Our site uses cookies

I agree Our site saves small pieces of text information, called “cookies” on your device. Find out more in our cookie policy. You can disable the usage of cookies by changing the settings of your browser. By continuing to browse the site you are agreeing to our use of cookies.

Is buy to let really as complicated as it sounds?

Buy-to-let has often been cited as a ‘retirement plan’; an opportunity for those who may have several homes outside of their main residence to let on the open market and to generate further incoming capital to garner a significant lump sum for later life expenditure. 

What should you know about buy-to-let?

If you’re looking to purchase your first buy-to-let, rent to a family member or add to your property portfolio, we’ve outlined four points to consider below:

Remember that not all properties are acceptable for letting

It’s worth noting not all properties on the market are suitable for letting. Lenders have different criteria for the properties they deem acceptable to lend against, therefore, make sure you determine the following: 1.) If the property is a flat, check if it is freehold or ex-local authority, 2.) Decide if you intend to use it as a multi-occupancy property or not (many lenders do not consider lets for students), 3.) Confirm the length of the lease remaining, 4.) Ensure the property has a minimum EPC rating of E.

Be aware of the risks involved

Demand for rental property can fluctuate and, of course, the value of your property could increase or decrease. If rental demand falls then you may have periods where your property remains empty. There could be other reasons why you may not be able to rent your property. For example, if the rent is set too high or the location is wrong, your tenant footfall could be a lot lower and you may start losing money.

Understand tax implications

The buy-to-let market has been affected by tax changes recently, meaning extra stamp duty on purchasing a buy-to-let and changes to the ability to offset all buy-to-let mortgage interest against income tax. Ensure you seek professional advice from a tax specialist as rental income is taxable. 

Consider using a letting agency to find tenants

Using a good letting agency to help streamline your properties is beneficial for a number of reasons. Not only can they offer support to ensure you meet your legal obligations as a landlord, they may be able to let your property out more quickly, get you a better rental price, deal with tenant referencing and checking, provide a suitable inventory check and handle the deposit, and deal with problems that arise during the tenancy so you don’t have to.

YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGANST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPLAYMENTS ON YOUR MORTGAGE.

Contact
Sian Dennis Senior Marketing and Communications Assistant

Sian is responsible for the running of the Society's Press Office and PR strategy as well as the creation of external marketing collateral, digital copywriting, brand awareness and internal communications.

Related articles
Register or amend your preferences for your choice of email alerts

Keep up to date with our latest news, product and event details

You can check the Financial Services register on the FCA's website.

Contact

How can we help you?

01635 555777

Call me back