Buy to let mortgages

A buy-to-let mortgage is intended for borrowers who acquire real estate as an investment for rental purposes. Then, you must decide between an interest-only or a repayment-only mortgage. Keep in mind that buy-to-let mortgages operate differently from ordinary mortgages since they typically need a significantly larger minimum deposit (typically, 25% of the value of the property).

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There is no guarantee that it will be possible to arrange continuous letting of the property,
nor that rental income will be sufficient to meet the cost of the mortgage.

Becoming a landlord

First and foremost, you should determine if you may lawfully rent out your home because there are various restrictions to take into account. You should also consider the area's rental demand as well as your own qualities as a landlord. Will you furnish the property, for instance? Will you permit room painting or pet ownership among your tenants?

The next step is to sign up for self-assessment with HMRC. Along with deciding how much rent to charge, you'll also need to select whether you want to handle your tenants directly as a private landlord or through a rental agent. Once you have made your decisions about the aforementioned, you should apply for your buy-to-let mortgage.

Legal responsibilities of landlords in the UK

The law upholds your obligation to protect your renters' health and safety. To name a few, but not all of them:

  • Ensuring that the house has smoke alarms and carbon monoxide detectors installed on each floor
  • Ensuring that it is safe to use all electrical devices and appliances
  • Obtaining an updated gas safety record from a licenced gas engineer¬†
  • Having an up-to-date EPC rating of the property

For new lease agreements, all private landlords in England are required to run a Right to Rent check. This will reveal if residents are legitimately permitted to reside in the UK. If you have a shorthold tenancy in situ, you must additionally safeguard your tenants' deposits through the deposit protection system. 

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is £599.