Buy to Let mortgages

*Not all Buy-to-let mortgages are regulated by the Financial Conduct Authority.

Purchasing a to-let requires a lot of thought, the following are some some things to consider when making this decision:

• Have you accounted for all your upfront costs? These include a deposit for the house, legal fees, stamp duty, and survey fees.
• What can you comfortably afford to borrow? Make an appointment with My Mortgage Expert to discuss what you can afford to pay back each month before you go house hunting.
• What do you earn? You will need to tell us and confirm it typically with your last three months' pay slips and your P60 tax certificate for last year. If you are self-employed, we need to see your trading accounts for the last three years.
• How much rent do you expect to earn through the letting of the property?
• How much will you be able to borrow? When we fully understand your current income and expenditures, we shall be able to tell you, based on the repayments you can afford to make.
• Which mortgage suits your present and future needs? My Mortgage Expert will spend time discussing this with you before providing you with full advice and recommendations on a suitable mortgage for you.

 As well as your mortgage payments, you may need to cover the following costs:

• Buildings insurance.
• Contents insurance (if your property is furnished).
• Maintenance costs.
• Periods when you are receiving no rental income because the property is empty or the tenants have fallen behind with their payments.
• Increases in your mortgage repayments due to a rise in interest rates, which you may not be able to recover immediately from rent increases.
• The profits from renting property are taxable but you may be able to offset some of the costs you incur as a landlord against tax.

You will have to pay the following taxes: Income Tax, Stamp Duty (when you buy your property), and Capital Gains Tax (when you sell it). There may also be a liability to inheritance tax when you have passed.

You can find out more about the tax treatment of income from rented property by seeking professional guidance from a qualified tax specialist, and you can also visit: www.gov.uk/browse/tax 

You are now moving to a new site which is not regulated by the Financial Conduct Authority. We give no endorsement and accept no responsibility for the accuracy or content of any sites linked to this site. Click only if you wish to proceed.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

• You need to carefully research the area where you want to buy your property. You can either do this yourself or employ a specialist letting agent to help you. If you decide to do it yourself, you will need to speak to local estate agents, employers, and the local authority.
• Families will have different needs to couples and single people. The majority of tenants are working professionals, on company or overseas relocations. You need to make sure they are fully referenced. If you are using an agent make sure you know the profile of the type of person that you wish to let your property to, at the same time you need to be mindful that the tighter you are with your requirements the longer it can take to find a tenant.
• Desirable properties will be conveniently located to public transport, shops, bars, schools etc, and have parking facilities close by. When you are looking for a property, try to remember that it is not you who is going to be living there. Look at it with an objective eye and think about the property from a tenant’s point of view.
• You need to consider buying a property whose size is attractive to people looking for rented accommodation in that area.
• A property that is well maintained will be much more in demand than one that is run down. Therefore, a newer property may be more suitable if you have limited time or no interest in DIY.

Your aim will be to cover your costs and make a profit. It is a good idea to talk to a Mortgage Adviser before you look for properties as lending criteria will differ and rental charges are a key factor. Research the market conditions thoroughly as charging too high a rent will put off prospective tenants. 

If you decide to manage it yourself, you will be responsible for:

• Finding tenants.
• Checking tenants’ references.
• Writing a tenancy agreement.
• Collecting the rent.
• Maintaining the property and any furniture provided.
• Dealing with any problems.
• Carry out repairs to the property.
• Ensure the safety of gas and electrical appliances.
• Ensure that any the furniture and furnishings meet fire safety requirements.