Buy To Let Set To Become A Booming Business Yet Again
The recent rate cuts by Barclays has seen a significant shift in the cost of having a buy to let mortgage, as these mortgages benefited the most from these cuts. According to Mortgage Strategy, a two-year fixed-rate buy to let loan at 60% loan to value, will see a rate cut from 2.28% to 2.21%. This is for loan amounts up to £1 million. The rate cut is welcoming to those who consider property investment as a form of income, especially amidst the tumult caused by Brexit. While property prices are already feeling the effects, it’s up to entrepreneurs to make the most of the cost-savings as becoming a landlord is a viable source of income once again.
A Potential Source Of Income For Retirees
A study revealed that the property investor is getting older, as over 55s account for nearly 40% of buy-to-let property purchases. For pensioners, properties provide a sense of security as there is the option to rent it out in order to generate an additional income or sell it when they need to. There is a caveat, however, and that is that a turn in the market could see them losing out, where investing their money in other investments might have been a better option. There is also the risk that a tenant may not pay their rent, which can end up costing the landlord a lot of money, especially if they have a mortgage to pay. However, an investment property that works well is one of the best boons to a financially secure retirement.
An Additional Source Of Income
If you happen to own an existing property, have a good credit history, and want to earn additional income on the side as a buy to let owner, you may be eligible for a buy to let mortgage. Self-certification buy to let mortgages are ideal for those who wish to earn an income from their property investments, but wouldn’t ordinarily qualify as they may not earn an income big enough to warrant the loan. For housewives and stay at home parents who are already property owners, this a fitting choice. Buy to let properties are also suitable for those who wish to supplement a shortfall in their income. While it may require an initial investment in terms of covering the fees and paying a deposit, after the first few years, investors tend to make a return on their investment.
A Rising Tenant Market
One of the biggest concerns for a property investor is that they might end up with a vacant property. This is not only bad for income, but also creates risk in terms of squatters and vandals. The UK, however, has a housing crisis and there are far more tenants than properties. This places landlords in a position where they can get fair value for their property, and also have a choice of tenants to rent their properties to.
Would-be landlords should consider the merits of owning a buy to let property, especially now that rates and regulations are starting to ease up.
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