We use cookies to give you the best possible experience on our website. If you continue without changing your settings, we'll assume that you're happy to receive all the cookies on our website. However, you can change your cookie settings at any time.

Your Privacy

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalised web experience.
Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

(Req)

These cookies are strictly necessary for the Website to work properly and for us to keep it secure. They are needed to allow users to use the Website and its features, including to move between pages of the website.

These cookies are required

Performance and analytical cookies

These cookies allow us to collect certain information about how a user navigates the Website. These cookies collect information that is used either in aggregate form to help us understand how our site is being used or how effective are marketing campaigns are, or to help us personalise our site for you.

Marketing cookies

These cookies are used to make advertising messages more relevant to you. We may use this data to tailor the marketing and ads you see on our own and other websites and mobile apps, including social media.

Mortgages

Top tips for negotiating the changing buy-to-let landscape

Buy-to-let investments are still proving a popular choice, despite a crackdown by the Government and Bank of England in recent years.

There had been concerns that increased stamp duty and cuts to mortgage tax relief on buy-to-let properties would have deterred investors. However, for many in the UK, the idea of investing in bricks and mortar still appeals, while others feel they can add value to existing properties. Some investors are taking steps to weather the changes, including switching to short-term holiday lets or commercial property, or putting their residential portfolios into limited companies.

We’ve put together our top tips to help those considering investing in a property portfolio or existing landlords who are looking to make the most of their investments, navigate this ever-changing landscape.

Do your homework

With the Government’s plans for the buy-to-let sector, doing your homework is critical. Mortgage interest tax relief is currently being withdrawn in stages, to be replaced by a 20 per cent tax credit. Also, landlords have had to pay an extra 3 per cent stamp duty on property purchases. You need to be able to adapt to the changes and to ensure you’re getting financial advice on your own tax position and the impact the changes will have, so you should monitor industry news to keep up with new developments or hot topics to ensure you have all the latest updates.

Work out rental yields

The rental yield is the annual rental income as a percentage of the property value, therefore understanding the potential profitability will help you identify the types of properties and locations that will best suit your budget. Before you start looking for new properties, sit down with a pen and paper and think about your budget and the rent you are likely to get. Also, don’t forget factors such as maintenance costs.

Location is key

Major infrastructure projects, as well as local developments, can greatly affect the money landlords can make on their investment. The current desirable areas for renters are usually well-known, but an up-and-coming area could be a great opportunity, so you might want do a bit of background research. Think about whether a town in a commuter belt, or is near well-regarded schools or near good hospitals.

As a landlord, you will need to live nearby to deal with maintenance problems, or pay a letting agent a management fee to field calls from tenants. You will also have to carefully choose an area popular with renters to ensure the property doesn’t stand empty.

Choose the right property

You will need to research the local market and get to know which areas are popular for different types of renters, such as families or students. For example, in town centres it may be easier to rent out a one-bedroom flat, whereas a three-bedroom terrace is likely to work better in a family neighbourhood. Also, think about the tenants you are looking to target. If they are professionals, for example, they may be looking for a modern, stylish home, while families might want a bit more space.

Securing finance

Unless you are a cash buyer, you will need a buy-to-let mortgage. There are a number of specialist lenders, like Together, that will consider buy-to-let mortgages on properties such as those in need of renovation that the mainstream banks may not. We will also deal with a broader range of applications; from those with complex income streams and retired people, to those with a less-than-perfect credit rating, to give just a few examples.

Share
Build: 1.3.7.29140