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.
Buy to Let Deal of the Day 11th Jan 2017
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.
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.
Do You Need A Mentor To Buy An Investment Property As A Beginner? (Buy To Let)
Rental property management - should you usea letting agent or do it yourself? Managing your own rental property can sound appealingto some people when they first start out because they’ll know they will save on the lettingagent fees.
But you should consider whats involved and be honest with yourself and thendecide whether property management is right for you.
I have 3 questions that you can ask yourselfto see if you have what it takes to be an effective property manager, coming up.
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.
Now it’s true, letting agents do not haveany special qualifications.
Anyone can act as a letting agent.
But what they do haveor should have, are these 3 key areas which you need to check and decide as to whetheryou can deliver them yourself.
Do You Have The Knowledge? Do you know all the steps you need to taketo comply with the law and protect your asset? For example, securing the tenants depositin a Deposit Protection Scheme, checking that prospective tenants are eligible under theRight To Rent scheme if your letting in England.
And you need to be aware of any certificatesand any licensing for your area depending on the type of property and number of occupantsthat you will have.
A good letting agent will know the answers to all these questions andmore, and they will have systems that keep them update with both national and local lettingsrules.
Do You Have The Resources? For example tenancy agreements, guarantorforms, background checks for prospective tenants and membership with professional organisationsthat you can turn to for advice or if things go wrong.
As soon as the tenant moves into a property,they become the legal occupiers of that property.
And you don't want to give tenant's that legalright until you know that all background checks, contracts, deposits, and the first monthsrent is in place.
And the last question is, Do You Have TheTime? to run a rental property legally and effectively.
Are you willing and do you havethe time to take and respond to phone calls from your tenants at all hours of the dayand night? And can you handle co-ordinating all the maintenance? I think lots of inexperienced landlords makethe mistake of not putting value on their time.
They think they are saving money bymanaging their properties themselves, but they’re not getting paid for the time thatthey’re acting as a property manager they are simply just saving 5 - 12% on their income.
I would like to point out that if you do usea letting agent, you as the landlord are still responsible for the safety of your tenants,but by employing a professional agent, you will reduce the risk of anything going wrong.
There is risk associated with any type of investment, and I like to reduce that riskwas much as I can.
As a landlord, your aim is to provide an excellentservice to your customers, otherwise your customers are not going to stay for long.
If you don't have the time, knowledge or resources to serve your tenant, you will not be providinga good service.
If you have been able to answer yes to my questions and you have a passionfor property management, then brilliant, and I wish you all the best, but if your juststarting out, I don’t want you to think that property management is easy and thatit’s a good way of cutting back on costs.
Now, everything I have mentioned in this videocan be learnt.
So why not take one step at a time if your just starting out on your propertyinvesting journey? I was a landlord for over 8 years whilst I was in the Army and I useda letting agent because I didn’t have the time to manage my properties.
But I pickedthings up during that time and got a feel for what was required to meet the standards.
Once I retired from the Army, I reviewed my situation and decided to continue using aletting agent but I dropped the maintenance services.
If any repairs are required, theagent will now contact me and I will decide whether I take it on or I give it back tothem.
Letting agents typically charge an administration fee for arranging any repairs or any maintenanceand issuing of any certificates so I decided to take that on and save on some of the costs.
Before I finish there is one piece of goodnews, and that is if you do use a letting agent, all their fees are tax deductible.
If you have any questions about property management,please leave a comment down below and if this is your first time visiting this channel definitelysubscribe so you won’t miss any of my future videos that will all be geared towards helpingyou, start or improve your property business.
Thank you so much for watching, please likeand share this video if you found it useful and I will see you soon.
and you don’t want to give tenants …….
argh! which you need to be aware of ….
argh! and … huh (exhale).