If you are looking to invest into property you are likely to consider a Buy to Let mortgage.
It is fair to say that advice in this area has never been more relevant or important in helping you make the right choice of lender.
Lenders in early 2017 were required to change the way they scored the affordability of buy to lets and as such, to meet affordability guidelines, higher deposits are often now required in many cases.
The changes don’t stop there. The government introduced the “second property tax” in 2016 which means when buying a buy to let you are likely to pay an additional 3% of the property value . For more information on this visit https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
As well as this there are fundamental changes to the way income received from buy to let property is being taxed. We are not tax advisers and recommend that you seek independent advice from a suitably qualified accountant before proceeding with a buy to let property purchase. Tax treatment is based on individual circumstances and may be subject to change in the future.
There is also a growing market place for Limited company Buy to Lets and many high street lenders will not consider this form of lending so you will need specialist advice in this area.
As a ‘whole of market’ broker, Wyke Financial is ideally placed to advise you on the most appropriate mortgage solution for your buy to let property. Having a property as an investment might appeal to people who have more faith in bricks and mortar than the stock market but remember there are no guarantees. This is a long term investment which you hope will generate rental income along the way and a profit when you sell the property, but bear in mind that if you need access to some cash a property can take time to sell or re-mortgage. If house prices fall, you might not be able to sell for as much as you had hoped. You would have to make up the difference if the property sold for less than you owe – a risk that increases, the higher the percentage you borrow. If you sell for a profit, you may have to pay capital gains tax. Don’t forget that with a variable rate mortgage, your costs will rise if interest rates go up. This would eat into, or even wipe out, your income and profit.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR PROPERTY. YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST FORMS OF BUY TO LET MORTGAGE OR TAX PLANNING.