When it comes to purchasing a property for letting purposes, Rocket Mortgages understands the need for specialized advice. We strive to provide you with a journey that is simple, offers choices, and is backed by expertise. Whether you’re a first-time buyer or an experienced landlord, we ensure that you receive the right guidance and advice. It’s important to note that not all Buy to Let mortgages are regulated by the Financial Conduct Authority.

Before financing your purchase, there are several factors to consider. Firstly, have you accounted for all the upfront costs such as the house deposit, legal fees, stamp duty, and survey fees? It’s crucial to have a clear understanding of what you can comfortably afford to borrow. We recommend making an appointment with a Rocket Mortgages mortgage adviser to discuss your monthly repayment capacity before beginning your property search. In order to assess your financial situation, we will need information about your income, which can be confirmed through your recent pay slips and P60 tax certificate for the previous year. If you’re self-employed, we will require your trading accounts for the past three years. Additionally, it’s important to consider the expected rental income from the property, as this will affect the amount you can borrow. Once we have a comprehensive understanding of your income and expenses, we will provide you with advice and recommendations on suitable mortgage options that align with your present and future needs.

Calculating the costs associated with your buy to let property extends beyond mortgage payments. You will also need to consider expenses such as buildings insurance, contents insurance (if your property is furnished), maintenance costs, and periods when the property remains unoccupied or tenants fall behind on their payments. It’s important to account for potential increases in mortgage repayments due to rising interest rates, which may not be immediately recoverable through rent increases. While the profits from renting a property are subject to taxation, you may be able to offset some of the costs against your tax liabilities. It’s advisable to seek professional guidance from a qualified tax specialist and visit official government websites for more information on the tax treatment of rental income. It’s crucial to be aware of the taxes you will be liable for, including Income Tax, Stamp Duty (during property purchase), Capital Gains Tax (upon property sale), and potential inheritance tax upon your passing.

Choosing the right property requires careful consideration. Conduct thorough research on the desired area where you intend to purchase the property. You can either do this yourself or seek assistance from a specialist letting agent. If you opt for self-research, it’s essential to consult with local estate agents. Keep in mind that tenants’ needs vary, and it’s important to cater to their requirements. Most tenants are working professionals or individuals relocating for work or from overseas. It’s crucial to thoroughly reference potential tenants. If you choose to work with an agent, make sure they understand your tenant preferences. However, bear in mind that stricter requirements may prolong the time it takes to find a suitable tenant.
Desirable properties are conveniently located near public transport, shops, schools, and other amenities, with nearby parking facilities. When viewing properties, try to evaluate them objectively from a tenant’s perspective. Consider the property size that is attractive to renters in the area. Well-maintained properties are in higher demand, so if you lack time or interest in DIY, a newer property may be a more suitable option.

Note:

The Financial Conduct Authority does not regulate some forms of Buy to Lets.