Thursday, February 02, 2017

An essential guide to buy-to-let finance

The UK buy-to-let market has grown quickly over the last 20 years with investors looking for long-term rental income streams. A shortage of rental properties across the UK has seen consistent demand for buy-to-let loans. However, there are a number of factors to consider:

1.    What is buy-to-let finance?
Buy-to-let investors main aims is to find a property which can create rental income streams not only to cover the cost of finance, but to also generate additional income to create capital growth opportunities for the future.
2.    What types of projects can you use buy-to-let finance on?

Due to the demand in the property market of the amount of help-to-buy loans, there are now a variety of projects on offer, these include; houses in multiple occupation, flats above commercial premises, flat conversations and new build developments.

3.    What are the benefits?

If a buy-to-let investment is structured correctly, then the rental income will cover finance costs and any additional expenditure on the property. In effect buy-to-let finance allows investors to build a long term rental income stream with the added possibility of capital appreciation in the future. Some things to be aware of are the recent tax changes in the buy-to-let market which mean a Stamp Duty Land Tax levy of 3% is applied to all buy-to-let property purchases.
While no investment market is risk-free the buy-to-let market is often considered to offer more security than most by investors. The reason being is that in effect tenants are repaying the finance used to acquire the property and in the long term hopefully increasing the equity of the investor.

4.    Finding the best buy-to-let loan?

Buy-to-let loan specialists such as are able to scour the market for the best deals available and have genuine expertise in this market. It is worth taking into account the specific details of each buy-to-let finance arrangement as there may be additional hidden charges such as exist fees. The Internet offers a number of comparison websites such as Money Supermarket to find the best loan deals and rates available.
Whatever your specific financial situation there will likely be a buy-to-let finance specialist on hand to give you advice, assistance and find the right package for you. You can ask questions directly to our financial experts by simply filling in BiG’s online webform.