BTL (Standard)

This option is the most straight forward and is one of the most popular property investments around. Usually, you will be looking to purchase a property and rent it out as a single dwelling. The benchmark deposit for most lenders is 25% but this can vary massively between providers.

Your income for a BTL mortgage isn’t always the deciding factor in how much you will be able to borrow. Part of the remit for a BTL is that the property usually needs to be ‘self-funding’ (making sure it covers its own costs). 

Let to Buy

A Let to Buy is a type of BTL Mortgage where you keep your existing residential property to rent out and purchase a new home. This way you can keep your current home as an asset for future investment.

You would need to check what your Stamp Duty Land Tax implications would be for doing this, as it could affect the amount you have to pay on your new property. There is usually tight criteria around these types of mortgages and not every lender offers them, but we are more than happy to discuss your options with you in full. 

Holiday Let

A specialist section of the market place which has really gained ground over the last few years. These work by allowing you to rent out the property under a short-term rental contract. There are a lot of companies around that can help you with actually renting the property out.

Not all lenders offer these types of mortgages, and the criteria is usually quite strict. 

HMO (House of Multiple Occupancy)

An HMO is a type of investment property that allows you to rent the property to more than one person at a time. For example, a five-bedroom terraced house could be rented out under 5 separate rental contracts at a time. Local Authorities would normally have certain criteria that need to be met for the property to meet local standards. The rental assessment would be based on the rental income of each individual room. This can yield a much higher return on your investment but are typically a greater risk as the demographic of tenants usually means a high turnover. 

Other Options

There are many other ways to purchase a Buy to Let/ Investment properties and we will be happy to cover these with you when you book your appointment. To give you an idea of other products, they include (amongst others);

Ltd Company BTL 

Commercial / Semi Commercial Mortgages

Bridging Finance

Development Finance

MUFB (Multi-Unit Freehold)

Please note that we are not able to provide Commercial/Semi-Commercial, Bridging or Development Finance, and this would involve referral to a third party. 

TAX

A significant factor that everyone needs to consider before committing to any investment (property or otherwise) is the tax implications that may apply. These could be the Stamp Duty Land Tax on the purchase, Income Tax on the income received from the rental or Capital Gains Tax payable on sale of the property. 

Either way you will need to seek formal tax advice before proceeding with an application to ensure you have the purchase set up in the most efficient way you can. 

We are not accountants, but we can help point you in the right direction to property tax experts who can help and advise on the best course of action to proceed.