A buy to let property is an investment property that will be let typically on an Assured Shorthold Tenancy Agreement. Whether you are an experienced buy to let investor or this is your first buy to let purchase we can help you navigate the often complex criteria to obtain a buy to let mortgage.

Buy to let mortgages tend to be assessed on the rental income of the property and the lender will then apply a stress test to the anticipated rental to determine how much they can lend you. The stress tests can vary dependent upon the term of the initial rate, your earnings and whether you purchase in a personal name or Limited Company.

Anyone who owns 4 or more buy to lets is deemed a portfolio landlord and the lenders often have different lending criteria for portfolio to non portfolio landlords.

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

Personal Name

From 6^th April 2020 you are no longer able to offset the mortgage interest against the rental income and so you should speak to an accountant for tax advise to understand how much tax you are likely to pay by owning the buy to let in your personal name.

There is currently a wider choice of lenders offering buy to let products in personal names, but lenders may also want to see a minimum earned income in addition to the buy to let rental income as part of their criteria.

Remember there are associated costs with owning a buy to let property such as letting agents fees, managing agents costs, services charges for leasehold properties and maintenance costs for repairs. All of these costs can have a significant impact on the overall profit you hope to make.

Limited Company

By owning a buy to let in a Limited Company you are still able to offset the mortgage interest against the rental income, however, there are other associated costs with Limited Companies that also need to be factored in. You will need to file accounts each year with Companies House and so employing an Accountant will add to the other associated costs you will have with a buy to let owned in personal names.

The number of lenders offering Limited Company buy to lets is currently far less than in personal name. The Company needs to be an Investment Company and hold the relevant SIC Codes for the lenders to lend to the Company.

Limited Companies are often used for portfolio landlords, however, you can own just one buy to let in a Limited Company, you need to determine with your accountant if you feel this makes financial sense.

Portfolio Landlords

If you already have or are looking to build a portfolio of properties to let then having expert advise from both Tax Advisers and us as your Mortgage Adviser is very important. Lenders often have limits on either number of properties they will lend on, or a monetary amount they are willing to lend to and so the lending options are often restricted or more complex. Some lenders will pre approve a limit of lending for portfolio clients to help them grow their portfolio.

At Bentley Holmes we can help you if you are purchasing your first buy to let or you are a seasoned investor with an existing portfolio.

Let to buy

Often our clients have found a new home to buy but have not sold their current home. They either want to ensure they don’t lose their new purchase by breaking the chain or they want to retain their current home as a future investment. Often in order to purchase the new property there is a requirement to refinance their current home onto what is called a ‘Let to Buy’ mortgage. Whilst the property is going to be let out it is not quite the same as a traditional Buy to Let mortgage due to it being a current residential home and so the number of lenders who offer Let to Buy mortgages is limited. With our help we can guide you through the options on how a Let to Buy may affect your ongoing purchase and which lenders can assist in this limited market.