Buy To Let News

Buy to let investment properties may appear to be the easiest method of building a second income but it is important to bear in mind the long term implications of this kind of investment as without careful planning you may end up paying out more than you had initially anticipated. A buy to let property is generally regarded as a long term investment and the decision to purchase should not be taken lightly as it can take quite a long time to get your money back once it has been invested if you revert your decision. A buy to let investment should be regarded as a small business which requires the owner to take on various responsibilites and is accountable to entities like the tenant, the mortgage lender, the council and the tax office.

To know whether buy to let property investments are right for you or not, you need to ask yourself the right questions such as:

• Will I earn enough in the near future so as to take care of my monthly instalment commitments and other expenses in case I am unable to find a tenant who pays the desired amount of rent?

• Will I be able to bear phenomenal losses in case there is a slump in the real estate market?

Will the but to let mortgage loan affect my creditability; will I be able to apply and remain eligible for other types of loans in the future?

You need to consider all the costs involved in investing in your buy to let prioperty before you sign on the dotted line. For sure, you will be required to shoulder the costs which relate to buildings insurance of the property, ground rent, and service charges and letting costs. There is the ongoing costs of repairs and maintenance to the property which is the responsibility of the landlord since not many tenants would consider moving to a house in a dilapidated condition.

There are goverment regulations concerning fire and saftey codes for gas and electrical appliances so there are potential expenses which relate to the repair, maintenance and certification involved. You might also have to consider legal costs that might arise in case your tenant starts defaulting and refuses to move from your property.

Before making any decision, you need to carefully assess your current and future financial position if you want to achieve the best possible return from your buy to let property investments. Making a profit from buy to let property is not as easy as it may seem so it is best to conduct careful research before going ahead with the purchase.

The Government introduced new buy-to-let regulations in April 2006 and 2007, and plans to increase the regulatory burden on landlords next year hwoever the vast majority of buy-to-let investors have nothing to worry about as the main target for the Revenue will be those who are selling properties and not declaring the sale for capital gains ta.

Landlords must pay stamp duty on their investments, income tax on their rental payments, and capital gains tax on their profits when they sell their property. When it comes to income tax, there are permitted expenses which can be deducted from the rent before tax to reduce the tax burden on the landlord. For example mortgage interest payments, letting agent fees if applicable, legal and accountancy fees, buildings and contents insurance and maintenance and repairs.

Capital gains tax is payable at 40 per cent on any profits over and above the tax threshold which is currently £9,200. So the longer you hold on to your investment property, the lower your eventual capital gains tax  bill will be. This is because taper relief reduces the amount of capital gains tax that is payable by 5 per cent a year after three years up to a maximum reduction of 40 per cent.

Just like any other kind of income, a buy to let property is subject to tax. Here are a few tax tips to be aware of as there are certain expenses you can offset against the tax bill

1. The largest amount is likely to be your mortgage payment, however this can only be the interest part of the payment.

2. Any legal fees or insurance payments (ie buildings , contents etc..) can be claimed back

3. The expenses involved in any ‘wear and tear’ can be offset to a maximum amount of 10 percent of the rental income.

4. Some kinds of fairly large refurbishments can be offset. For example, fixing a leaking roof would qualify, however, major home improvements like house extensions or loft conversions would not be permitted as a tax break.

From October 2008 landlords will need to provide energy efficiency certificates for their properties. The cost will be around £100 every 3 years.

There are an estimated 850000 UK landlords so this is a fair amount of certification and additional red tape following the announcement of the ‘tenants deposit’ scheme.

These certificates are the same as the ones which are issued by the much publcised ‘HIPS’ program which will be launched this year. The buy to let property will be graded for its energy efficiency by a goverment appointed inspector. However, there is some concern over the guidelines which have not yet been published.

