Buy To Let mortgages and HMO properties

Buy To Let mortgages and HMO properties for sale. Our web visitors are typically almost all Buy To Let investors looking to buy suitable property or wanting HMO mortgage loans. 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 more than one property. They are likely to be concerned more about finance detail and suitable loans.

The amount of buy-to-let landlords in the UK has reached an all time high of 2.7M. This is a rise of 49% over the last 5 years from 1.8M. Despite the tax changes over the past few years investors and landlords have found ways to adapt. The benefits of the Stamp Duty holiday has also seen an increase in demand from first time buy-to-let investors. Low mortgage interest rates have also encouraged the increased interest. Property has not only remained more stable than stocks and shares but is also seeing some spectacular gains.

Evidenced by Nationwide launching the UK’s first ever sub 1% buy-to-let mortgage product. Both retail borrowers and landlords will now benefit from the lowest rates ever. The product is a 2 year fixed rate but is a 65% loan to value (LTV) at 0.99%. Deposit required is therefore 35% and the product does attract a 2% fee over and above the loan amount.  Nationwide has also made rate cuts up to 0.45% across it’s 5 year fixed buy to let mortgages. The buy-to-let market remains fluid and a rate war may well be underway. Landlords and investors though will be well advised to investigate the true cost before committing.

Landlords though will still be liable for a 3% stamp duty levy for their BTL property, re: Buy to Let Stamp Duty Calculator. There are though still hurdles to consider prior to investing. While the rates for the buy-to-let mortgages are positive in the main the ongoing supply and demand crisis may well scupper the incentive in part.  If there is limited stock to invest in the scenario only becomes frustrating to lender and investor alike. The rate of construction remains low and behind targets. According to the ONS there was a 10% lag in homes completed in Q2 2021. This was compounded by a further 5% dip of home builds commenced by developers. This suggests there are no signs of easing.

However build to rent numbers appear to have bucked the trend in areas away from London. The build-to-rent sector has seen exponential growth in recent years. This sector caters specifically to the needs of private tenants. Ironically while rental yields in London have fallen away over slightly in recent months the momentum was initially fuelled by developments in London. The capital is now taking a back seat to other parts of the country. According to latest figures there were 63,950 homes completed in the sector.   There are furthermore a 42,000 build-to-rent properties under construction. Some 99,500 built-to-rent homes are  in the pipeline.

In areas such as Liverpool, Brighton and Manchester build-to-rent construction are standout areas. In Q3 2021 12,000 homebuilds commenced. Within the capital 19 schemes began and 43 schemes commenced elsewhere. Nationwide has undercut Platform (Co-operative Bank intermediary arm) which launched it’s own 1% buy-to-let mortgage deal this week. The criteria for buy to let mortgage deals remain much the same but with the more favourable rates requiring up to a 35% deposit.

Rental income still remains typical across the board at around 125% of your mortgage payment (rental yield). For higher tax payers though this may well need to be 145% rental income or yield. Some lenders will still insist on a minimum income of £25,000. A 20% deposit is still preferred and a larger deposit will secure a more preferred rate. Some lenders will insist on a minimum age of 25 and to hold a residential mortgage. While there are now some lenders who will consider first time investor  HMO mortgages can sometimes be difficult to tap.