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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
Is the holiday-let market still worth investing in?
I’m a buy-to-let landlord with two properties. I recently stayed in an Airbnb property during the summer holidays and after doing the sums feel this would be a brilliant investment opportunity.
I wondered what the situation with holiday-lets is now the pandemic staycation buzz has died down?
Do I need to live in the property for a certain amount of time? And is there a specialist mortgage or will a standard buy-to-let do the job?
Answer
Airbnb can be incredibly lucrative, but it’s worth also considering the additional running costs of this type of rental and the commitment it requires.
We have clients who have embarked on this type of letting only to decide it’s not for them, but likewise, others who have made a real success of it and have increased their portfolios!
You would need a mortgage which allows holiday letting and/or Airbnb – these are not the same thing, so you need to be clear on your plan and seek professional advice.
If you’re planning on living in the property most of the time, but letting it on an Airbnb basis for a few weeks a year, then you need a homeowner mortgage where the lender allows you to do this within their T&Cs.
If you plan to let it out all the time, then it’s a buy-to-let which has the right permissions. A good broker can run through the options with you and send you to the best lender.
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Question
EPC challenges: What funding options are available when I remortgage?
I’m due to remortgage on my buy-to-let property in 2025 and have just heard, at the same time, new rules will come into force which mean I’ll have to have an EPC of C or above.
My property needs quite a bit of work to achieve this status and therefore I cannot afford to make the changes now.
Could I include additional funds to make the changes when I remortgage in 2025 or is this too late?
Answer
I am so glad to hear that you are thinking about this. The Minimum Energy Efficiency Standard (MEES) changes are not yet confirmed, so whilst 2025 looks likely, there are thoughts this may be delayed to 2026.
As such, whether you will be too late is hard to say. I would encourage you to speak to your current lender and see if they can offer you a further advance (like a top-up mortgage) now, so you can get the work done.
I would advise you not to leave it until 2025 to get the work done unless you can avoid it, as depending on the MEES dates, you could end up with a property which is not lettable, and thus not mortgageable!
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Question
Setting my rent: Will the price affect the mortgage?
I am looking at buying a buy-to-let property in a nearby town and have found a property for £300,000 (Kent).
I’ve been looking online for similar properties and it looks like I could charge £1,300 pcm for this particular three-bed terrace house.
I have £90k to put down as a deposit on a mortgage. I wondered, therefore, if I could realistically charge the going rent or if I might need to charge more as my deposit is quite small.
I am new to being a landlord so not really sure about how lenders calculate repayments and rent. Should I be guided by my finances or the market?
Answer
You can really only charge the market rate for rent. Charging anything higher may mean you have an empty property which, as all landlords will tell you, is a very expensive thing to have!
When assessing your mortgage application, the lender will look at the rental figure, and then run a calculation to determine whether this is sufficient to support a mortgage of the level you are asking for.
I have taken a quick look at the numbers, and I think several lenders would be happy that £1,300 per calendar month rent would support a mortgage of £210k.
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Question
HMO: Am I too inexperienced to let a property to students?
I’m about to buy my second buy-to-let having purchased my first in 2019. It’s going well and I’ve been reading quite a lot recently about renting out a property with multiple rooms to students.
The good news is there are some suitable properties in my area. Even better, my husband is a builder and between us, I believe we can do the necessary work to renovate a three or four-bed home into five self-contained dwellings with shared facilities.
Problem is, I am quite new to buy-to-let and wondered if I needed a bit more of a portfolio or history to be accepted for the mortgage? Also, do I need to get a specialist HMO mortgage and are they easy to come by?
Answer
It’s great to hear your landlord journey has been going well! You certainly went into the market at a challenging time, so I am glad it’s working out for you!
You will be able to get a mortgage suitable for an HMO property, however, you have mentioned that you may need to do some work to the property first.
It may then be that, to begin with, you will need a slightly different structure to the mortgage until the works are completed.
So in essence, yes, you can get a mortgage, but you should speak to a broker who can guide you on the best way to finance the property.
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