As an Independent Buy to Let Mortgage Broker Fox Davidson Arrange All Types Of Buy To Let Mortgages Including; HMO's, Multi-Units Under One Freehold, Ltd Company Buy to Lets And Property Portfolio Finance.
Buy to Let.
Buy to let is an ever evolving market. In 2017 tax changes came into force that made significant changes to the way investors approached buying property to let out.
Gone are the days when you could simply decide to retain your current main residence and rent it out without too much consideration other than whether the rent covered the mortgage payments.
Tax changes to stamp duty have resulted in an increase of 3% to stamp duty rates for any client owning more than one residential property. In addition from April 2017 landlords are unable to offset mortgage interest against rental income. From 2017 gross rent is used to determine your income tax rate and a % (reducing each tax year until tax year ending 2021) can be used to reduce your tax bill.
The consequences are that careful consideration must be given to how you will buy a property and you should consult your accountant as well as seek specialist tax advice.
Before considering to invest in property you should consider:
Why are you investing in property, is it to provide an income or is it for capital gain, perhaps it is both?
How long will you hold the investment?
In what entity will you purchase the property, will it be held in your personal name, a limited company or held in a pension fund.
What type of property will you purchase?
How will you manage the property?
There are also important considerations to be made with regards to how the lender will calculate the loan you can have. A review of the buy to let lending market was undertaken by the Bank of England Prudential Regulation Authority (PRA). As a result, from January 2017 lenders have had to be more stringent in their underwriting standards with particular attention paid to affordability.
As of January 2017 lenders subject to the PRA rules have adopted a general rule for ‘rent to loan amount’. The rent must be equal to 145% at a notional interest rate of 5.5%. Some lenders have gone a step further and will also factor in your income, this can be a good or a bad thing depending on your personal income.
The above rules do not apply to those lenders that are not regulated by the PRA rules and also to the fixed money of 5 years or more. This is why you may find you can borrow more if you take a 5 year fixed rate rather than a 2 year fixed rate. The rent to loan calculations is also generally better if you purchase in the name of a Limited Company.
Each client’s situation is different and it is important to state that a 5 year fixed rate mortgage was taken out in the name of a limited company may not be the best advice for all clients. It is imperative you seek the advice of tax specialists and for mortgage purposes that you speak to a whole of the market buy to let mortgage broker, one that has access to all lenders.
Typical buy-to-let terms.
As an independent UK buy to let mortgage broker we have access to thousands of products, and consequently we can offer a wide range of buy to let mortgages for all types of property and for all types of situations. Below is an example of some of the terms we can secure:
Regulated consumer buy to let mortgages (where your tenants are family members)
Our Buy to Let Mortgage Advice.
Fox Davidson provide quality, independent buy to let mortgage advice. We will discuss all of the above options with you and can refer you to professionals such as accountants and solicitors that can provide you with advice to help you make an informed decision.
With access to the whole of the market, we can help clients fund property cost effectively and with a clear investment plan. Fox Davidson secure finance for first-time landlords through to seasoned professional property investors.
We work with lenders including high street banks, private banks and broker only lenders to bring our clients market leading terms. We secure finance for all types of situations from a standard first-time landlord or let to buy mortgages through to more complex funding including finance on multiple flats under one freehold, HMO’s, short leasehold property, student lets & buy to let finance for expats.
We take a time to understand your current situation as well as your long-term goals for your investment and ensure that our advice is tailored to each individual situation.
If you have a property portfolio and require property portfolio finance then please take a look at our Portfolio Management Service.