Residential Investment Properties.

Mortgage Market (Yorkshire) Ltd. has much experience in obtaining funding for the purchase of residential investment properties on behalf of their clients.This type of property investment is often described as 'Buy-to-let.' To be eligible for funding within Buy-to-let schemes, the purpose of the properties must be for letting to residential tenants on assured shorthold tenancies. While all proposals are considered, Mortgage Market (Yorkshire) Ltd. is particularly interested in securing finance for clients planning to acquire quality properties in areas where market intelligence predicts good prospects for capital appreciation.

Investment strategy.

With the current low interest rates, buying property on mortgage, to let, has become a very attractive proposition. Mortgage Market (Yorkshire) Ltd. has been prominent in aiding those who wish to invest in property in this way. We obtain suitable Buy-to-let mortgage loans and assist in planning property portfolio strategies. With careful selection of suitable properties, investors are looking to see a considerable capital gain due to rise in the property value(s) over time. Properties may be sold eventually, in order to free capital and realise the gain for fresh investment. On the other hand, when a property has risen in value, it may be refinanced to release new capital for further ventures.

Demand.

In the Spring of 2001, Mortgage Market (Yorkshire) Ltd. found itself to be receiving Buy-to-let enquiries in previously unmatched numbers as the potential for this form of investment became more widely appreciated. Mortgage Market has organised itself to meet this demand. It has allocated resources to a department specifically to assist applicants with Buy-to-let enquiries and source suitable mortgage loans for them.

What type of project can be considered?

The simplest proposals relate to single property single occupancy schemes. At the other end of the Buy-to-let spectrum are portfolios with many properties, perhaps including 'multilets,' where a single building may for example contain a number of flats.

Need the property already be tenanted?

Not necessarily. For 'Buy-to-let' funding, some lenders do require that a property is either already let or could be let immediately on completion. However, other lenders will consider lending on properties which require alteration or conversion whereby the property may not be ready for letting at completion.

How much can be borrowed?

A general requirement for a Buy-to-let is that the income stream from the rental should fund a certain percentage of the mortgage payments. The test applied varies depending on the particular lender. For example, to ensure a margin for amongst other things, property maintenance and interest rate changes, a lender may require that the rentals cover up to say 130% of the mortgage payments. Where the property is not currently let, then a professional rental assesment will be required commenting on the potential for letting the property and determining the rent that could be obtained. An additional test is that the purchaser can afford their existing commitments.

How much deposit is required?

The deposit required by an investor will depend upon the lender and the scheme, being typically say a minimum of 15% for property values up to £500,000 though for some schemes higher deposits may be required. For properties with values above £500,000, higher percentage deposits are likely to be required. Within some schemes, additional security, say in the form of other properties or endowment policies with significant surrender values can be used to increase the loan available. Some lenders will allow interest only mortgages on Buy-to-let loans.

How do I know whether my proposal will fit the guidelines?

The guidelines provided above are 'rule of thumb' only. We receive e-mails requesting general information on Buy-to-let schemes. However as there are various schemes available from different lenders, and, as available schemes change through market conditions, no hard and fast rules can be provided. This does mean, however, that there is variety in the market from which Mortgage Market (Yorkshire) Ltd. can source Buy-to-let mortgage schemes suitable to any particular applicants and their projects.

What about your project?

No single proposal is quite like any other. Therefore if you have a proposal in mind, please do not hesitiate to contact us with your project details.