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Rental income down valuations affecting

buy-to-let mortgage applications

Buy-To-Let Mortgages Refused As Surveyors Down Value Rental Income

Buy-To-Let Mortgages Refused As Surveyors Down Value Rental Income

Approvals for buy-to-let mortgages are failing because surveyors are ‘down valuing’ the expected rental income from the private rented sector and are advising mortgage lenders accordingly.

In some cases, surveyors are even down valuing the value of rent already being received by landlords.

The claims were made last weekend in a Sunday Times feature, which says that some buy to let mortgage lenders are rejecting landlords’ rental estimates.

Most buy to let mortgage lenders want to see monthly mortgage repayments covered by rent with a 25% excess, to cover expenditure and void periods. Some lenders want to see 130% of rental cover, while others are happy with 100%.

Down valuation of the potential rental income could result in the refusal of the buy to let mortgage application, or lenders may limit the amount they will offer, often below the borrower’s expectations.

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The latest data published by the Association of Residential Letting Agents (ARLA) has revealed another upward trend in landlord investment and property portfolio building, despite the poor availability of adequate Buy-To-Let mortgages.

The number of UK PRS rental properties owned by landlords increased from seven at the beginning of 2012 to 8 in the final quarter of 2012, with on average, at least 1 of these properties being a HMO.

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2012 Property Investment Review

2012 Property Investment Review

Well it’s the end of the year that was supposed to mark the end of the world for mankind and yet we survived and it wasn’t all doom and gloom, 2012 did bring the UK some joy with events and celebrations across the country, including:

For the general public: An inferior team, who hadn’t won anything for over 34 years, winning the 2011/12 Premiership title with virtually the last kick of the season, (not that I am a biased Man Utd fan or anything….), the Queen’s Diamond Jubilee, the Olympics and Paralympics, the end of the double dip recession,

For Property Investors and landlords: 2012 saw the emergence of Rent Guarantee products that are good value for money, property prices continuing to behave like a roller coaster ride but eventually recovering and ending the an average of 1% year up on last year’s prices and lets not forget the return of some decent Buy To Let mortgage products to the UK mortgage marketplace.

How was 2012 for you? Has the year lived up to your expectations and did you achieve any of your property investment goals?

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UK Newpapers Creating Property Investment Speculation

Buy-To-Let Investors Need To Plan Ahead

Buy-To-Let Investors Need To Plan Ahead

Newspaper headlines last weekend suggested that PRS rents are expected to soar 18% over five years with property investors able to secure an annual 8% return by putting their cash into buy-to-let property.

Apparently according to newspaper reports, rents in London are scheduled to increase even more (up to 26% in 5 years) due to demand by younger people unable to get on to the property ladder.

It has always been true that by putting your money into property, you will be assured of a great rental yield destined only to increase and as we know property market is cyclical and property values will eventually go back up.

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Get Into Buy To Let While You Still Can

Buy to let provides long term security

Property investors should still be benefiting from lower mortgage repayment rates, as many will have now reverted back to their lender’s Standard Variable Rate (SVR) and the record low Bank of England (BoE) base rate remaining at 0.5% has certainly done property investors a huge favour.

This is of massive benefit to property investors as a lot of buy-to-let mortgage deals do not have typical SVR’s but they do revert to a rate that tracks the Bank of England base rate.

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UK Mortgage Approvals Exceed Expectations In October

UK Mortgage Approvals Increase in October

UK Mortgage Approvals Increase in October

UK Mortgage lending reached an 11-month high in October, providing evidence that the housing market may finally be picking up, after a lull in recent months, according to the Council of Mortgage Lenders (CML).

 Gross mortgage lending rose to £12.9 Billion (GBP) and was 4% higher than in the same month in 2011, indicating that the government’s Funding for Lending scheme, designed to boost lending to households and businesses, is having some effect.

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Mortgage Figures Show UK Rental Market Stronger Than Ever

Buy To Let mortgages account for 12.7% of the overall UK mortgage market, the highest ever recorded figure since records began, according to new figures released by the Council of Mortgage Lenders (CML),

UK Buy-To-Let Mortgages AT All Time High

UK Buy-To-Let Mortgages AT All Time High

The total number of active mortgages in the UK stands at 11.3 Million, and buy to let mortgages total 1.44 Million of these equivalent to 1 in 8 mortgages.

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UK Landlords Need More Finance To Expand Rental Property Portfolio's

UK Landlords Need More Finance To Expand Rental Property Portfolio’s

The Residential Landlords Association (RLA) have discovered that finance for landlords is woefully inadequate with almost 50% of UK landlords struggling to get additional mortgages, remortgage or even obtain more finance.

The RLA asked its members about obtaining further finance to expand their rental property portfolios

  • 24.1% found it very difficult to get a Buy-To-Let mortgage
  • 21.3% said it was impossible for them to obtain a Buy-To-Let mortgage.

The Residential Landlords Association findings about finance for landlords comes as the UK Government seeks to boost support for the private rented sector following the recent publication of the Montague Review.

The RLA have also stated that biggest challenge ahead of Mark Prisk, the new Government Housing Minister, will be to unlock enough financial support from banks to help small scale landlords expand their businesses.

The RLA have also voiced concerns about higher rents in the PRS caused by the unprecedented demand for rental property and the current shortage of supply. Additionally, the reluctance to lend by banks is also severely hampering the ability for the private rented sector to grow to meet the housing needs of young people and their families.

RLA Chairman, Alan Ward, said: “We welcome the Government’s renewed commitment and interest in the opportunities that the Private Rented Sector can play in meeting the country’s housing needs. However, this will not happen without financing from the banks. It is time that the blame game for the difficulties in accessing finance between Government and the banks came to an end for the sake of those desperate for a roof over their heads.”

Finance 4 Landlords specialise in Buy-to-Let Mortgages and Remortgages, Landlords Insurance, Rent Guarantees, HMO Finance and Bridging Loans.

Great Mortgage Deals for Landlords

Great Mortgage Deals for Landlords

UK property repossessions increase

UK Property Repossessions are forecast to increase 22% in 2012

UK Property Repossessions are forecast to increase 22% in 2012

Economists expect the recession and rising unemployment to squeeze the already stretched household finances of thousands of struggling families this year and are warning UK homeowners and landlords of a sharp rise in residential property repossessions.

Record low Bank of England (BoE) interest rates and lower than expected unemployment figures kept property repossessions to relatively small numbers through the worst days of the first half of the recession and they eased again as the country struggled into a tepid recovery.

However, with a double dip recession inevitably looming, workers incomes failing to cover spiralling household costs, the Government’s economic cutbacks and welfare reforms starting to bite whilst the beleaguered private sector fails to replace jobs lost in the public sector, economists are fearing the worst.

The Council of Mortgage Lenders (CML) had already forecast a 22% rise in UK property repossessions for 2012 increasing the annual property repossession figures to around 45,000.

The property repossession figures include private residential properties where mortgage payments have lapsed and Buy-To-Let properties where landlords did not have <a title=”Landlord Insurance” href=”http://www.legal4landlords.com/rent-guarantee/” target=”_blank”>Rent Guarantee Insurance</a> and have been unable to keep up with their buy-to-let mortgage repayments due to their tenants not paying the rent.

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