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YOUR RESIDENTIAL INVESTMENT
Buy to Let is a form of residential investment - you buy a property, usually with the aid of a mortgage, and rent it out. Harrison Financial Services has extensive experience of advising clients on their Buy to Let needs and will help you every step of the way with your residential investment.
The 1988 Housing Act made investment in residential property more attractive to landlords when it introduced a new type of tenancy, giving landlords more control over their properties. There has since been a growth in the private rental sector. Improved availability, coupled with attractive rates of interest for buy to let purchasers, has also increased the appeal of owning rental property.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Our advisers will listen to your aims and objectives for your residential investment and will provide you with all the help you need.
WE FIND A MORTGAGE TO SUIT YOUR REQUIREMENTS
Choosing a mortgage
We will help you work out how much you can afford to pay, and how you will afford repayments. If you take out a mortgage, consider what percentage of the property’s value you need to borrow. Typically lenders currently allow people to borrow up to 75% of the value. The size of the loan is usually linked to the expected rental income. As a guide, your lender will expect your monthly rental income to be 25% to 50% greater than your monthly mortgage payments.
Tax Liability
Last but not least, understand your tax liability as a landlord. Before you calculate your income from your property after all necessary expenditure, remember that the profits from renting property are taxable. However, you will be able to offset some of the costs you incur as a landlord against tax.
You will have to pay income tax, stamp duty when you purchase the property and capital gains tax when you sell the property’ You can find out more about the tax treatment of income from rented property in Taxation of Rents; A guide to Property Income IR150 which can be found on www.hmrc.gov.uk
Mortgage Options
Your choice is between a repayment mortgage and an interest only mortgage. If you have a repayment mortgage, we will advise you to arrange life insurance to run alongside your mortgage. With an interest only mortgage, some lenders require you to have a suitable repayment vehicle in place.
Clients can often choose between a fixed rate and variable rate mortgage. A fixed rate will give you some certainty about your repayments, while variable rates may move up or down, affecting your mortgage payments accordingly.
As well as your mortgage payments, we will discuss your need to pay for insurance and maintenance costs and periods when no rental income is received because the property is empty.
‘Greg is a very good listener; sympathetic with my circumstances and provided an excellent solution. I will recommend you.’