Since the 1st January 2017, mortgage lenders have increased the amount of rent required for a Buy To Let (BTL) Mortgage. Previously, most banks would have lent £139,676 based on £800 pcm rent. The figure now for most banks is £120,376. A fall of around 14% could affect lot’s of property owners for this year, trying to add value to their portfolio.
There are some important changes to the Buy To Let lending criteria, since January 2017.Investing In Buy To Let Property
Things to think about before investing in buy to let property
Investing in buy to let property can be a way to diversify your portfolio of investments, provide regular income and potentially be a source of capital growth.
House prices increased by an average of 5.8% in the year to September 2016, meaning that residential property continued to outperform many other types of investment.
However, investing in buy to let property isn’t suited to everyone. There are risks, costs and responsibilities associated with owning a property that is rented out.
If you are considering investing in buy to let property, it is essential that you understand and are comfortable with the following points:
- access to money – property is not a liquid asset as it takes time to access your money when it is sold
- house prices – slower growth could mean that you don’t receive the capital growth you anticipated when you sell the property
- profit is not guaranteed – making a profit is not guaranteed, even if your property increases in value. Property is relatively expensive to buy and sell when you consider stamp duty land tax (SDLT) and professional fees.
Money Management – May 2016
In this month’s money management, we look at:
- Landlords and how buy-to-let investors rushed to complete before the April 2016 stamp duty changes took effect.
Buy to Let
- How the national living wage has now become a legal requirement for employers.
- A number of changes to capital gains tax and entrepreneurs’ relief have been introduced for 2016/17.
- We also look at the attitudes of senior managers can often be an obstacle to the introduction of flexible working.
- Stamp duty changes lead to buy-to-let surge.
- Changes to stamp duty introduced in April 2016 have been linked to changes in the buy-to-let market.
Money Management Tips- March 2016
In this month’s Money management Tips
Money management tips, explains, understanding the consequences of poor money management is essential for financial security.
There are changes to mortgage tax relief that buy-to-let mortgage applicants may not be aware of.
The Bank of England expects average wages to rise by 3% in 2016.
There is a lack of confidence in whether home insurance policies will pay out.
A new kind of Innovative Finance ISA will be available from April 2016.
