If you have
been thinking of investing in property then retire
peacefully, you're not alone. Buy to Let is getting
increasingly popular, especially when you get a fixed
rate or capped a rate mortgage these days. Low interest
rates and stable rental income looks attractive and
safer - compared with other investments.
Here
are few facts:
-
Since 1956 the compounded
average annual increase in house prices is 9.5%
(source: DataStream).
-
If you bought a house
50 years ago in London for £1,000, today
it would be worth more than £1million.
-
Did you know that the
buy-to-let market currently represents only 11%
of the housing market. ARLA predicts this figure
to rise to 20% by the year 2020.
-
Property doubles in value
(on average) every 6.2 years.
We have teamed up
with 'The Money Centre' - one of the UK's largest
independent finance brokers. They can secure
a complete range of mortgages from specialist funding
institutions on competitive terms.
Guide
to Buy to Let
Employing an independent
broker to arrange your commercial funding will save
you both time and money as they will work on your
behalf to secure optimal terms. They are not tied
to any one lending institution. As one of the UK's
largest finance brokers, The Money Centre are able
to negotiate property finance uk from specialist institutions
on far more competitive terms than are available to
the public direct. They are dedicated to: -
-
Understanding your requirements
-
Identifying the most effective
ways to achieve the required level of finance
-
Negotiating with lenders
on your behalf to obtain the most competitive
and flexible terms
-
Liaising with accountants,
solicitors and valuers to ensure transactions
progress to a satisfactory conclusion
-
We will manage the entire
process, from point of first enquiry through to
issue of offer letter, and provide you with a
professional service at all times.
The commercial funding uk property
finance market can seem complex, but our knowledge
and experience, coupled with our strong relationships
with a wide range of commercial lenders, means that
they can find tailored solutions to meet your needs.
FEES - standard brokerage fee
is 1% of the loan required. The lender will usually
charge an arrangement and valuation fee and these
will be outlined in the lender's 'in principle' offer.
You will also be responsible for legal fees. Instructing
THE MONEY CENTRE to arrange your funding leaves you
with nothing to lose and everything to gain. Unlike
most of our competitors; they do not charge fees until
we 'put a deal on the table' which is acceptable to
you. Additionally, The Money Centre have no objection
to competing for your business. Many of our competitors
will insist you provide them with exclusive rights.
Categories of loans:-
Business
Mortgages - Funding for the leisure and care sectors
and other specialist business properties.
Business
Paramedics - Is your business under capitalised-
Are you finding it difficult to arrange funding- Are
problems in the past affecting your future--
Commercial
Mortgage - Funding for offices, shops and industrial
units which are to be occupied by the business taking
the mortgage
Market
Research
You must look
around at the average value of the properties and
rental rates in your area. Talk to some estate agents,
who are always helpful in searching the right property
and finding the tenants.
Business
Plan (Do your sums)
First of all
you must decide how much you can invest from your
savings? Say if you have £50K to spare, keep
£10 for unforeseen expenses, and with a £40K
deposit you can normally get £160K ( 80% of
the value) as mortgage. This gives you £200
to buy your first property to let.
How
much can you borrow?
The amount
can ranges from £100,000 to £1m per property,
and lenders will typically advance a maximum of 85%
of the property price. Some lenders say the rental
income must be at least 125% of the mortgage payment.
Others will lend a multiple of your salary, say three
times, plus half the rental income.
Interest
Rates?
Most borrowers
for Buy-to-Let prefer Fixed or Capped rate mortgage
so that can plan their income and outgoings better.
Buy-to-Let are treated as commercial lending and are
subject to higher rates . Since more lenders have
entered the market, which are prepared to lend for
Buy-to-Let properties. So the interest rates still
very completive, may slightly higher than ordinary
home loans. With the present low interest rates more
and more people are attracted to enter the Buy-to-Let
market.
Now check the
rent what you can get for such a property. It must
be 125% of the monthly mortgage that you have to pay
on your borrowings.
More
than one property?
Some lenders will only lend on one property; others
limit you to 2, 5 or 10, and some may have a limit
on the overall amount you can borrow.
Tax
Relief ?
Yes, you can offset interest payments on your mortgage
against tax on rental income, along with other expenses
such as agents' fees and maintenance costs.
Still interested?
If so read our 3 step plan on getting your best buy
to let deal.
Location
Before you
can find the answer for this question, you must think,
of what kind tenants you would like to have in your
property? People looking to rent various so much:
Students,
who may give you more rent per room than a family
home will. But you must have the time and will to
deal with so many tenants even in one property, or
if you have more than one property you would certainly
need to employ some one to deal with day to day requirement
of so many tenants. I have seen a trained lawyer ended
up just a manager of twenty or so houses he owned
and had to deal with over a hundred tenants. This
became his full time business.
If you are looking for an income for your retirement,
then you need totally different kind of tenants, such
as a large company, an embassy of an expat family,
who will give you sure tenancy for at least for 12
months. In the case of company or an embassy tenants,
this agreement can be long term with annual rent rise.
A friendly
chat a local estate agent will give you an idea of
market demand in the area you intend to buy the property.
You can also consult the Association of Residential
Letting Agents (ARLA) who will provide help and advice
on regulations and rent levels. Contact ARLA on 01923
896 555 or click on this
link.
Financial
advice
To get the
best advice just simply fill in our application form
and wait for one of our many advisors to contact you
usually within the next few hours.
