Why are many now considering a buy-to-let mortgage?

18/06/2015

Growing house prices, low interest rates and the new changes to pensions have lead to an increasing number of people to consider buy-to-let as an investment option. Here are some of the reasons why many think that now is a great time to invest.

According to HomeLet’s latest rental index, in the first quarter of 2015 average rental values increased in 11 out of 12 regions in the UK. They also reported that the average UK rent for tenancies has risen 10.5% between the first quarters of 2014 and 2015, allowing landlords to benefit from higher returns.

Due to the recent boost in the buy-to-let market, increased competition with lenders means that it is now becoming easier for prospective tenants to secure a mortgage. Increasing numbers of mortgage brokers no longer subject buy to let applicants to the same rigorous regulations as residential mortgage seekers, and in most cases a 25% deposit will give buyers access to the majority of lenders.

Let’s not forget that buy-to-let mortgages also have tax advantages. Landlords can claim tax deductible costs from allowable expenses, including mortgage interest, letting fees, insurance and maintenance costs, which can significantly reduce their HMRC bill.

For help and advice on becoming a buy to let landlord, please contact WMT’s Tax Partner, Anne-Maree Dunn.