Buy-to-let mortgage guide: How much you can borrow?

Daniel LeesMortgagesLeave a Comment

If you intend to let out your former home long-term — or if you’re buying a buy-to-let property — you’ll need to get a buy-to-let mortgage. Coined as a world first by Britain in 1996, these loans are based on what your property would let for, instead of – as for residential mortgages – what you earn. Fees can be … Read More

Why you can’t let your home on a residential mortgage

Daniel LeesMortgagesLeave a Comment

You might think that, as long as you pay your residential mortgage, your lender won’t notice or care if you start letting out your home, right? Wrong. Strictly speaking, you would be committing mortgage fraud. Though less serious than taking out a mortgage under false pretences, this would still breach the contract that you signed with your lender, in which … Read More

What to budget for in running a rental property

Daniel LeesLettingsLeave a Comment

When it comes to running costs for your rental property, you can try and budget for every last key, stamp and phone call, but the only certainty is that you’ll be wrong. We try to be wrong in the right direction, with broad but pessimistic estimates of: Mortgage repayments. If you have a mortgage, this will almost always be your … Read More

How to get your rent valuation right

Daniel LeesLettingsLeave a Comment

Let’s get one thing straight: the market, not the landlord, dictates the rent. Forget about asking £100 a month more just because your mortgage rate is up. Laid-back tenants who have stayed on for years without a rent rise might oblige, but the rest will take their business elsewhere. Beware, too, of letting agents who butter you up with inflated … Read More

What to budget for when buying a property

Daniel LeesProperty marketLeave a Comment

To help beginners buying an investment property, we include typical amounts to budget for: The property itself. Your biggest cost by far. To buy with a buy-to-let mortgage, you’ll need a deposit of at least 25%. Your purchase price will of course be clear if you’ve already paid it, but it’s not that simple if you’re looking to buy. The … Read More

How to work out your rental property’s yield

Daniel LeesProperty marketLeave a Comment

Is your rental property a B league player, or a star performer? Measuring its performance will help you to decide what to do next: sell it and buy something else, take out equity to buy another – or, at the very least, have peace of mind that the figures do stack up. Doing these sums is a key part of … Read More

Income versus growth in property investment

Daniel LeesProperty marketLeave a Comment

Besides leverage, the second reason property is a great asset is that it combines two forms of return: long-term capital growth and regular income (rent). Cash gives you income alone (interest); shares can give you capital growth and only sporadic income (dividends). As discussed in our goal exercise, your property goal might mean that you prioritise income or growth, but … Read More

How leverage works in property investment

Daniel LeesProperty marketLeave a Comment

Why is buy-to-let property such a good thing to invest in? The answer lies in leverage, also called gearing. As the word suggests, it acts like a lever: if you apply a small force (your deposit) to a lever (your mortgage), it amplifies the effect (your return). In a rising market, this catapults what would have been ordinary returns into … Read More