Purchase Guide

When purchasing a Buy to Let property for the first time you would normally need to be a current property owner.  A couple of lenders so allow a Buy to Let for first time buyers also.

To outline some key points when purchasing a Buy to Let property:

  • Deposit - Generally speaking, a deposit of 20-25% is required.
  • Minimum Income – most lenders require a personal income as part of their criteria.
  • Stamp Duty Land Tax – will be payable at the higher rate in most instances
  • Mortgage Agreement in Principle – Most estate agents will require proof of this in the form of certificate which we will organise for you.
  • Mortgage Property Valuation – this is required by the lenders to assess the value and anticipated rental income of the proposed property. 
  • Rental Income – most lending is based upon the rental income achieved/expected. 
  • Personal Income – can also be used to enhance the borrowing if the rental income is low.  This is becoming increasingly important in the London market to maximise borrowing.
  • Auction Properties – this can be done but note of caution the property must be in a lettable condition based upon the mortgage valuers comments.  Normally a 10% deposit has to be paid and completion within 1 month, unless the mortgage is granted the deposit is at risk.  Many landlords will buy with cash at auctions and refinance several months later.
  • Bridging finance – this can be utilised if you need to buy quickly at auction and the property is in a condition where it cannot be let immediately.  The idea is to use the bridging finance whilst the property is refurbished to a standard that it can be let, we would then replace this finance with a conventional Buy to Let mortgage.