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There is no doubt about it, the buy-to-let mortgage market is in the doldrums – so you all the help you can get if you are to secure further buy-to-let finance.

At the peak of the buy-to-let market there were literally thousands of buy-to-let mortgages in all shapes and sizes – mortgages that needed no proof of rental income, offset buy-to-let, buy-to-let for those with adverse credit, buy-to-let that needed no equity and buy-to-let for the self employed.

But that's all changed. Since the credit crunch most buy-to-let have either cut their mortgage products to nearly zero or have left the market completely .

So now there are only a few lenders who are willing to lend buy-to-let mortgages. Of course, because there is no competition in the market, the lenders are able to be very selective in who they offer credit to and how much they give. Because they have the pick of the market they can effectively cap the mortgages themselves so only the best borrowers get hold of credit.

Not only that, but they will demand documentation that proves without doubt that you have what it takes to be a landlord and manage a property. They will want to see past accounts, credit scores and even letters from accountants – anything to give them 100% assurance that you will be able to pay them each and every month.

So you need a professional buy-to-let mortgage adviser to hold your hand through every step of the process. They will be able to tell as and when it's best to borrow, how much you should borrow ad who you need to go to to get the mortgage. They will tell you what to apply with, what to say and who to say it to – a buy-to-let is the indispensable guide that every landlord needs in 2009 to have any chance of getting hold of the right mortgage.

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Residential landlords are leaving themselves at risk by failing to take out the right insurance products for their property business.

Redbrick, a buy to let insurer, found that only two thirds of landlords have specialist buildings cover for their buy to let investments, whilst only 12% have combined legal expenses and rent guarantee insurance, even though 71% of landlords expect tenant arrears to increase in 2009.

Tony Armitage, insurance director of Redbrick Landlords says: "Landlords need to carefully consider their insurance needs and ensure that they are properly protected. It is amazing that only two thirds of landlords have specialist buildings insurance, with the other third presumably having a standard household policy or, worryingly, no insurance at all."

Redbrick says tenant arrears are on the increase in the recession and landlords can easily cover themselves for rent arrears through a rent guarantee insurance product, which also includes the legal expenses involved in evicting the tenant. But Armitage warns that there appears to be a lack of awareness about the availability of these products and in the current environment landlords should be doing all they can to protect themselves.

He adds: "Buy-to-let landlords have sophisticated insurance requirements for which a typical household policy is often unsuitable. The biggest irony is that some landlords are actually paying through the nose for potentially unsuitable cover."

If you don't think you have the right buy to let cover, you probably haven't got the right cover. Talk to a buy to let mortgage adviser bout which insurance you need for your specialist area. Buy to let can be a very profitable venture, but without the right cover, it can end up being a nightmare.

SOURCE: Paragon, 03/08/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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You might be a successful buy to landlord and you might be making plenty of money from your investment – but are you sure that you are making the most of your buy to let options?

You might have had your mortgage for a few years now, and although you are comfortable paying the interest each month, are you sure that there isn't a mortgage out there that's even cheaper? Interest rates are as low as they have ever been right now, so you may find that there is a mortgage out there that could save you hundreds of pounds every month.

And what about your profits? Are you making the most of what you make from your tenants? Have you explored all your investment options? Have you got savings accounts? Do you think you could afford another rental property? Do you know how much you could save by offsetting your profits against your mortgage?

Also, you might be a successful buy to let investor, but are you protected? Event he best could be hit by accidents and unforeseen problems – if you are not covered for accidents, illness, injury or even missing rent then you may find that you could be the victim of huge losses in the future.

However much money you are making, and however many properties you may have, there is no harm in reassessing your buy to let options with a mortgage adviser. They will be able to look at your current situation and see where you could be making more savings and more profits. So call your adviser today to make sure that you are not missing out.

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Landlords have been reminded that even if their tenants do not care what energy performance their property achieves, they still need to make sure they have their Energy Performance Certificate up to date.

The National Landlords Association has revealed that landlords all over the UK are questioning the need for EPCs as tenants are ignoring the information they contain.

By law, most tenancies in England and Wales are required to have an EPC. This details the energy efficiency of a property, giving a standard energy and carbon emission efficiency grade from ‘A’ to ‘G’, with ‘A’ as the most efficient.

However, the NLA says EPCs are often at the bottom of tenants’ lists of requirements, if there at all. Many tenants are unaware of the law, and even if a property receives a low grade, it does not seem to affect whether a tenant will want to live in a property.

Sussanne Chambers, director of the NLA, says: “It seems many landlords are left wondering about the effectiveness of an EPC. What has become apparent is that tenants don’t seem to be interested in them, or use them as a deciding factor in choosing a rental property. As always, it is the responsible landlords who have commissioned EPCs and for whom they are now part and parcel of their lettings business.”

