Buy To Let Funding
A lot of people in the UK are investing in residential property, with the intention of letting it out. Investment in buy to let properties is often viewed as an alternative to a pension. Buy to let investment can offer income and capital growth so you may experience a regular income from rent and a steady capital appreciation if house prices continue to grow.
Residential mortgages will always include clauses that will prevent you from letting out the property without the consent of the mortgage company. If consent is given, it is usually on a short term basis. A buy to let mortgage doesn’t contain such restrictions and is specifically designed for buy to let purpose(s).
Buy to let mortgages are similar in principle to residential mortgages, but as they are treated as a business transaction they are not subject to the same regulations as residential mortgages. As a result, flexibility, fees and rates then tend to be higher.
Some key differences between buy to let and residential mortgages:
- The fees tend to be much higher
- Interest rates are usually higher
- The minimum deposit for a buy to let mortgage is 25% of the property’s value
- Many buy to let mortgages are interest-only
- Most buy to let mortgage lending is not regulated by the Financial Conduct Authority (FCA)
Major announcements have been made in recent budgets that affect everyone who owns buy to let residential property. Stamp duty and mortgage interest tax relief rule changes are currently being rolled out changing the economics of owning buy to let properties and there are now major tax and other difference(s) in owning buy to let properties personally or through a company. We do not offer tax advice but our directors are professional buy to let properties owners and can help you navigate the buy to let landscape.
Want to know more? Get in touch today and let us guide you through your options. We know all the right lenders and we treat every application on a personal basis so that your search is tailored to your requirements. That way, you can be assured we’ll find you the best rate and the best financial product for your needs.