Buy To Let Mortgage UK
The UK has seen a steady rise in house prices in recent years, and many people are seeing property as a safer alternative to investing their money in the stock market, one particular area of growth is the buy to let approach.
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The rise in house prices has had two major effects in the buy to let arena, the first is lessening the risk to the investor as the house prices are in a trend of gradual rise according to many market analysts, and so if the investor decides to sell a few months or years down the line they will be likely to make a gain on their investment. The second effect of the large price rises is the reduction of the affordability of houses to many people, and as such they have no option but to rent and so increasing the number of potential tenants further strengthening the landlords position.
In order to purchase a buy to let property you will generally need at least 20% of the value of the price as a deposit, with the remaining 80% coming from the buy to let mortgage lender. There are a number of lenders in the UK who offer buy to let mortgages, and the interest rates on these are generally similar to the rates offered on owner-occupier mortgages.
When considering a property for buy to let, it can pay to consult with a letting agent who is a member of The Association of Residential Letting Agents (ARLA), which is a professional and regulatory body for letting agents. An ARLA member should be able to advise you on what properties are popular in their area, and the steps that you can take to ensure that your buy to let property reaches its full rental potential.
Choosing the right mortgage is important, you will need to take it out over the right number of years (this ranges from five to forty-five years for a buy to let mortgage) and ensure that the mortgage repayments are lower than the rental income by at least 30% if the venture is to be profitable. Before being accepted for a buy to let mortgage in the UK the lender will carry out checks on your credit history and status to determine if you are able to meet the repayments, most will take into account the potential rental income when determining this.
If you wish to invest your money in a buy to let property, then you will most probably require a buy to let mortgage in order to obtain the additional financing needed to put the plan into action, there are a number of buy to let mortgage lenders – we have compiled a list of the best buy to let mortgages to help you to find the best deal.
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