Recent Buy To Let News
The property market generally has in recent years had some recent Buy To Let or BTL gloom news in the UK, USA and elsewhere, including about some buy-to-let landlords struggling to pay their loans or even having their properties repossessed.
This gloom news had mostly related to more foolish speculative Buy To Let landlords who were mostly new entrants of recent years and paying high mortgage rates, and could not raise their rents enough. This generally means that the BTL that
they took on was not a profitable investment to make at the time, and they had not appraised it properly before taking it on - something that this website has always warned strongly about and always will warn strongly about.
UK home ownership has now sunk to its lowest level since 1987, see
http://uk.finance.yahoo.com/news/home-ownership-falls-lowest-level-181618767.html, and reflecting this private renting and rent levels are now strong. And lenders are now providing cheaper loans, so that Buy To Let is now a better investment option.
Currently low interest rates, are good for first time buying in 2016 with a mortgage. But
house prices may fall back and mortgage loan interest rates should at some point rise.
Right now is a good time for buying property to let with cash or on a good longer-term fixed rate loan, especially as rent levels should also hold up well.
And if you are after a new mortgage then now is a good time to go for a longer-term fixed rate mortgage rather than a variable rate or tracker mortgage whose cost might well soon rise sharply.
But BTL as always requires buying property wisely and borrowing wisely, neither of which may be easy.
As BTL is a medium term to long term business, short term advantages to a loan may be of little help and it is the longer term loan cost that will usually matter most.
But lenders often use short term loan advantages to attract, and play down the longer term loan cost, as with many 'fixed rate' loans.
Those with existing property portfolios may well have been accustomed to raising increased loans based on increasing property values.
Doubts of property values continuing to increase may make that a problem now, and may require loans to be on rent incomes instead. Lenders also have tended to draw up the financial drawbridge to restrict loans perhaps unfairly and are more readily demanding their money back also perhaps unfairly. So loans for Buy To Let landlords have become more problematic.
Also, in difficult times the best of tenants may lose their jobs and have to apply for housing benefit welfare to pay their rent and this may involve some rent delay. But once this is in place it should make rent more secure.
(English local authorities will consider paying a landlord directly where there is evidence that the tenant is unlikely to pay their rent and 'making direct payments would be in the interests of the tenant.'
Where arrears of benefit have reached 8 weeks, the local authority is more likely to agree to make payments direct to the landlord 'unless it is not in the tenant's overriding interests to do so.' However, landlords should not wait for the 8 week period to be reached before contacting the local authority.)
If you are thinking of renting out for the first time a house that has an existing mortgage and/or insurance, then you should tell the mortgage company and/or insurance company. If you do not then you risk the mortgage and/or the insurance. Some mortgage lenders and insurers will allow you to remain on the same rates, but others may want to switch you onto their buy-to-let rates (which may be somewhat higher).
UK banks are now giving very little interest on bank savings, so if you have bank savings earning little then it may well be better if you can make extra tax-deductable BTL mortgage payments from such savings.
If you appraise any BTL investment proposal carefully before you commit to it, then any that you take on should be profitable.
If you do not appraise a Buy To Let investment proposal carefully before you commit to it, then you are always taking a gamble. And gamblers often lose.
2016 Property Law
For 2016 law affecting the buying, selling, letting and construction of property in England and Wales, see our Letting Laws
Doing a BTL property investment properly
You have come to the best website if you want to know exactly how does Buy To Let work, or want advice on UK BTL laws or letting property advice. Visit our different sections from the menu at the top of each page.
Buy a UK house for £600,000 and let it at £600 per month will almost guarantee a LOSS, but buy a house for £60,000 and let it at £600 per month almost guarantees a PROFIT - however property values move. Being a landlord may be a very sound investment - especially if property values rise strongly - yet UK property investment can be risky and lenders will give you a loan for a bad scheme.
There are two main choices for starting as a landlord - buy a house to let when the maximum mortgage will be at most 85% of valuation but interest is tax-deductable, or let your own house and buy yourself a new house when you may get a 100% mortgage but interest is not tax-deductable. The house and its location, and your property management, will need to match the lifestyle of your target tenants.