There is a lot of red tape to get through if you are a landlord, but make sure you adhere to the letter of the law. One form out of place or one document misplaced may mean a fine or even legal proceedings. Being a landlord is a full time job, and must be approached as one – anyone who thinks they can make money and not take the time to do their job properly is mistaken.

SOURCE: NLA, 30/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Nearly one in 10 landlords has purchased buy-to-let property in 2009 – proving that there is still life in the industry and there are still opportunities to get hold of buy to let mortgage finance.

According to the latest survey by Paragon Mortgages, the buy to let sector is on the up – as well as more people investing in property, the amount being made by landlords has also increased over the last three months – the average yield across landlords’ portfolios rose from 6.2% in the first three months of 2009 to 6.4% in the second quarter of the year.

This is leading landlords to become a little more bullish about their future. The survey found that 30% of landlords predict that tenant demand will rise over the next 12 months. This is no surprise as more people struggle to afford to get onto the housing ladder.

However, it's not just first-time buyers who are unable to get hold of the mortgages that they need – 43% of landlords state that a lack of mortgage finance is the main obstacle to expanding their property portfolio.

John Heron, managing director of Paragon Mortgages says: "Landlords are telling us that they want to buy new property because they recognise that yields are increasing, but the lack of available finance in the buy to let mortgage market is making it difficult. Until more is done to increase lenders’ access to funding, we could see the private rented sector enter into a period of stagnation because landlords are struggling to buy."

It is hard to find mortgage credit right now, but your best hope is to talk to a mortgage broker. A broker still has the tools and the knowledge to search the whole of the market and find a deal that can work. The market is smaller and the lenders are demanding much more from borrowers but if anyone can get you a buy to let mortgage, it's a mortgage broker.

SOURCE: Paragon, 27/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Many more parents are now considering taking out a buy to let mortgage so as to give their children a home during this downturn.

It's almost impossible for first-time buyers to get on the property ladder today – recent data from Moneysupermarket.com says first-timers need to have raised, on average, £32,000 to be able to secure a home. So parents are doing all they can to help their kids find a property, however they can.

An option that is growing in popularity is for parents to take out a buy to let mortgage on a property and then allow their children to become tenants. This allows their kids to have a cheap home and space to save, but it also allows the parents to invest their money sensibly.

Also, once the children are able to stand on their own two feet, the property can be let to other renters for a healthy profit. While pensions and funds remain in the doldrums, buy to let continues to make millions of landlords in the UK healthy profits.

Because property still is a viable option for investment. Although it will not promise instant rewards and massive incentives like it did in the past, it will yield profits over the long-term if it is planned carefully.

So if you think renting a property to your children could be a shrewd investment, talk to a mortgage broker right away. It might be that there are other things you can do to help your children, or it might just be the investment you have been looking for – one that will help your children and one that will make the most of your money.

SOURCE: Moneysupermarket.com, 17/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Average UK rents rose for a second consecutive month in June according to Your Move, giving landlords some more hope as they look to manage their buy to let loans in this downturn.

The letting agent recorded a huge 11.3% fall between August 2008 and April 2009, in which average rents declined from £717 to £636 per month, but it says rent levels are now recovering. In June 2009, rents rose 0.3% to a UK average of £641 per month – having grown 0.5% in May.

Of course, rising rent comes after rising demand, and there is certainly more demand – overall, Right Move found the number of new tenants registering to rent soared 18% in the past year. More people are finding it impossible to get hold of mortgage credit, so have had to resort to renting.

David Newnes, managing director of Your Move, says: “Since last summer rents have been forced down by a huge increase in the supply of stock on the lettings market. This was largely a consequence of a surge in the number of accidental landlords unable to sell and making their homes available to rent. However, a rapid rise in demand from tenants in May and June has helped redress the balance and stopped the downward pressure on rents."

Rents in London have fallen more sharply than in almost any other region in the past year, down 7.1% since June 2008, but the capital is now recovering fastest. Average London rents rose 1.2% in June 2009 over May, rising from £857 to £868 per month. The biggest drop in rents was evident in the North West in June – down 3.2% compared to May, from £487 to £471 per month.

Newnes says: “Rents in London have plummeted since last summer as demand from tenants has been hit by redundancies and falling number of overseas workers coming to the capital. But the London rental market is resilient and rents are starting to rise again."

But Right Move warns that the recovery may not be as strong in the South West of the country, where rents have fallen fastest in the past twelve months. It says the region is home to a large number of second homes, more of which have made available for rent by homeowners looking to boost their incomes.

SOURCE: YourMove, 22/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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The Government may soon allow HM Revenue & Customs to demand the details of all landlords on letting agents’ books in an attempt to curb tax evasion.

