The buy to let market in the UK is very popular; figures show that in 2006, 10% of all mortgages taken out in the UK were buy to let mortgages. Buy to let mortgages are designed and used to help people finance the purchase of a property with the view of letting it out to tenants and charging rent.
The buy to let mortgage market has risen sharply in popularity in response to the increased number of people getting into the business to purchasing a property to let it out. High financial gains in the long run can be yielded from the property letting industry and the prospect of becoming a landlord owning numerous buy to let properties gets most people excited. Buy to let mortgages help these people realise their dreams and get onto the property letting ladder and securing their future financial security.
There are more restrictions and criteria’s involved in buy to let mortgages compared to residential mortgages. The decision to grant a buy to let mortgage or not is based largely upon the potential rental income from the property, and not solely based on the borrower’s personal income or annual salary. The reason for this is so that the lender has reassurances regarding the repayment of the mortgage and they favour properties which have the potential to grow in value.
Before purchasing a property for the purpose of letting, it is important to carry out extensive research such as the likelihood of the property being successfully rented, people can be advised regarding this matter by local estate agents and experts. A survey of the property will also needed to be carried out to see if the property requires any extensive repair which could eat into the profits. Also it is essential to find out if it is possible for the house to be granted a mortgage which is a decision dependant on numerous factors.
There is no doubting the possibilities of the buy to let market as a profitable industry, a buy to let mortgage allows the average person to purchase a house and hopefully earn long term profits and secure their financial future, the first property could also lead onto much bigger things.