Quick links
Welcome to Alan Bell Mortgages Ltd
Buy to Let Mortgages are mortgages specifically designed for people who want to invest in the property market by purchasing one or more properties and letting them out to tenants. The Owner is then able to benefit from any appreciation in the capital value of the house itself.
They are also likely to be able to maintain the property and meet much of the loan repayment from the revenue realised by letting. The buy to let phenomenon has driven house prices higher over the last few years while making a broader section of rental accommodation available.
Buying a property to let can benefit the private landlord in two ways. Firstly, it can provide a stream of income. Secondly, many Buy to Let landlords purchase property because of the potential for long-term accumulation of capital growth.
There are 3 considerations in Buy to Let Mortgages:
- Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.
- Interest Rate - buy to let mortgages have slightly higher interest rates than standard residential mortgages.
- Larger Deposit - typically a minimum of 15% of the property's value is required as a deposit.
Becoming a private landlord should not be seen as an easy way of making money. It can be riskier and more complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will rise.
When choosing a property to let it is wise to take advice from local letting agents to determine; what type of properties are in demand, and which parts of the area are most desirable.
There are a number of tax issues that need to be looked at in order to maximise your tax position, such as being able to offset your maintenance costs, letting agent fees etc as well as any interest paid on a buy to let mortgage against your tax.
You can visit the ARLA website at www.arla.co.uk for further information on becoming a private landlord.
Other possible considerations are:-
- Property upkeep - maintenance costs for the property.
- Letting agent's fees - letting agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service.
- Ground rent / service charges - applicable to leasehold properties.
- Legal insurance - to cover costs from evicting tenants in the event of non-payment, very important, as this can be very expensive.
- Landlords Insurance – building insurance and contents insurance for the items provided as part of the rental agreement.
- Furnishings - the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your Contents Insurance.
- Gas / electrical appliances - cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.
- Decorating costs - the property may require work ranging from painting, to a new bathroom suite before it is suitable for letting to tenants.
Please feel free to contact us and we will endeavour to fulfil all of your requirements. We will deal with your enquiry in as flexible a way as possible, whether that is face to face, by telephone, post or
email info@alanbellmortgages.co.uk.
Buy to Let is not regulated by the Financial Services Authority.
