct viewings, crunchthe numbers and find a managing agent ……, so if finding a mentor is on that list, you canscratch it off and have one less thing to do.
Don’t over think it and make it more difficultfor yourself.
I did very little research on my first buyto let, I listened to what the estate agent told me, the mortgage lender was happy tolend to me once they had done their valuation and it worked out well.
Now could I have increased my return on investmentif I had known and done more at the time, well of course I could BUT, at least I madea start.
There is a danger of over thinking the processwhich will delay you from buying your first investment property.
Don’t spend too much time thinking aboutgetting the biggest returns, property investing is NOT a get rich quick scheme.
It’s a long term game, but you have to makea start! Making a start now on a property that producesa positive net cashflow each month, is better than waiting months or years for a propertythat produces a slightly higher net cashflow.
We all know the best way to learn is by doing.
So if you're in a position to buy, get started! Now let me tell you, the fact that you arewatching this video, and if you’ve seen my Getting Started Playlist which I will linkin the description and throw a card up on the screen just in case you haven't, you willalready be way ahead of other people who are considering investing, and those falling intoinvesting as an accidental landlord, in terms of preparation and finding a good propertythat’s in demand on the rental market.
So don’t think you need to find yourselfa mentor.
When starting out, spend your money on aninvestment property, NOT a mentor.
You’ve got this! You can do it! This weeks question comes from Michael Collinson:”“Well done with the new look I like it” Thank you very much Michael.
“What video editing software do you use? I’ve just started using Power Director 14.
Do you use a green screen to get yourselfshowing in front of the background? I use a Mac and the first video editing software thatI used was iMovie the first 25 or so videos I released were edited on iMovie I then decidedto upgrade to Final Cut Pro (or FCPX) Final Cut Pro 10 and I love it it’s brilliantthere is so much more you can do with that compared to iMovie and I’m learning allthe time everytime I create a video I try and learn something new try and add somethingso we will see how that goes.
Yes I use a green screen and this is somethingelse I’m learning all the time you have to get the lights right the camera settingsright it can be a pain at times but I wanted to use it because I don’t have a plain wallin my house every walls got a picture, a photo, a mirror, or a clock on it and I didn’t wantanything in the background that would distract the viewer so that’s the main reason forusing green screen but it’s also good because I can throw up graphics or other bits of informationwhile I’m still doing the talking head stuff in the hope that it will just add to the videoexperience so yep that’s why.
I buy all my equipment on Amazon because Ifind their prices are very competitive and their Prime service for next day deliveryis fantastic.
I have upgraded some kit over time I’vegot a new camera stand a new green screen some other bits and pieces and I’ll linkto everything I’ve purchased and would recommend down in the description so that you can checkit out for yourself.
Thanks for your question Michael and keepup the great work on your channel I’ll link to it down in the description so that otherpeople can visit it and if you have a question that you would like me to answer you can askme in the comment section below or send me a message on my social media platforms orthrough my blog.
Please like and share this video if you foundit useful and if it’s your first time here definitely subscribe so you won’t miss anyof my future videos which will all be geared towards helping you start or improve yourproperty business.
Thank you so much for watching and I’llsee you in the next video.
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FAQs on Ltd Co borrowing for buy to let
Welcome to Property Investments UK,and today we're going to be looking at a couple of client's questions.
This one is regardinghow to best work out rental demand, so if the property is going to be popular when youcome to rent it out.
The question is "Hi, Rob.
Hope you're well.
Just a quick question.
What is the best way to work out rental demand?" There's a couple of ways to do this, whetheryou're looking at maybe single lets or HMOs which are classed as houses of multiple occupation.
They're slightly different, you see, depending on how you're looking to see what the levelof demand in a particular area for those types of listings.
The first way is to simply checkhow many listings there are in an area and how long they've been on the market for.
Ifa property's been on the market for a long time, available to let, it might be somethingto do with that property or it might be an indication that in the area, there might be toomuch supply and not enough demand, so it might not be the best of area to currently buy inor you need to do something slightly different with your property strategy in terms of providinga slightly different type of property or different standard or property to make sure yours isrented over and above anyone else's.
Essentially you're looking to see how much propertiesthere are in an area and how long they've been on the market.
That's key for not only properties that arecurrently showing as lives, properties that are available to let, but it's also good tohave a look at properties that have currently lets, so when you're looking at Rightmove andZoopla, they're the two main property portals you'll probably be using on a day to day basis,you can check on there or tick a filter that gives you access to properties that have "LetAgreed" on it.
If you do a property search in your chosen area, so whether that's Manchesteror Liverpool or London, whatever the location might be, and tick "Property" or "Let Agreed"it'll give you an indication of how active that property market is and how many of thoseproperties.
If you're showing 50 property listings and only 2 of those are let agreedthan maybe there's a bit too much supply.
If you're showing 50 listings and 20, 30,40 of those are let agreed, then you can have a bit more confidence and more active demandor buoyant area.
One thing Rightmove and Zoopla will also showyou is how long the listing has been live, so you can see when that listing first cameon the market.
For example if you're checking listings in March and the listings showingwas 1st of January or was 2nd of January, you know it'd been on the market for a coupleof months.
That's probably an indication that the market isn't that buoyant.
As we saidearlier it might be a problem with that particular property, either the description, the photos,or the type of listing, but I'd also look at not just one property but a couple of otherdifferent listings in that area to see if maybe is actually the area.
There's just notas much demand for rental properties.
Obviously the key thing to look for is thelowest listing time possible, so if you're in a very buoyant area those properties willbe coming on the market and then getting rented very quick.
If they're only on the marketfor a couple of days, perfect.
If it's a couple of weeks, that's generally okay.
That's probablyactive for most locations around the UK.
If it's been on for a couple of months then that'sprobably an indication that it's not as quite an active area.
When it comes to HMOs we tend to use slightlydifferent property portals, so Rightmove and Zoopla is fantastic for straight forward vanillabuy to lets to check that kind of rental demand, but the majority of listings for HMOs or sharedaccommodation, individual rooms, is going to be using the main website if the momentis Spare Room.
You look for something similar.
You look for the level of listings, the amountof kind of demand and supply within these particular areas and how long listings havebeen live for.
You just follow the same kind of process just use probably slightly differentportals.
For straightforward vanilla buy to lets, Rightmove and Zoopla are great.
If you'relooking at HMOs then Spare Room is great, so hopefully that helps give you a bit ofan indication of how to check the rental demand in any particular area.
Thank you for watching this video.
If youlike this content and you'd like to join our free online property training course, we'vegot a link for it on this page and in there we cover a range of different property strategiesto help you get started either building a long-term property portfolio or creating cashflowing property business.
We also look at ways to increase your return on investmentwith any of the properties you may be considering, and we also have a couple of cheat sheetsand downloadable documents in there as well.
Simply click on the link to join the freetraining course today.