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Buy-to-let

You may have heard of some people owning more than one property and renting them out. These properties that are bought and rented out are known as buy-to-let or investment properties.

In fact some people make a living out of buying and renting properties and are known as professional landlords.

The buy-to-let market is not one to be entered into lightly. There are many pitfalls as well as advantages and understanding your market will make the difference of whether you decide to invest or not. There are many tax implications such as additional stamp duty, whether to buy as an individual or via Ltd Company and how the rental income is treated.

Typically the buy-to-let market requires a higher deposit than a house purchase. 20% is common and in many cases 25% is required. That’s a big chunk of money you have to find and therefore the return you get is vital.

Be very aware though that the taxman is looking over your shoulder and may want a portion of your rental income or profit when the property is sold.

Typical fees and costs associated with a buy-to-let purchase or buy-to-let re-mortgage: –

Along the lines of the relevant house purchase and re-mortgage costs. However, there is now an additional surcharge on BTL purchases or second homes above £40,000 of 3%. This 3% is therefore to be added to any existing percentage in each band.

Most Buy-to-Let mortgages are not regulated by the Financial Conduct Authority.