September 11, 2015

How much deposit for Buy To Let

How much deposit for a buy to let property?

We’ve seen more competition in the buy to let market with lenders keen to pick up business from a sector that now accounts for more than 20% of all new mortgages in the UK. Whilst initially the competition was mainly on price at the lower loan to value end of the spectrum, we have started to see lenders improve criteria to encourage business, which should make it easier for people looking to invest in property.

Whereas previously it was pretty much set in stone that you’d need at least a 25% deposit, there are now options available for investors with a 20% or even 15% deposit. The rates and fees can, however, be quite high and the qualifying criteria a bit tighter than for those with a larger deposit. It’s also worth pointing out that the rental requirements for these deals tend to be higher than the options at 60% and 75%.

Undoubtedly this increased availability, in what is a very busy sector of the market, is good news for those looking to invest in property; reducing the deposit needed can allow potential landlords to potentially purchase 2 properties rather than 1 and build portfolios more quickly.

It’s worth pointing out that in some cases obtaining a buy to let mortgage can still be difficult, particularly for any first time buyers or those who don’t currently own a residential property. In addition certain types of property can be more difficult to finance such as flats over shops and HMOs (house in multiple occupation). However, as we see criteria improving, it’s not unforeseeable that more options will become available to those currently on the fringes.

 

Guild Mortgage Service, Provided by London & Country Mortgages

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The FCA does not regulate most buy to let mortgages