Struggling to find the best buy-to-let mortgage in Worcester? 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.
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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 Worcester the last 2 decades and this has fuelled a growth in amateur landlords looking for quality mortgage advice, this is why mortgage brokers in Worcester 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.
Worcester 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.
Worcester Buy To Let Mortgages.
Some buy to let mortgage lenders in Worcester 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 Worcester 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 Worcester 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.
Hi it's Rob from Property Investment UK andin today's video we're going to be looking at service accommodation or corporate buyto let, what it means and also how to find proper deals that might be suitable for youif you're interested in this strategy.
Corporate buy to let or service accommodationare very similar in terms of the way in which we approach those particular properties andstrategy but effectively let's separate them out for a second.
Corporate buy to let iseffectively where you've got a rental property and buy to let that you would rent out toa corporate tenant profile.
Instead of renting it to an individual, you would rent it typicallyto a company, an organisation that would hire or rent that property for a period of time,usually six to twelve months, but it can be shorter or slightly longer, depending on thecompany.
Then they would look to rent that effectively for high level staff members orconsultants or contractors that would work within their organisation to stay and liveand work in that place for a period of time.
It's much better for them to do that, ratherthan renting out hotels or renting out a separate property and the reason primarily for thatis because this is where the serviced element comes into it.
Instead of renting out justa straightforward buy to let, what they get is more of a service in terms of all billsare included, it's fully furnished.
From a company's point of view, from their clientand the person that's staying in the property's point of view is they can just simply turnover the bag and everything is ready to go.
It's fully look after for them which is great,ticks all those boxes.
It's much better, much more flexible than just going out and rentingand trying to sort out all those bits themselves.
Separate to that in terms of why they wouldn'tstay in a hotel is hotels can be very costly and they don't always have the flexibilityto have that property over a long period of time.
Within the Property Investments UK website,we have a number of different articles and videos about serviced accommodation and thebenefits to this is it's taking the strategies.
I've put some links below this video intothat for you so you can see some further information if you wished.
Hopefully this video is justto give you an idea of what a corporate buy to let, or serviced accommodation propertyis.
I'll also put some links below this video, and available property deals that we currentlyhave available as ready to go investments for you at the moment that fit this particularstrategy.
On our website, for every single categoryI only list one available property deal that's shown on the listing but we do have many moreopportunities available.
If for any reason that property, you maybe want to consider,you like their strategy but you want to look at some other areas or you want somethingthat's maybe got a slightly different kind of rental income, then simply get in touch,give us a call, send us an email.
I'm more than happy to introduce you to different opportunitiesthat we have currently live, available that fit this particular corporate buy to let servicedaccommodation type strategy.
I hope that video helped.
Any questions, don't hesitate to ask.
I look forward to catching up with you next.
All the best.
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Welcome to MFB-TV on Wednesday 14th January.
as is our first broadcast of the year let mewish you much prosperity and success in the year ahead we think you'll be an excitinginnovative and productive year for all aspects ofthe property market and especially the financing there of.
So let's start off first of all with our Complex Buy to Let index resultsfrom the last quarter of 2014 that is available on our website today.
Inparticular I draw your attention to the fact there are now over 800 buy to let mortgage productsout there giving plenty of choice and variety for landlords of all types and needs.
We include now a new lender Fleet Mortgages who have just launched in the marketperhaps better known as the old management team from CHL Mortgage's of yesteryear.
and we are one of six appointed distributors at outset.
remortgaging continues to outstrippurchase activity but actual transaction numbers have goneup in both sectors yields yet again have increased for thevanilla HMO and more complex property typesbut interestingly enough many of you seem too boring slightly less withaverage loan to values coming down across all sectors it doesn't mean you can't borrow moreis just a conscious decision you appear to be making it's a mixed bag for loan amounts acrossall the property types so do dip into the report that's available on the websitetoday now in product news today is the launchof the first 10-year fixed-rate in the buy to let space for some timecoming out to those industry stalwarts at the mortgage works is the headlinerate of 4.
99 percent and a flat arrangement fee of £995 but with some quite eye watering ERC's so by the time you get this news itemour Sales director Steve Olejnik will have published a blog highlights the pros and cons of such anarrangement but it is innovation and well done tothe team down at The Mortgage Works for leading the field so our rate of this week is actually out of Fleet Mortgages with anew product range which is at sixty-five percent loan to valuewhich does seem too suit he lower borrowing parameter that some of you are acting to a two-year fixed at an eye wateringor a very low eye watering 2.
79 percent it's available for purchase and remortgages andis as available to individuals they also have some very good limitedcompany products albeit at a slightly higher rate a slightly higher arrangement fee this onehas a fee of 1 percent it's available on ex local authorityhouses multi-units, leasholds and free holdconversions showing flexibility in the property categories that some other lenders don't choose tooffer.
You don't have to be limited by a maximum number of properties inthe background and while they have an income threshold£25,000 that can be drawn from property and canbe on untaxed property income there is an ERC as you'd expect with such alower rate of 5 percent in the period and this runs until the28th of February 2017 so it's a fixed rate period regards to when you draw it down.
For details of that product, TMW and the whole Fleet product range dospeak to our consultants on 0845 345 6788.