A Buy-to-Let mortgage is generally available on a wide range of property types, although there will always be a number of styles of accommodation that need a specialist approach or indeed will not be suitable.

Leasehold properties are perfectly acceptable subject to the terms of the lease. Normally, any remaining term on a lease would need to be at least 70 years. A shorter term will affect the term of the mortgage and potentially the current value of the property. In the event that the lease is not suitable because of the term, a new or extended lease may be negotiated with the current owner and the Landlord.

As with a standard residential mortgage, mobile homes and houseboats tend to be excluded by lenders as suitable security.

Certain types of property may need consideration by a speciality or niche lender.

For example;

• Studio Flats with a very limited living space.
• Ex Local Authority Flats in larger blocks and/or with deck access.
• Flats above certain types of commercial property, typically fast food outlets.

A lender may also take into account any other property you have in the same street/postcode area in order to limit their risk and exposure to that area.

As each lender will have a different approach to certain types of property, contact us to discuss your specific situation and we will guide you through the process. By doing this, you are more likely to avoid the disappointment of being declined by several lenders before the correct solution is achieved.

You can apply for consent to let on your residential property from your current lender if you only intend on renting it out for a certain period of time – e.g. a year. Alternatively, if you want to let out your current home indefinitely and maybe release some equity from it at the same time to buy a new home, you’ll want to consult a mortgage broker about letting to buy.

Buy-to-Let Mortgages are normally available to people who already own a residential property or live in their own home, either with a mortgage or totally unencumbered.

However, there is an increasing number of people who either live with friends/family or rent themselves and have in fact bought property to rent out, in order to maintain a place on the property ladder. There are a number of lenders who are happy to do business with applicants who “own” property rather than “own/occupy”. You will need to provide full details of your current investment portfolio together with rental and income evidence.

It may be more difficult to get a Buy-to-Let Mortgage as a First Time Buyer, but it is by no means impossible. A lender would normally expect you to be able to afford the loan on a residential basis.

As well as borrowing money in your personal name, mortgages are available to Limited Companies that are specifically created for the purpose of owning and renting property. These “Limited Company” Buy-to-Let products may be suitable for some borrowers more than others depending on individual tax status and investment objectives. It is very important that you understand the main differences. Good advice from a suitably qualified accountant or tax specialist will help with this decision.

Owning a Buy-to-Let property is an investment opportunity many people aspire to and indeed thousands of people successfully venture down this road. For those would be investors who find themselves with a history of bad credit this however could just appear a pipe dream. The good news is that just as with a residential mortgage there are lenders in the market that will look to assist these potential investors.

The short answer is yes. Leasehold property is no different to Freehold property as long as there is a suitable Lease in place. Leasehold property does have associated costs and charges, such as Ground Rent and Annual Service / Maintenance Charges, which are made in respect of the upkeep of communal areas and services carried out by the Landlord.

The term remaining on the lease may have an impact on the value and suitability for mortgage purposes. A lease with a term of less than 70 years remaining is likely to result in a lower valuation of the property and subsequently a reduced mortgage amount and term. A new or extended lease is the usual method of dealing with this issue. This is negotiated with the current owner and the Landlord

Any Leasehold related charges are taken into account by the lender as a regular commitment and will be factored in to the affordability calculator used when looking at the amount that may be borrowed against the potential rental income. It is therefore vital that you familiarise yourself with any ongoing costs and establish whether these are likely to increase and therefore limit the net income of the investment.

Consideration should also be given to the owner of the Freehold. In the past, investors may have owned a leasehold property and also have in interest in the Freehold of the Building. However, this is becoming less popular with lenders who are no longer happy to accept this if the leaseholder has a significant stake in the Freehold.

Buying a new build property is treated exactly the same for Buy-to-Let as for new build owner occupied mortgages.

Minimum deposits are required and the proposed rent will need to be sufficient to satisfy the lender affordability calculation.

There may be some benefits to buying a newly built property, particularly the lack of ongoing maintenance in the early years which gives the opportunity for greater profit. There may also be some added incentives such as vendor purchase price/fees contributions including flooring and possibly white goods.