Buy to Let Mortgages
A buy-to-let mortgage is a mortgage sold specifically to people who buy property as an investment, rather than as a place to live. Investing in property is generally well understood but a number of changes have happened within the last few years that have made this once simple product deceptively complicated.
New legislation that has created differences between borrowing as an individual or as a company, accidental landlords, portfolio landlords, PRA regulation relating to what rental a property has to generate to enable given levels of borrowing all conspire to make this a minefield, even for the experienced property investor.
Combined with this is a perfect storm of economic conditions; the low level of income generated by keeping money in the bank has led people to invest in property but with a desire to get as much money out of the property as possible.
With people naturally wanting to increase their “yield” (the amount the property generates) the market for more complex buy to lets such as –
- HMOs (houses of multiple occupancy)
- Holiday Lets
- Air BnB
- Serviced Accommodation
- Properties over commercial buildings
- Multi-unit properties
has ballooned, as has the desire to take a simple property and convert it into a higher yielding asset.