FAQ’s for Buy-To-Let Investors

There is no maximum or minimum number of buy-to-lets that you can own. However, you should bear in mind the additional stamp duty which will be payable each time a property is purchased. Please note, this is in addition to your main residence or any other properties that you own, whether they are in the UK or anywhere else in the World. Find out more here.

In most cases, mortgage lenders will require a 25% deposit. However, it would be worth speaking with our recommended mortgage broker to check what options/products are available. We would recommend speaking to our friends at South West Mortgages.

Currently (September 2021), there is a 3% surcharge for stamp duty payable for investment properties or 2nd homes. We would recommend speaking to our recommended mortgage broker who will be able to confirm the amount of Stamp Duty Land Tax due on legal completion. Calculate Stamp Duty Land Tax here.

Many purpose-built apartments and conversion type apartments tend to be leasehold, meaning most mortgage lenders will be happy to lend, as long as the lease is of a healthy length (Most mortgage lenders won’t lend unless there are at least 70+ years left on a lease). A property with a lower lease could also prove to be a good investment if it can be purchased at a price point to reflect the cost of a lease extension, either as part of the purchase or in the future during ownership. The main benefit with leasehold properties is that more often than not, residents will pay a service charge meaning that most repairs to a building are covered.

With Freehold or Share of Freehold, there is often no service charge or management company, residents would be asked to contribute on an ad-hoc basis if repairs to the building were needed. For a freehold house, it would be entirely the responsibility of the sole owner to maintain the property.

Modernised homes typically rent out quicker than older ones. All new builds in the UK are covered by a 10-year home warranty and most developers will offer some sort of customer service warranty covering snagging defects for the first 6 months to 2 years. In the first two years, any faults that don’t meet the warranty provider’s technical requirements have to be corrected by the builder. After that, the 10-year warranty covers you against certain structural defects and smaller issues, such as the foundations, the roof & the double glazed windows. If you’re interested in buying a new build home, we have an experienced new homes team who can help you.

While older properties are likely to be cheaper, they may need money spent on them to get them into a rentable state. On the plus side, places that need improvement present you with an opportunity to renovate them cheaply and quickly to boost the value of your investment. Take a look at our properties for sale here.

We are finding that it has become more and more common that tenants do not have a car, therefore demand for properties even without parking is high. Swindon’s transport network is excellent and very well run with many different connections all over the town and beyond. Swindon is located in close proximity to major cities such as London, Bath, Bristol, Oxford and Reading and has prime train links, achieving a journey to London in as little as just 50 mins!

Most mortgage lenders advise that they will only consider applications from buyers, who have previously owned another property. However, we would recommend having a conversation with our recommended mortgage broker who would confirm your options – South West Mortgages.

Do the maths thoroughly before you start your search and work out what your monthly rental yield will be – that’s the income you’d make on a property expressed as a percentage of the building’s value. As a benchmark, 5% a year is considered a good rental yield. Your mortgage application will also consider affordability and whether you can keep up with mortgage payments while the property is empty. As a rule of thumb, it’s smart to budget for a buy-to-let property being empty for at least two months in any 12. Consider all costs, such as agent fees, stamp duty, repairs, etc., when working out the affordability.