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The British rental market witnessed an increase in Buy to Let Mortgages over the first quarter of 2008, according to new figures. Data from the Royal Institution of Chartered Surveyors (Rics) indicates that a slump in house sales has pushed properties back into the residential lettings market. The Rics residential lettings survey for the first three months of the year states that new instructions to let property rose to 29%, up from -2% the previous quarter, indicating that sellers are having to rent what they cannot sell. More...
An increase in the number of rented properties in Britain could substantially help to meet the country’s housing shortage which could be good news to holders of Buy to Let Mortgages.
Many home owners struggling to sell their properties are also entering the buy to let market in order to take advantage of rising yields and an increase in tenant lettings while they wait for the credit crunch to come to an end.
After reading our guide on buy-to-let mortgages below, be sure to check out our comparison tables for best buy-to-let mortgage options and rates. Through our comparison table you can contact a lender for buy-to-let mortgage quotes.
Mortgage lenders offer specific mortgage deals for properties that are being bought for the purpose of letting. Both repayment and interest only mortgage plans are available – but there is a notable distinction between buy-to-let products and standard mortgages.
The amount you can borrow will vary according to the deposit and expected rental income. Lenders require a larger deposit than they do for standard mortgages and will only lend if rental income is 130% of the mortgage payments.
Many investors turned to property investment after the housing market started to rocket at the end of the last decade. As a result investors see buy-to-let as a tantalising way of making money from a second property. After all, having someone else pay a mortgage on your second home makes great business sense.
It is vitally important that the second property is in the right location, where housing prices are expected to increase. Look out for up and coming areas. Tell tale signs include the opening of:
Who are you looking to rent to? Young professionals will have different demands than students, or say, a family. So ask yourself, do I really need a garden with the property? What about private parking? Also, consider the interior. For example, a young professional will be attracted to a smart property with a power shower rather than a family home with a shower nozzle connected to the bath.
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