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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
Do I need a specialist mortgage for a holiday let
I have been eyeing up the holiday let market and with staycations looking like a growing business here in the UK I am hoping to use the stamp duty holiday as my incentive.
Do you know if I need to get a specialist mortgage for this or if a bog-standard buy-to-let will suffice? I own my own residential property outright and will be putting in a big chunk of equity – probably 40% into the holiday cottage.
Answer
The combinations of a UK staycation and the stamp duty holiday certainly does offer a fantastic investment opportunity right now!
A holiday let mortgage is a specialist mortgage arrangement as holiday let properties are mostly excluded from the permitted uses of a buy to let mortgage.
However, just because it’s a specialist mortgage doesn’t mean there isn’t a range of choice! More lenders are now starting to offer holiday let mortgages as they recognise the boom this sector is already experiencing, so you’ll hopefully be able to find something that suits you.
Another option could be to borrow against your own home to raise funds and purchase the new property for cash, as this could be more cost-effective. I would recommend speaking to a broker who will be able to cost up both options for you to compare.
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Question
What’s the minimum I can borrow?
My husband and I are looking for a buy-to-let property and we have found somewhere ideal but it needs some work.
We can pay for the property almost outright (after negotiating the price down as far as possible) but we will probably need to borrow around £25k to £30k (property value is £190k) to secure the deal and pay for the improvements. Is this too small an amount to borrow?
Answer
There are a few lenders who would offer a mortgage of £25,000, although others have a minimum of £50,000.
To ensure you don’t waste your time and money by approaching the wrong lender, speak to a broker first who’ll be able to help you access the right lenders.
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Question
Can I buy a new build to let to tenants?
I am about to launch into the buy-to-let process and am purchasing a new build property. I contacted a local broker who told me it might be tricky to get a mortgage on a new build at the moment? Is this true?
Surely this only applies to first-time buyers? I own my own residential property and therefore am certainly not a first-time buyer. I wondered if there was any reason why new builds might be a no-no for landlords.
Answer
Lender attitudes towards new build properties do vary: some won’t lend on them at all, some limit the maximum loan to value (especially on flats), but there are some lenders who treat them the same as similar non-new build properties.
You definitely have options, so I think you’d be better off speaking to a different broker!
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Question
I am a pensioner – can I get a buy-to-let mortgage?
I am due to retire at the beginning of next year and will be reliant on my pension. I have been toying with the idea of investing in a buy-to-let property to boost my income and wondered whether I would be eligible at my age?
Firstly, I have a good pension – I am a fortunate that it is a final salary pension – so I know I will have a steady income. On top of this I also have some money in investments (stocks and shares ISAs) and I own my home outright. I have no dependents – unless you count a rather needy dog!
Answer
The majority of buy-to-let lenders are happy to lend to those who receive their income from a pension, particularly if it’s a private pension.
I’m guessing you’re aged between 60 and 68, so the other good news is that the majority of lenders will be happy to offer a mortgage term of up to 25 years. I can’t see these being issues in terms of your ability to obtain a buy to let mortgage – needy dog included!
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