The British Government has brought in some sweeping changes to how Buy-to-Let mortgages are assessed in the last few years, so the advice in this area has never been as important as it is now. An Independent Mortgage Adviser will be able to give you the mortgage advice you need.
Under strict instructions from the Bank of England, Buy-To-Let (BTL) mortgage lenders have had to increase their rental stress tests over the last two years, which has resulted in lower loan amounts being offered for the same rental income – this is an issue that largely impacts London, because of the high property values in the Capital, it is important that all Landlords understand the implications of this change. Portfolio Landlords (with four or more BTL properties) are now assessed differently to Landlords with only one or two properties.
Some good news is that some mortgage lenders have introduced creative underwriting tools like “Top Slicing” to assess BTL applications, which means they can consider your personal income as well as the rental income of a property in order to determine your total borrowing amount for BTL purposes.
The Government has also brought in a 3% Stamp Duty Surcharge for all second properties, which is another cost that has to be factored into your calculations.
Specialist advice is needed in areas such as tax, as there have been changes for Landlords in that area too. We would recommend you speak to a Tax Adviser to understand your tax liabilities.
As a Landlord, you also have certain legal responsibilities to keep your property safe and habitable. Make sure you fully understand these responsibilities, before deciding if owning a Buy-to-Let property is right for you.
The Buy-to-Let property market has become more complex than ever, so it is vital that you obtain the best possible Mortgage, Tax and Legal advice. At Charles Cameron & Associates, we are experienced in the Buy-to-Let Mortgage Market and can put you in touch with Tax and Legal specialists which will enable you to have a full understanding of your options.