Buy To Let and Residential Investment

Buy to let mortgages for residential properties are a recent innovation in the UK market. Introduced in the mid 1990's by a now defunct Building Society and following the introduction of Assured Shorthold Tenancies.

Today, more than fifty lenders are active in the UK buy to let market, with the value of the buy to let property market estimated at more than £50 billion and notwithstanding the turmoil in 2007-2009, many have recently relaxed their lending parameters.

Some 10 years ago one could have expected to pay a 2-3% premium over a standard residential, owner-occupier loan, but this margin has steadily diminished since.

Investors acquire buy to let properties for two main reasons: to generate income and to accumulate capital. and a prudent property purchase should result in both these aims being achieved.

However,a purchaser should decide which of these aims is the more important as it is likely to influence the type of property that is purchased.

From the borrower's point of view, two main differences exist between a buy to let mortgage and a conventional home buyers mortgage:

The size of the mortgage can be influenced by the projected rental income that can be achieved from the property and the borrower will have to find 10-15% of the cost of the property from their own resources.

Many mortgage providers will expect the rental income from a buy to let property to at least cover the cost of the interest payments OR that a borrower has recourse to outside income in the event of a shortfall,whether arising from a void period or otherwise.

Some lenders, in any event will allow a shortfall from inception of the loan but will invoke a lower loan-to-value.

Firebird can help with all types of buy to let mortgages - including adverse history and applicants without proof of income.

Loans available to age 75.