Investing in property is an interesting way to finance retirement - not only can you actually see your money growing but you also have complete control over your investment rather than having to rely on a third party. Investment properties however require specialist buy to let mortgage products which consider different criteria to a mortgage for your home. Our associates – Mortgage Advice Bureau - can find you the very best deals on offer. Together we are able to guide you through the process of finding the right kind of property which will bring you the return you are looking for and advise you on how much you can spend to optimize your rental income. Whether you are looking for your first investment property or you plan to expand an established portfolio, we have the expertise to ensure your mortgage is the right one for you.
The term of a Buy To Let mortgage can be between 5 and 40 years.
Property and tenant type will affect borrowing options.
Limited company Buy To Let mortgages are available.
Buy To Let mortgages, unlike residential mortgages, are generally not calculated as a multiple of the applicant’s income. Instead they are calculated using the achievable monthly rent, against the interest only mortgage payment.
Buy To Let mortgages are available to first time buyers, although criteria is more restrictive.
You must consider what type of mortgage you require to buy the property, along with the impact of future rises in interest rates.
It’s also important to consider how you would meet monthly mortgage payments if the rent was not paid or the property is empty. Please contact us about our Rent Recovery Service for landlords
Tenants’ safety is of utmost importance to us and our landlords, who could be held liable if any accidents happen in their property. There are many areas of legislation within the world of lettings to protect all parties and we are here to offer advice on the following key areas:
Annual Gas Safety Certificate – must be carried out and checked by a Gas Safe registered engineer
Smoke Detectors and Carbon Monoxide Detectors (Smoke and Carbon Monoxide Alarm (England) Regulations 2015).
It is a legal requirement to install one smoke alarm on every floor of a property and a carbon monoxide alarm in all rooms with a solid fuel burning appliance such as wood burning stoves and open fires. We also recommend a carbon monoxide detector is installed wherever there is a gas appliance. It is the landlords responsibility to ensure all alarms are in working order at the start of any new tenancy.
Electrical Safety Certificate – An Electrical Safety Certificate is not demanded by law however it is the landlord’s responsibility to ensure that all electrical equipment and systems are safe. Certificates are usually valid between 5 and 10 years depending on the age of the installation.
Portable Appliance Testing (PAT) - We recommend a Portable Appliances Test (PAT) for any electrical item left in the property with a plug such as toasters and kettles, fridge freezers and washing machines.
Legionella Risk Assessment - We must advise that there are now important changes in the legislation concerning the control of Legionella bacteria in water systems which apply to all providers of residential accommodation. These changes to the Approved Code of Practice ( ACOP) mean that all rental properties are required to have a Legionella Risk Assessment.
The Health and Safety at Work Act and The Control of Substances Hazardous to Health Regulations extend to rented properties and document HSG274 specifically states that Landlords have a legal obligation to carry out an annual risk assessment in respect of legionella bacteria. There are significant penalties and fines for not complying.
For more information please see www.hse.gov.uk/legionnaires/faqs.htm
A risk assessment involves assessing whether conditions are right for bacteria to flourish. The greatest risk is where water is present at temperatures between 20C and 45C. Stagnant water, in tanks for example, infrequently used outlets, showers and air conditioning units, debris in water systems, and thermostatic mixing valves should checked and corrective action taken where necessary. Safeguards may involve disinfecting water systems, cleaning shower heads, servicing air conditioning units, removing or stagnant water pools and water tanks from systems, insulating pipework, and keeping water cisterns properly covered and free of debris. The guidance specifies annual risk assessments and insists that landlords and agents keep records of these for at least five years.
We can arrange the assessment on your behalf should you wish by fully trained and accredited local companies who are currently doing assessments on behalf of our clients. A full certificated report will be produced for your inspection / records.
The Furniture and Furnishings (Fire Safety) Regulations 1988
1. Filling materials must meet specified ignition requirements
2. Upholstery composites must be cigarette resistant
3. Covers must be match resistant
4. A permanent label must be fitted to every item of new furniture (with the exception of mattresses and bed-bases)
Energy Performance Certificate - You will also need an Energy Performance Certificate (EPC) for your property before marketing begins.
Tenancy Deposit Scheme - Legislation also demands that the majority of tenants’ deposits must be held in a government-authorized Tenancy Deposit Protection Scheme, so we will advise on which scheme to use. Since the introduction of this scheme, property inventories are being increasingly used to settle disputes so it is vital to get a good quality, preferably photographic, inventory done before your tenant moves in. We use a well proven inventory system to compile these documents on your behalf.
Buildings and Contents Insurance - As well as protecting your tenant, you must protect your property, not just with buildings insurance but contents insurance as well. Specialist landlord insurance is available and we can organize this for you. You may also need written permission from the freeholder or mortgage lender if your property is held on a lease or subject to a mortgage. You must ensure that your insurance provider knows that you are letting the property as it is important to have the correct policy in place.
Tax - Landlords are taxed on their rental income, but if you find a good accountant, they can help you minimize your annual tax bill. There are additional rules and regulations concerning non-UK resident landlords. We will work with your accountant so that relevant costs can be offset against your tax bill, including your mortgage, safety inspections, agents’ fees, insurance costs and inventory fees. It is vital to keep a note of everything you spend on your rental property. At Myring’s we use the most up-to-date computer accounting systems so that our records are held accurately and relayed to you efficiently. These systems ensure that rent monies are collected and paid to you in a timely manner. At Myring’s we understand that your funds must be remitted to you immediately.
We endeavor to ensure that the rent is paid on time. We very carefully select the tenant in the first place, and so it’s unlikely to be a problem. However tenants’ circumstances can change during a tenancy and if the rent is not paid, we will advise you on best course of action.
We can also offer you a rent guarantee policy to give you complete peace of mind. Please ask our lettings team should you require further information