New Build for Investors

When buying a new build property, you may be an investor who wants to purchase property to let out to tenants.

Over the next few years there will be updated requirements where a property is needed to meet better energy performance rating. Buying a New Build could make this an easier process for you.

Buy To Let

If you’re planning to purchase a property to rent out for profit, then you’ll need a Buy to Let (Buy to Let) mortgage. It’s illegal to rent out your home if you have a standard residential mortgage without consent from your lender, but it is sometimes possible to convert your mortgage type.

If you plan to apply for a Buy to Let mortgage, you should be ready to be subjected to additional acceptance criteria to a residential mortgage application. Whilst the exact criteria will vary slightly from lender to lender, it’s very likely that you will:

• Need to own a residential property (a mortgage is fine, it doesn’t need to be outright)
• Have a salary of at least £25,000 (Not all lenders have a minimum, but some do)
• Maintain a good credit score
• Need to repay the mortgage fully between the ages of 70-75

Most Buy to Let mortgages are arranged as interest only, rather than repayment. The interest rates are higher than they are for other types of mortgage and you’ll need a minimum deposit of 25%. You’ll also need to fit criteria for affordability based on the monthly rental payment.

It’s important to note that, much like you can’t rent out a residentially mortgaged property, you cannot live in a Buy to Let mortgaged property. Also, not all Buy to Let mortgages will be regulated by the Financial Conduct

Authority (FCA). Examples for BTL Mortgages that are covered by The Financial Conduct Authority include purchasing the property with the sole intention to let it to close family members, accidental landlords and Consumer Buy to Lets Before you make a final decision about entering the Buy to Let property market, you should be aware of the additional tax implications incurred:

• 3% higher stamp duty will be due on your Buy to Let property than on residential properties
• Income tax is payable on both your rental income and any profits from the sale of your property, should you sell it
• Capital gains tax is payable when you sell the property

With regards to the income tax payable on rental income, you are entitled to tax relief on certain aspects of the properties upkeep. For example; property repairs, letting agent fees and council tax. You should also take into consideration, however, that the additional income will affect your overall tax band too. We advise you to always seek advice from a tax specialist.