And certainly, before you buy any housing to let or decide to rent your own house and buy a replacement for yourself in England, you should get an expert estimate of your likely profit or likely loss, and also get an estimate of how big a rent and mortgage loan you should be able to get !
Just now is maybe a rather difficult time for doing new Buy To Let property investment, with most mortgage lenders wanting bigger deposits and mortgage rates somewhat high and most property prices somewhat high also. Unless you can find a real bargain property, you could face a first few years of loss-making though you certainly should still do well in the longer term. BUT interest rates in the UK peaked in late 2007 and property prices bottomed in 2009 - early 2016 also sees very low interest rates with increasing property prices. So 2016 should be a year to go for Fixed Rate mortgages rather than Variable or Tracker mortgages, and early-2016 should hold to cheap mortgages. So if you can manage it, do not delay starting a new BTL purchase now, just look more for a bargain. Recently mortgage rates have fallen again with lenders regaining confidence.
BEFORE you consider making an offer or bid for a property, you may want to apply for a mortgage - lenders will often not need to know what property you want to buy but may want to know what rent you hope to get (which our report can advise). For your Buy to Let house purchase a 10% cheque will normally do for a deposit, but you will get at most an 85% mortgage so you will need another 5% at completion unless the seller is offering a cashback deal. If you want speed, you can get a surveyor to go with you when you view a property but if you need a mortgage then the lender may want their own survey done after also.
If you are considering a BTL and have Microsoft Office Excel on your computer at home or at work, then we can supply a very helpful Buy To Let profit calculator to cost your ideas that also includes a separate mortgage calculator for only £9.99 - click BTL Profit Calculator
Or at the same £9.99 we will run our expert Buy To Let property investment report and email it to you - using the best UK property investment calculator. Even if your BTL idea is at an early stage, with no actual property in mind yet, you can get a good report on your approximate estimated ballpark figures. You get the BEST overall Buy to Let advice on your proposed BTL investment including rent advice and tax advice at Buy To Let Report
If you are now letting property, or thinking of renting out property that you now own, then we can also give you an expert report on how good a financial property investment that is. You are investing the value of your property. Your current property value estimates, and current mortgage loan amounts will allow this expert appraisal, and you will also get the BEST overall Rent Your House advice including rent level advice and taxation advice at Let Your House Report
If you are wise then do NOT buy a property to rent out, until you get an expert estimate of your likely profit, or likely loss ! Even major UK lenders have said that they think ALL investors thinking of buying property to rent, should get an expert financial appraisal like this before seeking a BTL investment mortgage - as does the Council of Mortgage Lenders guide "Buying to Let".
(Many lenders will NOT calculate your Buy to Let mortgage on your income, property price or value, but on your rent as does our BTL calculator (unlike many others). Some lenders will use your income or part rent and part income, but lenders can give you a Buy to Let mortgage on a project likely to make a loss and which you cannot afford, and letting agencies can land you with a rent level that is too high or too low, so you do NEED our low cost expert investment advice FIRST ! )
Remember, many selling UK BTL mortgages will give you dangerously poor advice !
If your finances include some debt that you are thinking of refinancing or consolidating more cheaply, you could try visiting ; Secured Debt Consolidation
Now with two for the price of one, for £9.99 get up to two Buy to Let
, or Rent Your House
, proposals assessed. Our reports will combine our use of a BTL mortgage calculator and a net present value property investment calculator plus our years of experience in housing finance.
Simply send us your simple details :-
otherwise contact us, e-mail BTL@buy-to-let.me.uk and I will get back to you asap.
PS. you can have our Buy-To-Let expert report generator in Excel for your own private or business use for only £39.99 !
See a sample appraisal report
OR If you are considering a Buy To Let and have Excel on your computer at home or at work, then we can supply a very helpful Excel BTL calculator to cost your ideas that also includes a separate mortgage calculator - click HERE
Some other websites you may like to look at :-
. Council of Mortgage Lenders.
You are welcome to link to this site's homepage, eg http://www.buy-to-let.me.uk/
You can do a good search of this website, or of the web, below ;
Contact :- e-mail BTL@buy-to-let.me.uk
or write :- Vincent Wilmot, 166 Freeman Street, Grimsby, DN327AT Lincs, UK
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