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 I'm James Hill from The Locks Heath Property Blog and this is my Buy to Let Deal of the Week.
Now here I am in Lawson Close in Lower Swanwick where Walker & Waterer have just listed a three bedroom terraced house for offers in excess of £240,000.
Now it looks in really good condition with very little to do in order to get your first tenant.
As you can see from the photos it's got a recently refitted kitchen, a nice modern bathroom and what looks like recently fitted carpets throughout.
In today's rental market this property would rent out around £950 per calendar month.
If we times that rent by twelve to give us the annual rent and divide that by the asking price, in this instance £240,000, it gives us a nice healthy yield of 4.
As I said, this is a really good opportunity to snap this property up so get in touch with the guys at Walker and Waterer and they'll be happy to show you around.
If you want any further information about the Locks Heath property market give me a call on 01489 570011.
I'll see you soon.
FAQs on Ltd Co borrowing for buy to let
It's Rob from Property Investments UK.
In today's video we're going to be looking at what is professional buy to let and howit maybe could be suitable for yourselves or what to kind of consider and how to tryto find those great professional buy to let property deals.
So professional buy to letis quite simple in terms of, I suppose, the methodology or the type of deals it is.
Sobuy to let effectively, is buying a property to let out or to rent out.
The professionalaspect doesn't mean in terms of how professional or professional you are in terms of lettingit.
It's more referring to the tenant type of profile, so there's lots of different tenantprofiles within property of residential and commercial.
Specifically within residential property you could consider investing your money into aproperty deal that then rents out to maybe a student tenant or to what's classed as housingbenefits or local housing allowance tenants, social housing, also professional tenants,which is what the kind of professional buy to let property deals are that we look atwithin our property investments website.
Now when it comes to professional buy to lets,what we do mean with that is somebody that's really earning an income, a wage, and thatjob is effectively going to pay for their rent in that property.
There's a whole rangein terms of scale, so it could be somebody that's on an income of 10, 15, 20,000 a yearor somebody that's on an income of 50,000 plus a year.
It's just a category.
Professionalbuy to let just refers effectivity to somebody that's currently earning their way with anincome and that's what they're going to be using to pay for their rent.
Now on our website we have a number of different property deals, a number of different categories,everything from HMOs through to service accommodations.
Specifically though, with professional buyto lets, I'll pop below this videos some links and some details on what available propertydeals we currently have.
Now, typically on our website we only usually show one videoor, sorry, one property per category, but we do have many other opportunities available.
So if that particular property, is it maybe in the wrong area or you want to look at somethingslightly different, but you like the idea of a professional buy to let, simply sendus a message.
Give me a call and we can run through the different opportunities that wecurrently have that fit that particular type of category or strategy.
So hopefully that helps.
Any questions, don't hesitate to ask.
We just wanted to give youa bit of an idea of what professional buy to let property and what a ready to go kindof deal might look like.
And I put all of those kind of listings, those available dealsbelow this video with some links for you.
Any questions don't hesitate to ask and Ilook forward to catching up with you on the next video.
All the best.