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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Will location affect my application?
I am keen to invest my savings into buy-to-let and have started looking into possible options. I live in London but because property prices here are ridiculous I would like to find a property elsewhere in the UK. My question is, will the location be taken into account when assessing my mortgage application and are there any areas to avoid? I know yields differ in certain areas but should I consider anything else? I have just over £88k in investments to put into my first buy-to-let and would been keen to buy a three-bed house.
Answer
If you are still planning to buy in England or Wales, your options shouldn’t be restricted. If you are considering Scotland you may notice that your borrowing options decrease slightly, but that’s not to say there aren’t options out there. Over the last few years an increasing number of buy-to-let lenders have extended their geographical reach to include Scotland.
When selecting a location for your buy-to-let property make sure you research the area thoroughly. Local amenities, transport links, schools etc will all have an effect on the value and demand of your rental property. I would definitely recommend taking a look at recent comparable sales and rental statistics.
If you are looking to purchase a property outside of your local area, you may also want to consider using the services of a letting agent.
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Question
Tenant with property
Are there any benefits to purchasing a buy-to-let with a long-term tenant already living there? I am concerned that there might be problems with legal rights further down the line. Would a mortgage lender look upon a tenant as an advantage or a disadvantage?
Answer
Having an existing tenant in place shouldn’t make any difference to your finance options, unless they are a sitting tenant (a sitting tenant is someone who has a protected tenancy under the Rent Act 1977). If you are buying a property with a sitting tenant, you are extremely unlikely to get a buy-to-let mortgage owing to the additional rights these tenants enjoy.
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Question
Deposit for second buy-to-let
I have a buy-to-let property and would like to buy another. Can I get a remortgage on my current house to use as a deposit on my next property?
Answer
I am unsure if you are looking to remortgage your current home or your buy to let property? But yes, either way this is possible depending on your individual circumstances. You will need to have enough equity in your home/rental property and meet the lender’s affordability calculations, but in principle, this is definitely something which can be done.
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Question
Interest rates and remortgaging
In light of the latest Bank of England interest rate rise, what are likely to be the best mortgage deals going forward? I will need to remortgage on my buy-to-let next year and I am not sure whether a short-term tracker or a longer-term fixed rate would be better?
Answer
Here at Mortgages for Business we are keen promoters of five-year fixed rates. No one knows what the future holds but with Brexit looming and talk to rate rises over the next few years, locking into a five-year fixed rate now will provide you with some certainty in the mid-term. Pricing has never been so competitive. Of course this decision is entirely up to you, but personally I would pick a five-year fixed deal over a short term tracker any day.
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