Although in Europe engery inspections are made every 10 years, in the UK the proposed interval will be every 3 years for buy to let properties. The reasoning behind more frequesnt checks is the sheer volume of buy to let property in this country and the goverment is determined to make this part of the property sector more energy efficient.

The scheme is proving a little controversial amongst landlords as many see it as  just another way of penalising investors, many of whom will be relying on their rental property incomes into retirement

Finding the very best buy to let mortgage which meets your requirements can be a time consuming task as there are so many products available. It can be a little daunting at first but once you get familiar with the deals and terminology you should find that it becomes easier with experience. But it really is worth spending time researching the mortgage market as discovering the right product will be crucial to your success as a property investor. Now here is a little advice: Make sure you have a buy to let mortgage calculator at hand when you are searching for the best deal. You can find such a calculator free online if you make a search query. This handy online tool will help you make immediate comparisons between the products on offer.

Buy To Let Investment

A property purchase is a very large investment. It doesn’t matter if you are purchasing for your own use or whether you are buying to let out it is an investment which should be taken with extreme care and attention. Securing the best buy to let mortgage product can ensure that you maximise the profit on your property investment so the right advice and guidance is very important. When you have found the right buy to let deal - take action! Don’t wait…make your move. To do this, you will need to have your funds in place so that you can clinch the deal before your competition moves in. Buy to let is a long term investment so you need the same ‘mind-set’ when you purchase property as you would to if you were making a large investment in the stock market.

Buy To Let Rate

Its true that Buy to let mortgage lenders will offer their best buy to let mortgage rates via buy to let mortgage brokers. The broker may charge a fee for their services. Don’t be immediately put off by this as you may find that overall, the deal is better than a regular high street bank offer and the savings can be much more particularly if the broker has exclusive access to some of the best offers. Use an on-line buy to let quote system to compare mortgage products, rates and options. Firstly, it is obviously advantageous for you to secure a mortgage deal with interest rates set as low as possible. However, there may be other aspects to deals whcih may be more attractive to you even though the rates are not the best. In addition, depending upon your own forecast as to how the economy will perform over the coming years, you may think that it is a good idea to protect against further interest hikes by fixing your interest rate for a pre-determined number of years.

Buy To Let Lender

Lenders normally suggest that the rental income each month represents at least 130 per cent of the monthly mortgage payment. Lenders will calculate the absolute maximum buy to let mortgage laon based upon the potential income achieved from the property.

Buy To Let Products

Some mortgage brokers, may be able to source exclusive mortgage products and reach formal mortgage offer stage in less time than if you were to approach a mortgage lender directly. The most successful landlords will use some of the best buy to let mortgages to fund their buy to lets and with buy to let mortgage products becoming more sophisticated and competitive the right buy to let financing can ensure you maintain your investment property portfolios in such a way that you are always working to the most optimum cashflow situation. There are new buy to let mortgage products being launched all the time. This market is very competitive so it is becoming easier and easier to meet the lenders criterea.

It really could be either of these, but the very best buy to let mortgage will be the one that suits your very own personal needs and circumstances.

If you intend to invest in property then it is very likely that you will need a Buy To Let Mortgage. This kind of mortgage is different from a regular residential mortgage since the criteria for lending is based upon the rental income that the property can achieve rather than the buyers income assesment. Most banks and building societies can offer Buy To Let Mortgages, however, there are many specialist mortgage lenders which specialise in this kind of product and can offer some very attractive deals. Most high street banks will only look at offering up to 80% of the value of the property whilst specialist lenders may off 90% or even 100% in the case of gifted mortgages.

Buying Property

Buying property to let has become increasingly popular to the UK investor. Buy To Let mortgage lenders differ in approach. Buy-to-let borrowers do have to jump through some extra hoops to satisfy mortgage lenders. The buy to let mortgage term can be anything between 5 and and 45 years. When buying to let it is important to know the market in which you will be trying to let your property.

