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.
10 year fixed buy to let mortgage
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.
You maybe in full-time employment and don’thave any free time to manage your investment properties, or maybe your like me and youdon’t feel like you have the knowledge or experience to manage your investment propertiesand the tenants.
Or maybe you would simply prefer to spend your time in doing other things.
In which case you will require the help of a letting agent, and in this video I willtalk through the different levels of service that letting agents provide and how I go aboutfinding the best one.
Hi, I’m Andy Walker from monoperty.
Com whereI blog online about my journey as a property investor and landlord, sharing what worksfor me and what doesn’t, to help you start or expand your property portfolio.
In recent years there’s been a number ofonline letting agents appear with some very attractive fees, however, I don’t have experiencewith these, my experience is based on the traditional type high street letting agency,which is what i’m going to be talking about today.
If I do make the move to an onlinecompany one day, I will be sure to provide feedback to you when that day comes.
Ok, First of all, let me tell you about thetypes of services letting agents provide, there are 3 different types and each attractit’s own level of fees: For a Tenant Find service the letting agentwill advertise your property online using popular portals like RightMove, Zoopla andOnTheMarket.
They will answer queries that they receive and conduct any viewings withprospective tenants.
They’ll also carryout tenant referencing and credit checks.
Fees will vary, but to give you an idea, Iwas recently quoted £195 + VAT to have a property let on a tenant find basis only Next is the Let Only and this package includesall the services provided in the Tenant Find plus the issuing of the tenancy agreement,taking the deposit from the tenants, and then registering that deposit with a deposit protectionscheme, setting up any direct debits and submitting meter readings to the utility companies.
They may also offer to provide extra servicesthat will incur additional charges like creating a inventory, providing an Energy PerformanceCertificate and a Gas Safety Certificate.
It can be cheaper for you to arrange thesecertificates as letting agents typically charge a percentage for spending time in making thearrangements, so it depends on how much time you have to get those certificates in place.
You can expect to pay anywhere between theequivalent of 2-4 weeks rent for this service.
So it could be that your fist months rentis spent in getting tenants into the property.
And the last one is the Full Management Servicewhich is the most expensive but it’s the one I use as it helps to keep my time free.
This includes all the services of the Let Only package plus regular inspections, dayto day management of the property and rent collection.
Now with this service it means if the tenantshave any questions or any issues, they will contact the letting agent instead of me.
Theletting agent fees will be a percentage of the rental income over the letting term andwill be dedicated from the rent that’s received.
The fees typically range from 6 to 15 percentdepending on the type of property.
I did manage to negotiate a fee of 5.
5% for one of my propertieslast year, but I take on any arrangements and supervision of any repairs that may needdoing which is very rare.
So with this service the letting agent findsthe tenants, vets the tenants, takes the deposit, issues a tenancy agreement, secures the depositin a protection scheme, collects the monthly rent, pays the rent into my bank account lesstheir fees and handles any phone calls from the tenants.
Now when it comes to finding a letting agent,the easiest method is probably word of mouth.
If your lucky enough to know someone in thearea who is using a letting agent that they would recommend because they are happy withtheir services, then that’s great, but I would also recommend doing your own research.
I approach at least 3, and the first thing I do is look online for other properties thatthey are marketing.
I look for good photo’s and good descriptions.
The properties withthe best marketing will attract the quickest viewings.
Getting a prospective tenant toenquire and getting them through the door of the property is what you want to achieve,because hopefully the property will sell itself.
And obviously, the least amount of time theproperty is on the rental market, the better.
I also like to visit their offices to havea look and get a feel as to how they operate.
Property is very much a people business andif I have two or three agents that appear to be good at marketing and are good at conductingthemselves, then I will typical choose the agent who I resinate with most.
To help you and your letting agent, make sureyour property is in a good state of repair and that it’s good to go because it willsave you and your letting agent time and most issues are easier to be fixed when the propertyis vacant anyway.
Having a letting agent can also help to makesure you are compliant as a landlord.
And the introduction of the Right To Rent Schemehere in the UK in February 2016, is a good example of that.
They should also check that the relevant safetycertificates are in place and my letting agents always contacts me and reminds me when thosecertificates are due for renewal.
That said, I also keep a log for myself so I know whenthey’re due, because ultimately landlords are responsible for the safety of their tenants,and if things go wrong, it will be the landlord that’s summoned to court and not the lettingagent.
Before I finish, there are two other pointsworth mentioning for UK landlords.
Since October 2014, all letting agents mustbelong to a redress scheme which provides a free service for resolving any disputesbetween the letting agents and their customers, whether that’s landlords or tenants.
I willlist the 3 government approved redress schemes in the description box below, but rememberto ask your letting agent which scheme they belong to.
And for transparency, since 27 May 2015, lettingagents must display all their fees and charges for both landlords and tenants, on their websiteand in a prominent place within their offices.
And you should always check the associatedfees before entering into negotiations with a letting agent.
This is my last video of the ‘Getting Started’series.
I hope you have found this video, and the seres useful.
If you have watchedall 8 of them, you now have a basic understanding and knowledge of how to start investing inproperty and become a landlord.
If you still feel that you have some unanswered questionsabout finding a letting agent, or starting out in property investing and being a landlord,then please leave a question in the comment box below or head over to monoperty.
This is just the start for this channel though, I already have over a hundred other videoideas and I will continue to release one a week which, of course, will all be gearedtowards helping you start or improve your property business.
So if this is your firsttime visiting this channel, please subscribe so you don’t miss any of them.
If you foundthis video useful, please give it a thumbs up, it will help me out a ton, and if youthink anyone else will share benefit from seeing this video, then please share.
Thankyou for watching this video to the end, keep up the good work and I will see you in thenext one.
What Is The Best Way To Work Out Rental Demand and Supply?
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.