These proposed powers would allow HMRC to force lettings agents to hand over the names and addresses of all landlords that they take care of. This would means the HMRC could identify those who are paying tax on property income, and more importantly those who are not.

Tim Gregory, partner at accountancy firm Saffery Champness says: “These latest proposals are the next step in what seems to be a determined effort by HMRC to stamp out illegal tax dodging, and comes on the back of similar powers to obtain financial information from certain banks about their customers.

“Properly-advised taxpayers have nothing to fear from these proposals, as they will already be on the right side of the law. Anyone who has mistakenly believed that their rental income was not taxable, or over-claimed expenses in relation to their rental business, would be best-advised to volunteer their under-declared income and pay the tax: this is likely to minimise any penalties that might become payable.”

There is some good news though – Gregory says many landlords may find that the tax they should be paying is not nearly as much as they thought, as landlords have many tax loopholes they can exploit – for example, those that are renting out a room in their own home can claim rent-a-room relief and for properties that are let out in full, mortgage interest can often reduce the taxable rent.

He says: “Any financial downturn brings with it a greater focus on making a few extra pounds wherever possible – people should avoid the temptation to do that illegally whether by tax evasion or otherwise. The last thing you want is to fear a knock on your door.”

Peter Bolton King, chief executive of the Association of Residential Letting Agents, says: “There are vast numbers of landlords that use an agent to find a tenant in a ‘let-only’ arrangement. While this push by HMRC has the potential to catch a lot more landlords out, it will also create a lot more work for agents in terms of their record-keeping.”

SOURCE: ARLA, HMRC, Saffery Champness, 15/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Yields in the private rented sector have continued to strengthen as landlords experience growing levels of tenant demand.

Paragon Mortgages' survey of experienced landlords showed that average yields rose to 6.4% in the second quarter of 2009, up from 6.2% in the first quarter. This is the second successive quarter that yields have risen after a lengthy period of stagnation.

The rental yield, which is the property's rental income as a percentage of its current value, is an important factor in landlords' purchasing decisions as it generates cashflow, allowing them to meet mortgage repayments and other expenses relating to their property.

Landlords in the Midlands achieved the strongest yield at 7.4%, followed by those across the North of the UK, but most landlords continue to experience strong levels of tenant demand and believe that demand will continue to increase in the coming year – nearly a third of those landlords surveyed predicted tenant demand will increase. This means that there is a lot more scope for rental increases over the coming year.

John Heron, managing director of Paragon Mortgages says: "Landlords have enjoyed increased levels of tenant demand throughout 2008 and 2009 and it looks like that will continue into 2010. A lack of available mortgage finance makes it difficult for potential homeowners to purchase property and many people remain unwilling to commit to purchasing a home in the current house price environment.

"In addition, landlords continue to experience strong demand from those sectors of the population that have historically driven the growth of the private rented sector, such as students, migrant workers and young, mobile professionals. In some markets, this is feeding through to rental increases, allowing landlords to improve the yield on their property.

"A strong yield level will continue to attract investors to the private rented sector, particularly as the returns from savings accounts are poor and the stock market remains volatile."

SOURCE: Paragon, 14/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog

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Landlords up and down the country are celebrating this week after a landmark case against Foxtons made excessive letting agent charges illegal.

The judge overturned several clauses in Foxtons' contracts with landlords, including using terms that require a landlord to pay substantial sums in commission, where a tenant continues to occupy the property after the initial fixed period of the tenancy has expired – even if Foxtons plays no part in persuading the tenant to stay, and does not collect the rent or manage the property. Also where it requires a landlord to pay commission to Foxtons even after it had sold the property.

So from now, any letting agent must be completely fair and transparent with any fees, commissions or renewals.

The Office of Fair Trading has said it "expects the letting industry to comply with this ruling, and will take the necessary steps to ensure this where appropriate." It went on to say that "the charging of repeat renewal commission represented a ‘trap' or a ‘timebomb' for consumers."

John Socha, vice chairman of the National Landlords Association says: "This sends a direct message to letting agents that this lack of transparency must stop. Contracts must be clear with provisions which are upfront and ‘plain and intelligible'. This ruling is most definitely a victory for landlords throughout the country."

Keshav Thukaram, managing director of Smartlandlord.co.uk, says: "Charging landlords renewal fees for existing tenancy agreements where the letting agent plays no part in persuading the tenant to stay, collecting the rent or managing the property is outrageous and a legal ban was long overdue.

"We are not saying that all letting agent fees are always unfair, but they must be clearly stated and transparent and only apply for services from which a landlord clearly benefits.

"Luckily landlords are increasingly waking up to the fact that they can save thousands of pounds by taking a DIY approach to managing their portfolio."

SOURCE: Smartlandlord.co.uk, NLA, OFT, 10/07/09

To keep up with the latest News and comment on the UK buy to let market visit the Buy to Let Mortgage Blog