Buy to Let

Buying a property can be the biggest decision made in our lives. It is for this very reason that impartial advice is critical from competent and qualified advisers.

Does investing in property appeal to you? Becoming a private landlord should not be seen as an easy way of making money. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will rise. That said, having a second property to let to tenants could reap considerable financial rewards over time.

There are 3 main differences in buy to let mortgages:

  • Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.
 

  • Interest Rate - buy to let mortgages have slightly higher interest rates.
 

  • Larger Deposit - typically a minimum of 20% or 25% of the property's value is required as a deposit.

 

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property's interest only mortgage repayments in order to cover your costs should anything go wrong.

These additional costs include:

  • Property upkeep - maintenance costs for the property.

  • Letting agent's fees - letting agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service.
 

  • Ground rent / service charges - applicable to leasehold properties.

  • Legal insurance - to cover costs from evicting tenants in the event of non-payment, very important, as this can be very expensive.
 

  • Insurance - building insurance and contents insurance for the items provided as part of the rental agreement.
 

  • Furnishings - the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your home insurance.

  • Gas / electrical appliances - cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.
 

  • Decorating costs - the property may require work ranging from painting, to a new bathroom suite before it is suitable for letting to tenants.

 

When choosing a property to let, it is wise to take advice from local letting agents to determine; what types of properties are in need and which parts of the town are best or most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live. 


YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Buy to let: please note the Financial Conduct Authority does not regulate some aspects of Buy to Let mortgages.

We offer the option where we can be remuneration by commission from the lender, a combination of a fee and commission or you may have the option to pay us a fee and receive any commission which we are paid by the lender. If you choose this option, we estimate that the fee will be.

For residential mortgage products £225.00 payable on completion

For Commercial mortgages 0.5% of the mortgage advance (for example on a mortgage advance of £150,000 our fee will be £750.00 payable on completion)

Buy to Let Mortgages a fee of £225.00 will be payable on completion of the mortgage.

Copyright © 2019 Haley Financial Services Ltd. All Rights Reserved

Please note there will be a minimum fee of £225.00 for the Residential Mortgage Advice given which will be payable upon completion of the mortgage. This fee may however change dependent on the size of the loan.

For Commercial mortgages 0.5% of the mortgage advance (for example on a mortgage advance of £150,000 our fee will be £750.00 payable on completion).

Buy to Let Mortgages a minimum fee of £225.00 will be payable on completion of the mortgage, although this fee may change dependent on the size of the loan. 

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

The Financial Conduct Authority does not regulate some aspects of buy to let mortgages & commercial mortgages.

Registered Name: Haley Financial Services Limited 2, Turnberry Drive,Whitestone,Nuneaton,Warwickshire,CV11 6TT Registered in England and Wales No 05188529 is authorised and regulated by the Financial Conduct Authority. FCA Registration No 313461. Click here to visit the FCA website

Registered Address: As above. 

You must be 18 years and over to take out a mortgage. The guidance and /or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.