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Wellcome to uk Buy to let Mortgages!

 

Buy to let mortgages are a little different from residential mortgages as lenders apply standard checks. Buy to let mortgage are available to single and joint applicants and also to corporate borrowers. Borrowers are not allowed to occupy the property and have to satisfy the lenders’ criteria. Mortgage payments must be covered by rental income. Rental cover is expected to be 125%, but it is possible to find lenders, accepting 110% and even 100%. The minimum deposit required is 15%, but 25% is the most common in this current climate. Lenders perform a standard affordability check and the borrower’s income should be at least ?20,000 a year.

As required by most lenders, properties must be rented on Shorthold Tenancy Agreement and must be insured.

Lenders expect that landlords will comply with current rules and regulations, as for example, to ensure that furniture conform to safety standards.

Gone are the days when buy-to-lets were just for professional landlords. In the past few years many more lenders have entered the buy to let lending market and as a result buy-to-let interest rates have reduced and become comparable with normal residential mortgages.

Instability on the stock market, affordable buy-to-let products coupled with constantly growing house prices have attracted many new buy-to-let investors.
Demand for rental properties in the UK is steadily growing as our way of life is constantly changing. There is a growing tendency for single households. Many young people are unable to buy their first home due to high house prices and a lack of deposit. Migrating workers from the European Union are coming into the UK to work and need a place to stay for a year or so.

Builders were quick to realise, that there is a good demand for certain types of properties and were ready to fill the gap. Unfortunately as a result, some areas became oversupplied with flats. Some landlords have found themselves in a difficult situation, as lenders are now unwilling to lend no more than 75% of the property value and unable to raise their rental prices as there are plenty of competition. Once profitable businesses, suddenly find that they will be lucky to break-even.

If you are one of the above buy-to-let owners or just about to purchase your first buy-to-let property, don’t worry, there are still lenders who offer good buy-to-let mortgages. In the current market it may be more difficult to find a cheap deal, but there is still high demand for buy-to-let properties and with the right calculations, you still can make profit.