Buy to Let

Your home may be repossessed if you do not keep up repayments on your mortgage.

The Financial Conduct Authority does not regulate on Buy to Let Mortgages.

Becoming a private landlord should not be seen as an easy way of making money. It can be risky and complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will rise. That said, having a second property to let to tenants could reap considerable financial rewards over time.

There are 3 main differences in buy to let mortgages:

• Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not even considered.
• Interest Rate - buy to let mortgages have slightly higher interest rates.
• Larger Deposit - typically a minimum of 20% or 25% of the property's value is required as a deposit.

When buying a second property to let you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 125% of the rental property's interest only mortgage repayments in order to cover your costs should anything go wrong.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income will be sufficient to meet the cost of the mortgage.

Hays Financial Centre Ltd is an appointed representative of Quilter Financial Services  Limited and Quilter Mortgage Planning Limited, which are authorised and regulated by the Financial Conduct Authority. Quilter Financial Services Limited and Quilter Mortgage Planning Limited are entered on the FCA register (http://www.fca.org.uk/register/) under reference 440703 and 440718.

Hays Financial Centre Ltd. Registered office: 325 Baring Road, London SE12 0DZ

Hays Financial Centre Ltd is registered in England and Wales 6810896

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.