Buy To Let Property

The more you are willing to do a property up, the higher the potential profits. There is the danger that the property could lie empty for long periods and the market could suffer a downturn. There is a real advantage if your buy to let property is close by as you will be able to manage the property yourself. However, if you are employing the services of an agent then the vicinity of your properties is not a real consideration. One rule of thumb many buy-to-let investors apply is to factor in the property sitting empty for two months of the year this gives a substantial buffer. Finding the right property is key to the success of your long-term strategy.

Buy To Let Mortgages

Popular perception is that buy-to-let mortgages are hugely expensive and very restrictive. However, the interest rates available for buy to let products is really not that much higher than a regular residential mortgage. Landlords also have a choice between interest only and repayment mortgages. To begin with, buy to let mortgage lenders do not use the applicants income solely as a basis of approval, instead they base their decision mostly upon the likely rental income that the property will achieve. Over the long term, though, both the capital value of the property and the rental income should go up, making buy-to-let a balanced investment. Usually, regular buy to let lenders will demand the rent to cover at least 125% of the monthly mortgage payments. However some specialist lenders are more relaxed and may only require 100% full coverage.

Buy to Let mortgages are not regulated by the Financial Services Authority. Even though buy to let property is a fairly safe investment taking into consideration the historical movement of house prices, you still need to check the market very carefully before going ahead with a purchase.

The prices of houses has rapidly exceeded the pace of rental increases and this has posed a problem for remorgaging for maximum release of equity.

 Why?  Well, although in the past 5 years or so, the averge buy to let house has more than doubled in price, the monthly rent has increased marginally over the same period in comparison. So when an investor wishes to maximise their capital investment by remortgaging the property to release the equity to expand their portfolio, there is the big issue of rental assesment.

Many lenders will look at the property and the kind of rent that it is achieving and will only remortgage to the new rental assessed amount.

So how does an investor, release the vast majority of the tied-up equity in the buy to let property quickly and easily.

 Easy. They take advantage of a ‘no proof of rental income required buy to let remortgage’  which will allow a remortgage based upon the valuation of the property alone. The rent doesn’t even come into it!

Let Mortgages offer the best ‘No Proof Of Rental Buy To Let Mortgage’ on the market. With is product you can remortgage to 90% of the LTV with ANY proof of rental income.

Independent research, conducted on behalf of Paragon confirms that investors intentions are to grow their portfolios confirming that the buy to let market remains as strong as ever.

The rising cost of borrowing is not perceived by investors as a negative factor. For some investors they see it as opportunity for some sharp negotiation with the purchase price when the market gets a little ‘tight’ and there is the fear of a crash or price stagnation in the air with all the media focus on interest rates.

A 15% discount off a new build or second hand property can gift the investor a mortgage deal with no deposit and an instant equity in the property from day one.

 For those first time buyers who are having trouble raising a deposit for the first rung of the property ladder there may be the answer - in buy-to-let…

Check this out..

A New Buy to Let Mortgage Gifts First Time Buyers a Lifeline

If you have managed to negotiate a 15% discount on a property purchase with the view to let the property for at least 2 years then a 15% Builders Or Gifted Deposit But To Let Mortgage is the perfect route to finance the project. After all, you do not need to invest any of your own funds with this kind of Buy To Let Mortgage. It really is the ideal no money down mortgage deal.

But does your property ’stack-up’ rental wise and does it really need to?

Well, if the rental assessment of the property matches 100% of the monthly mortgage payment then it automatically qualifies for the mortgage lending

If you have a property in mind Click on the following link to check if it qualifies: Buy To Let Mortgage Calculator

If it does not qualifiy you can STILL get this kind of mortgage for the investment. All you need to do is check that you have sufficient salary and outgoings to make up the mortgage shortfall and you may proceed. Click on the following link to check if you are able to qualifiy with a mortgage shortfall: Buy To Let Mortgage Calculator

Call 0845 873 7495 or apply online at: Let Mortgages to process