Buy-to-let
Get expert advice and support with your
Buy-to-let investment journey.
Buy-to-let
Get expert advice and support with your
Buy-to-let investment journey.
Find the best rate in today’s mortgage market for your needs!
Click on the button to change to BTL
Investing in property is a thrilling journey, though even seasoned buyers can encounter challenges if not cautious.
Many are drawn by the potential for rental income, which offers a steady stream of funds for the self-employed or those retired. Additionally, property values often appreciate, promising capital growth, and it’s a straightforward asset to understand due to its tangible nature.
Buy-to-let mortgages are predominantly interest-only, meaning you pay just the interest each month, not the principal. This keeps short-term costs down but having a strategy to settle the loan or refinance later an important consideration. Some landlords opt for limited company structures to navigate tax changes, though these can involve higher interest rates. It’s wise to seek our specialist advisers who can help you weigh the benefits and drawbacks.
How it works
How it works
Investing in buy-to-let properties can be a lucrative way to generate income and build assets for future generations. Whether you’re an experienced landlord or a newcomer, we offer comprehensive support, from securing the best mortgage deal to understanding your legal obligations. Keep in mind, property values can fluctuate, and there may be periods without tenants.
Let-to-buy mortgages are another route, allowing you to rent out your current home and purchase a new one. This type of mortgage reverts your residential loan to buy-to-let, calculated based on rental income, freeing your personal income for a new mortgage. With adequate equity, you might release funds for a deposit, although let-to-buy mortgages typically cover up to 75% of the property’s value.
For those interested in Houses of Multiple Occupancy (HMO), our experts can assist as standard buy-to-let lenders often don’t cover this area. Seeking advice can help secure competitive rates, avoiding the high costs of commercial finance.
Holiday lets, spurred by platforms like Airbnb, offer landlords the chance to diversify, often yielding higher returns than traditional buy-to-lets. The key difference in mortgages is the tenancy duration; holiday lets have frequent turnovers, demanding different mortgage structures.
Investing in property in the UK requires careful planning. For your first buy-to-let property, you generally need a deposit of 20% to 25% of the purchase price, though some lenders might accept 15%. Additionally, there is a 5% stamp duty surcharge, and it’s wise to have cash reserves to cover maintenance and mortgage payments during vacancies, ideally six months’ worth of rent.Before buying, consider what type of property fits the location. For instance, houses with several rooms are often popular in student areas, while one-bedroom flats might be preferred by young professionals. Understand all costs involved, such as higher stamp duty for non-residential purchases, development expenses for furnishing or renovating, and necessary certificates like gas safety checks. Landlord insurance is essential, as regular home insurance won’t cover rental properties. If you have a mortgage, your lender will require this insurance.
Managing a buy-to-let can be time-intensive, so hiring estate agents for tasks like marketing and maintenance might be beneficial, with costs being tax-deductible.
When to apply
Knowing when to make your mortgage applications is crucial.
Before you dive into the exciting process of viewing properties, it’s always a good idea to have your mortgage agreement in place. This is also known as an Agreement in Principle (AIP).
Ready to speak to a Mortgage Advisor?
Our team provides expert, unbiased mortgage advice. Get in touch today to start your journey toward becoming a buy-to-let landlord.
Some forms of buy-to-let mortgage are not regulated by the Financial Conduct Authority.
Frequently asked questions
Frequently asked questions
To qualify for a buy-to-let mortgage, certain criteria must be met. Lenders evaluate your eligibility based on potential rental income, financial stability, and landlord experience. Although owning your own home is often required, some lenders may not insist on this. A separate annual income of around £25,000, unrelated to letting, is commonly needed, but some lenders have no minimum income threshold. Typically, a deposit of about 25% of the property’s value is required.
Yes, rental income in the UK is taxable. You need to report it as part of your total income and pay Income Tax on your net rental income, which is your total income minus allowable expenses. The tax depends on your overall income and tax rate. Deductions for expenses like mortgage interest and maintenance can reduce taxable income. Consulting an accountant is recommended before buying your first buy-to-let property.
Most lenders restrict letting to family members under standard mortgage terms. You may need a specialist mortgage for this, so consulting a mortgage adviser is crucial. They can explain your options and any unique terms. Legal and tax implications also apply, making it important to consult an accountant for compliance and informed decision-making.
Yes, but it depends on your personal circumstances and existing mortgage obligations. It’s advisable to consult a mortgage adviser who can evaluate your situation and provide guidance on your options.
Expanding your property portfolio requires careful planning. Assess your finances to ensure you have funds for deposits and ongoing expenses, and research investment locations. A mortgage adviser can help secure financing, as lender criteria may vary. Professional advice on property management and tax implications is also essential.
Landlords must comply with several regulations to ensure safe tenancies. These include regular inspections of gas and electrical installations, providing an EPC, securing tenant deposits in approved schemes, verifying tenant immigration status, installing required detectors, and maintaining the property.
Yes, but you may have limited mortgage options. Lenders often require you to own a residential property first. If you don’t own any property, your options may be fewer. A mortgage adviser can guide you to the best lenders for your situation.
A property is an HMO if at least three tenants form more than one household and share facilities like kitchens or bathrooms. An HMO licence may be required, depending on the property and location. Mortgage options for HMOs are limited, but an adviser can assist.
Purchasing through a limited company allows you to offset various property expenses, making it tax-efficient. You pay tax on profit after deducting expenses, including full mortgage interest. However, consider other taxes like dividends or salary.
Age restrictions depend on the lender. Some have no age limit, while others may set a maximum age of around 85 years.
There is technically no limit, but lenders impose restrictions on borrowing amounts, the number of mortgaged properties, and total loan-to-value ratios. Our expert brokers can help find the right lender based on these factors.
Yes, you can set up a Limited Company and purchase property through it immediately. Lenders typically require a personal guarantee, underwriting the directors or shareholders rather than the company itself. This process is similar to individual applications.
The buy-to-let mortgage market can be complex and confusing – that’s why we’re here!
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Contact us for your fee free mortgage consultation
We offer you initial no obligation consultations. Frog Financial Management will bear the cost of this, where we will: Describe our services more fully and explain the payment options. Gather and analyse personal financial information about you and your aims and objectives. Recommend and discuss any action we think you should take.
Refund of fees
All fees are fully refundable should we be unable to achieve a Lenders Mortgage Offer (as applied for), except in the following circumstances:
Client not proceeding due to own choice. | Client not proceeding due to valuation issues. | Client not proceeding due to property chain issues. | Client non-disclosure of material facts.
Example of fees
for residential mortgages
We typically charge £527,
payable on application.
Standard residential mortgage – £527
Shared ownership and Right to Buy – £674
Product switch – £137
Complex/impaired credit history – £797
Example of fees
for buy-to-let mortgages
We typically charge £557,
payable on application.
Standard Buy-To-Let mortgage – £557
Limited company Buy-To-Let mortgage – £677
HMO Properties/Portfolio landlords*- £779
Product switch – £137
Complex/impaired credit history and non-standard properties – £979
*A ‘Portfolio Landlord’ is defined as client(s) having four or more buy-to-let properties (mortgaged or mortgage free), on completion of this mortgage transaction.
Example of fees for
Bridging, Development
and Commercial mortgages
We typically charge £787,
payable on application.
Business Finance – £987
Development Loan – £987
Commercial Mortgage – £787
Bridging Loan – £787
Example of fees
Lifetime mortgages
We typically charge £1,147,
payable on completion.
