Buy To Let Mortgages For Multiple Properties
Our Buy to Let Mortgage Service
Special features of what we offer include:
- Specialist service for landlords with multiple properties
- Whole of market service - We work with over 60 UK lenders
- Top rates! - Access to leading market mortgage rates
- Exclusive rates - Access to buy to let deals not available on the high street
- Quick turnaround - Speak to us today if you need to move quickly
- We have lenders who will take into account previous defaults and missed payments
- Looking to raise additional finance on top of your existing buy to let mortgage portfolio? - We have access to a range of finance solutions.
Buy to Let Mortgages for Multiple Properties
Overview of Buy to Let Mortgages
If you want to buy a property with the intention of renting it out, you will require a specialist mortgage, known as a buy to let mortgage. Buying a property to rent out can offer the opportunity to benefit from capital growth on the value of the property, as well as income from rent payments.
How Many Buy to Let Mortgages Can I Have?
Unlike residential mortgages, buy to let mortgages are primarily dictated by the level of rent that the property can achieve. As a result, you are able to take out multiple buy to let loans (providing that you meet the lenders criteria).
However, it is worth noting that you might face difficulties acquiring multiple mortgages on properties within the same area, as it is seen as more risky for lenders should a unpredictable factor affect the renting conditions in that particular area.
Buy to Let Mortgage Tax Rules
From 2017, landlords can no longer deduct their entire finance costs from their property to calculate their profits. Many buy to let owners may see their tax bill increase heavily next year, especially those with multiple properties.
Landlords with multiple properties will be affected the most, as the more properties that a landlord owns, the higher the potential finance costs that cannot be deducted at the end of the tax year.
Unlike private landlords, limited companies’ finance costs are unaffected by the recent mortgage interest tax relief changes. This means that only the profits derived from limited companies’ buy to let properties are taxed.
This has led to a number of private landlords with multiple properties looking to set up their own limited company, as a way to avoid the effects of the new buy to let rules.
Considerations for Multiple Buy to Let Mortgages
Before you decide to expand in the buy to let market, you should be aware of the increased costs associated with multiple mortgages. In addition to raising enough money for the deposit, you should also consider the costs related with the following.
- Letting agent fees – you do not have to use a letting agent to rent out or manage your rental property, but it can be more convenient to do so, in which case you will need to factor this cost into your overall expenses.
- Stamp duty – this tax applies if you buy a property worth more than £125,000, just as it does on residential mortgages
- Maintenance – as a landlord, you will be responsible for the upkeep of the property
- Rental insurance - this type of insurance covers you if you cannot rent out your property, or if your tenant goes into arrears.
- Safety checks – these are an annual requirement
- Landlord insurance – this type of insurance covers the building and its contents
- Income tax on your rental income – you will need to declare your rental income on your Self Assessment Tax Return each year. If you want to pay an accountant to organise your taxes for you, you will also need to budget for this.
- Capital gains tax (CGT)- when you sell the property – unlike your primary residence, a property that you rent out is not exempt from capital gains tax
- Inheritance tax – any rental property you own will be considered part of your estate in the event of your death.
Changes to Buy to Let Mortgages
From 2017, further changes to the regulations around buy to let mortgages will be implemented, which will make it harder for borrowers to secure finance for their buy to let properties.
Review of the entire portfolio: Traditional lenders will have to look at a borrower’s entire property portfolio when deciding whether to grant a mortgage for a buy to let property.
There will be a requirement for the borrower to provide full disclosure of financial records detailing every buy to let property. This could affect the borrower’s application, particularly if some of the rentals are more profitable than others.
A stricter stress test: Lenders will have to review new mortgage applications to make sure the borrower can afford the repayments in the event that interest rates hit 5.5%. The new stress test is likely to introduce even stricter criteria, which will require borrowers to have a rental coverage ratio of at least 145% of the buy to let mortgage.
If you think you may benefit from our service, you can fill in our online contact form to request a call back from our buy to let advisory team, who can provide you with a free initial consultation about mortgages, or call directly on:0117 403 4474