85% Buy to Let Mortgages are back!
A new BTL mortgage has been released which is apparently taking the market by storm. This product is ideal for investors buying property below market value as the lender will consider loans of 70% of the open market value to 85% of the purchase price!
For Example:
In their response to the Rugg Review of the Private Rented Sector the CLG clearly believe that landlordism is word that anyone involved in private lettings should be aware of!
Aside from made up words (?) there is quite a lot of good stuff in the response and I will try to summarise the main points as follows:
Housing Benefit has often been criticised as an overly complex benefit that does not promote self responsibility and can even act as a deterrent to working. So with a view to improving the current system the government is introducing some major changes.
A letting salesperson is more than just a "sales person." A good lettings agent will act on your behalf and offer suggestions and guidance making sure that you get the best rent for your property.
Although the majority of landlords will not accept tenants on Housing Benefit there are many landlords who will. This situation has the potential to change when the new rules affecting housing benefit take effect from April 2008.
Despite a few recent hiccups the UK economy is strong and in particular the UK property market generating excellent returns for investors. The UK property market is not only attractive to overseas institutional investors like banks, but also to individuals.
Some confusion exists as to what a buy to let commercial mortgage actually is. Some brokers and lenders used to regard residential buy to let mortgages as commercial propositions, leading to a mindset that all buy to let mortgages were commercial in their nature.
According to recent reports there are a number of landlords ignoring the [tag]Tenancy Deposit Scheme[/tag] (TDS). In figures released by the National Landlords Association (NLA) it is estimated that approximately 150,000 landlords have directly registered with an approved Tenancy Deposit Scheme. This means that there is a significant number who have not.
The relationship between landlord and tenant is rarely put under more pressure than when the issue of deposits is discussed. Unscrupulous landlords have left many tenants feeling deeply suspicious of the whole question of repairs and deductions.
The succession of recent interest rate rises is starting to have an impact on the [tag]buy to let[/tag] market. The inevitable consequence of this is that some lenders are tightening their criteria for new borrowers. This means that unless a new entrant to the buy to let market can come up with a large deposit they are going to find problems balancing their rental incomes against higher loan to value mortgages.
