Buy-to-let made simple

The criteria to qualify for a buy-to-let mortgage is different than for a residential mortgage (the house you live in), but as with any mortgage type, vary from lender to lender.

Usually, the lenders will require the following:

• Minimum of 21 years (or in some cases 25) – maximum age limits are a bit more flexible for BTL.
• Some lenders will prefer you to be a homeowner, but there are flexible lenders that allow landlords to be first-time buyers.
• Most lenders are not focused on your personal income. For the ones that will ask to check it, the average minimum income requirement is around £25,000.
• You will need the potential rental income of the property to be between 125% and 145% of your monthly mortgage repayments when using an increased stress rate to allow for future increases in rates. The calculation will depend on your tax rate and whether you are purchasing in your personal name or a limited company.
• The loan to value (LTV) can go up to 80%, which means that the minimum deposit required can be as low as 20%. The higher the yield, the more chance you will be able to borrow a higher loan to value as there is more income to cover the repayments.

• Standard – Widely available, used for single-family rentals.
• Regulated – Usually used where the purchased property will only be rented to close family.
• Let-to-buy – This is a scenario whereby you take 2 mortgages at the same time if you want to buy a new private residential home but keep your existing property to let out for rental income. Your home is transferred to a BTL mortgage, and a new residential mortgage is taken out for your new home.
• HMO – HMO (house of multiple occupancy) mortgages are for properties that will be rented to 3 or more individuals from different families who will be sharing at least 1 facility (bathroom, kitchen etc.). This may or may not require a licence, depending on the local authority where the property is based.
• Large HMO – For properties that are to be rented to 5 or more people from different families that will be sharing at least 1 facility. A licence is always required for a large HMO in the United Kingdom.
• Portfolio mortgage – Available to landlords with 4 mortgaged buy-to-let properties or more and allows them to manage all properties through a single mortgage.
• Limited company buy-to-let – This is where a limited company is used as a Special Purpose Vehicle (SPV) to purchase a property or several properties – there are tax benefits associated with buying through a limited company. (Please consult your tax advisor).
• Expat buy-to-let – it is an opportunity for a UK national living abroad to invest in a buy-to-let property in the United Kingdom.
• Large loan buy-to-let (£1M+) – Mortgages for residential properties worth more than £1 million. High Net-Worth Individuals (HNWIs) can have more complex financial situations, and there are specialist mortgages available from private banks and specialist lenders that understand complex income and ownership structures.
• Multi-Unit Freehold Block (MUFB) – This is a mortgage specifically designed for properties that consist of multiple units or apartments within a single building. This type of mortgage is typically used by property investors or developers who own or wish to purchase an entire block of flats or apartments.

• Maximise rental income: Explore the promising potential of generating steady rental income by investing in buy-to-let properties. With thorough research and strategic property selection, you can tap into high-demand locations and secure attractive rental rates.
• Financial growth and stability: Buy-to-let mortgages offer a path to long-term financial growth and stability. By carefully assessing your affordability and understanding the financial commitments, you can leverage favourable interest rates to build a profitable portfolio of income-generating properties.
• Diversify your investment portfolio: Real estate stands the test of time as one of the most established and secure forms of investment, offering a proven track record of stability and resilience compared to newer investment models – all the buy-to-let options create the possibility of a very diverse real estate portfolio.
• Professional guidance and support: Gain valuable insights and advice from our mortgage experts. At the same time, you will never be alone and have the guidance of our experienced team. You will be in the driver’s seat, making all the decisions, but we will always be by your side.
• Secure a retirement income: Buy-to-let mortgages have the potential to create a reliable and sustainable retirement income stream. By strategically building a portfolio of income-generating properties, you can ensure a steady flow of rental income to support your financial needs during retirement, providing peace of mind and financial security.
• Leave a lasting legacy: Invest in buy-to-let properties to create real assets that can be passed down to future generations. Through effective succession planning, you can build a tangible inheritance for your loved ones, providing them with valuable real estate assets that can appreciate over time and serve as a foundation for their financial well-being.

Buy-to-let mortgages can be not only a pathway to financial success and personal growth but also a means to secure your retirement income and leave a lasting legacy for your family.

With careful planning and a forward-thinking approach, you can make this investment avenue a cornerstone of your financial strategy, setting the stage for a prosperous future for generations to come.

Give us a call, and we will book a quick meeting, and you will have precise answers about how close you are to purchasing your buy-to-let property investment.

020 8517 1141