Buy To Let

Buy To Let mortgage deals and properties for HMO investors Being a landlord has long proved profitable. It has tended to be dominated by the wealthy or by large companies owning many properties, but there has always been also the smaller landlord renting out just one or two properties.

Over the long term, rents and house values have tended to increase in line with wages – but with house prices also showing some short-term sensitivity to interest rates because much house buying depends on mortgages and their interest rate costs. So rents and house values have long tended to rise, with some fallbacks, about as below ;
Buy To Let mortgage deals and properties for HMO investors house values graph

But wages and interest rates are not the only things that can affect house values and rent levels. There can be times when the number of new households wanting housing grows faster or slower than the number of new houses being built. And while population tends to grow, the land available for housing may not grow as much. So average house prices in the UK in recent years have increased much faster than wages, but nobody knows how much longer that may continue. House prices may also do much better for more popular locations and property types, and badly for those becoming less popular.

Buy To Let mortgage deals and properties for HMO investors (High Yield)

Renting out property has always been at least a reasonably good longer-term investment especially because increasing property value is generally not taxed. And if house prices are rising much faster than wages, then owning property can be extra profitable. Of course house prices do sometimes fall for a time, so as a short-term investment property can certainly involve some real risk. If interest rates rise sharply and property values fall at the same time then this can create problems for some property investors that may take some years to come out of. This is why a property investment needs to be for at least 10 to 15 years to give assured profit. In early 2017 interest rates in the UK are low, but they may well start rising before the end of the year. Property prices are high relative to incomes – but it may well be 2018 or later before property prices start falling again. So 2017 is a time to favour longer-term Fixed Rate mortgages over Variable or Tracker mortgages, and both are now often also available cheaply as Flexible or Offset mortgages.

Buy To Let mortgages and HMO properties for sale attracts visitors who are almost all Buy To Let investors looking to buy suitable property or wanting mortgage loans for that buying. Many are first-time investors, while others are looking to add new properties to their existing portfolios.

Buy To Let investors are often less concerned about location or property detail, and are more likely to buy to plan and to buy more than one property. They are likely to be concerned more about finance detail and suitable loans.

So we like you are interested in any special deals for the Buy To Let investor, such as cashback property sales or above-85% mortgages or good Buy To Let websites.

We target exclusively the Buy To Let and HMO investor. Our services also include Bridging loans, development finance, auction finance and commercial development loans. If you have a relevant website, homes for sale or mortgages then do let us have the details. Please refer to our database of Buy To Let mortgages and HMO properties for sale in conjunction with major portals.

If you have, or are developing, a website that can be especially useful to the Buy To Let investor then do let us know.

If you have, or are developing, properties in the UK suitable for Buy To Let, and especially if you can offer suitable deals, then you should contact us, and you could get something like a service specifically catering to Buy To Let mortgages and HMO properties for sale.

OR if you are a lender that can help our Buy To Let investors build a property portfolio – eg one of our typical recent enquiries,
“I am intending to build a property portfolio of about 20 houses over the next 18 months, expecting to finance 80% of purchase prices one by one, but ideally do not wish to apply for 20 separate mortgages, but rather set up a relationship with a single lender, experienced in these kind of investments, and establish a credit line on which I could draw based on valuations and surveys. I would like to have the possibility of periodic revaluations allowing further borrowing against increased valuations as an option for the future expansion of the portfolio.”

buying to let a property or letting to buy your first property often conjures up a logistical quandry. 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, 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.

buying to let a property or letting to buy your first property

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.

buying to let a property or letting to buy your first property 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.

Letting furnished or unfurnished buy to let-HMO property, if you are a Buy To Let landlord. What extent should you furnish and/or semi furnish a property that you want to rent out ? If you intend to use a letting agency then they may have a view on this, but most will leave the furnishing issue to you.
1. Some advise NO furnishing – rent your house out bare. Many prospective tenants may not like your furnishing tastes anyway, and some will already have their own furniture.

2. Others advise FULLY furnishing. This does save some prospective tenants the hassle and expense of doing their own furnishing, though some may have their own furniture already or their own ideas on home decor.

But the reality is that if you want to get the best tenants to pay the best rent, semi-furnished is the most successful. Semi-furnished is generally the best at getting tenants and the best at getting higher rents. And it will cost you less than fully-furnished, since you have less furnishings to provide and to maintain. Unfurnished is generally harder to let, and gets lower rents.

Your semi-furnished house should include carpet, curtains, lamp-shades, cooker, fridge-freezer and washing machine. If you have a garden, then a mower and a BBQ are an idea. And having a couple of framed paintings on key walls maybe also. These items should all be listed on a house inventory, and your letting contract should include something like ‘vacated property to be in good condition including inventory items or equivalent replacements’.

(IF you intend renting to students, then offering an optional desk and sofa may work well.)

Generally do leave all soft furnishing and rugs to tenants. And if you decide to allow tenants to redecorate, then require that it is done to a good standard. If you have the property well decorated, then most tenants will be happy with that and any who do want to redecorate will want to make it better !

PS. You may have some particular tenant market in mind, but renting market conditions can change and may sometimes mean increased or reduced local demand from the elderly or from young professionals or occasionally from students