Buy to let mortgages are for landlords who buy properties with the purpose of renting them out. The rules are similar to those around a regular mortgage but do have some key differences.
– You want to invest in housing
– Can afford to take a risk, investing in property is risky.
– Already own your own home, you would struggle to get a buy to let mortgage if you do not already
own your own home.
– Need a good credit record
– Earnings of over £25000 a year.
Advantages of buy to let. Property prices are cooling down. House prices have fallen nationally which can be used to your advantage in your property search. Property is a good long term investment, at the minute the rental market is strong. It is unlikely that there will be a shortage of people looking for decent rented property, the main reason being that the younger generation will never be able to afford to buy. Affordable locations still have a growth in house pricing with Edinburgh being number one, the house prices have reportedly raised over 6.7% in the past 12 months. Disadvantages of buy to let.
There are many lenders currently standing in the way of lending landlords money for profit potential. All existing landlords with four or more properties which have already been mortgaged will require to submit their financial details such as rental income for all their properties.
The housing market is currently unstable; it requires political and economic stability which Brexit and the rising interest rates could put under threat. Since April 2016 if you are purchasing a property which is not replacing your main residence there will be a charge of 3% on your stamp duty bill. This is different to regular stamp duty; the extra 3% is charged as a flat rate on the entire cost of the property.