Buy-to-let mortgages differ slightly from conventional mortgages.
Interest on buy-to-let mortgages is typically higher than on conventional mortgages, usually around 1-1.5%. The reason for this is that many landlords with buy-to-let properties will rely on the income from the property to meet the mortgage payments, and as properties can sometimes sit dormant for long periods of time there is a higher risk to the mortgage lender that the landlord will default on their payments. For the same reason, the lender might also require you to put down a larger deposit – usually around 25%.
The amount that you can borrow varies from lender to lender. It depends on your income and tends to be around three times that of your salary. Around the time you are looking for a mortgage you should be in contact with an estate agent who will be able to give you an indication of how much you might be able to charge for the type of property you are considering. The amount you can borrow is also linked to the income your property will generate and so mortgage lenders will often require that the income be 25-30% higher than your rental income.
- We have extensive local knowledge and experience of letting all types of residential properties in York and the surrounding villages.
- We are an independent, family run letting agent and pride ourselves on providing a friendly, professional service catering for your individual needs.
- We provide a pro-active service, regularly communicating with our landlords regarding their properties.
- We are members of the Mayfair Office enabling us to showcase our listed properties nationally and internationally giving you a different channel through which to rent your home.
- Our city centre office is open seven days a week.
- We offer both full property management and let only services.
- Professional cleaning is included in our tenancy agreements.
- Our Platinum Level Management Service includes all the benefits of our fully managed service and includes our 100% rent guarantee, assistance and compensation for legal costs should you need to regain possession of the property.
Taking a deposit from a tenant before they move in can provide some reassurance that if things go wrong there will be funds available to cover it. However, by law landlords are required to protect the deposits of their tenants. Disagreements are common and the Tenancy Deposit Scheme (TDS) was introduced to provide an impartial adjudicator to mediate such disputes.
Landlords now have 30 days to transfer a tenant’s deposit to a TDS from the date it is taken and then provide the tenant with prescribed information which documents how exactly the deposit is protected. If the tenants at your property cause damage or items disappear then you can make reasonable deductions. However, it is important that you take steps to document an inventory of items provided when the tenant moves in and you could also take photographs to evidence the condition of the property. If you and the tenant do not agree on the degree of deductions, then a dispute can be raised with the TDS who will mediate and decide on what they deem to be a fair split.
As a landlord you will also need to be prepared for unpredictable events such as fires and floods which could cause damage to your property. In fact, you might not be able to get a mortgage without insurance in place. There are various types of landlords’ insurance and it is worth shopping around to find the most competitive one. The key types are as follows: Landlords expenses insurance which helps pay for legal costs if there is a dispute with one of your tenants.
Landlords contents insurance which protects furnished properties against theft or damage Landlords loss of rent insurance which helps to replace income lost when a property is unable to be rented out due to accidental damage such as by a fire. Landlords home emergency insurance which can help pay for emergency repairs like gas leaks Landlords liability insurance protects landlords against claims by visitors to the property who might be injured while visiting.
Smoke alarms are integral in giving tenants warning of a fire in their property which increases the chances of the fire being dealt with and preventing a disaster, so it is important to have one installed. Furthermore, for properties built after 1992 it is required by law to have a smoke alarm installed on every floor. You should also be aware that you have a responsibility to ensure that any furniture that remains in the property for your tenants meets fire safety regulations.
It is a landlord’s responsibility to have gas and electrical safety checks carried out by an appropriate person before a tenant moves in. You are also required to have an Energy Performance Certificate in place to give prospective tenants an insight into the efficiency of your property.
Although tenants are expected to keep your property maintained in good condition, landlords are responsible for the provision of gas, electricity, water, heating, and sanitation. They are also responsible for the exterior and structure of the property.
Landlords need to be registered for self-assessment and keep good records of their income and expenditure. You may be able to offset your tax against outgoings like your fees and bills for landlord insurance, energy efficiency investments (up to a certain level), wear and tear to the property, interest payments on your mortgage and any repairs that you must carry out on the property.
We generally find tenants looking for one or two bedroomed properties look for furnished, whilst three or four bedroomed properties appeal to families who may have owned their own property before and are looking for something unfurnished.
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