Buying to let can provide you with an income and may bring a return on your capital in the medium to long-term. However, economic change within the UK means demand for rented properties fluctuates, so you should do some research before deciding to enter the buy to let market. Our Mortgages explained PDF gives some basic tips on buying to let.
The tenancy agreement must be an assured shorthold tenancy for either six or twelve months. We use rental income to assess affordability and you do need to be employed/self-employed, resident in the UK and show that your finances are self-supporting. The rental income from the property must cover 135% of an interest only mortgage payment based on our stressed rate, currently 5.99%. We ask our valuer to assess the potential rental value of the property when carrying out the mortgage valuation. Each mortgage application is assessed on an individual basis. The property you are buying or refinancing will be used as security for the loan on a first charge basis.
This product is not regulated mortgage contract unless the tenant is a relative of the borrower.
Our Buy to let variable mortgage is available to you if you are looking to remortgage a let property. Applicants must own and occupy their main residence. Properties must be located in the following post code areas; AL, BA, BH, BN, BS, DT, EX, GL, GU, HA, HP, HR, KT, LU, MK, NN, OX, PO, RG, RH, SG, SL, SM, SN, SP, SO, TA, TW, UB, WD, WR. The maximum number of properties is 10. The mortgage term must be between 5 and 25 years. Minimum property value of £125,000.
We will also consider properties in London and the surrounding area in the following postcodes: WC, EC, E, SE, N, NW, W and SW. These postcodes are restricted to 60% LTV.
£50,000 (Min) - £500,000 (Max)
The loan must not exceed 75% of the property’s purchase price or valuation (the lower of the two).
Mortgage interest is charged on a daily basis.
Legal work is required when remortgaging a property to let. This legal work is carried out by a solicitor and is payable by you. We can use the same solicitors as you, providing there is a minimum of four Approved Managers/License Holders and they are registered on The Law Society website (www.lawsociety.org.uk).
Licensed conveyancers are also acceptable for residential business only. The conveyancer must be registered with the Council of Licensed Conveyancers and be in a firm with at least four Approved Managers/License Holders.
A valuation of the property and rental income assessment will be required to assess the security offered for the loan. We offer the choice of either a basic mortgage valuation, which is for us to assess security only, or a Home Buyer’s Report that will give you a more comprehensive guide to the condition of the property. It is payable in advance and cannot be refunded once the valuation has taken place (see our Mortgages explained PDF for full details). If you would like a full building survey, we will give you the names of some local surveyors who you can contact to give precise instructions and negotiate a price.
- Free legals
- Overpayments allowed
Where "free legals" apply, they are for remortgages only. The legal work will be carried out by Newbury Building Society using title insurance and the cost, which covers HM Land Registry fees, a title insurance premium and other disembursements will be paid by us. Title insurance is only available to applicants who are UK Nationals and resident in the UK at the time of completion. If for any reason the remortgage does not take place, you will need to pay any legal costs incurred (maximum £250). The "free legals" service does not include the legal work involved for registering unregistered land or transferring property from one person to another (the names and addresses of the borrowers must agree precisely with those held at HM Land Registry). If legal work is required in these areas, a solicitor will be required to act at your cost.
Maximum loan to value
Loan to Value (LTV) is the proportion of the value or price of the property (whichever is the lower) that you borrow on a mortgage. For example, a £150,000 mortgage on a house valued at £200,000 would mean a LTV of 75%.
The application fee can be added to the mortgage and is refundable if the mortgage does not take place. If you add the application fee to your mortgage, this increases the amount you borrow and will also increase your monthly payments.
A Mortgage Exit Administration Fee (MEAF) applies when you repay your mortgage. Please see our Tariff of charges leaflet and your Key Facts Illustration (KFI) for details.
This mortgage is portable. This means that if you sell your rented property within the early repayment charge period and take out another mortgage on the same terms and for the same amount (or more) on another property, we will waive the early repayment charge and carry it over to the new mortgage (providing the terms and status are acceptable). If the loan amount is lower, there may be a charge based on the difference between the old and the new amount.
Charges applying to the ongoing administration of your Buy to let mortgage are detailed in our Tariff of charges PDF, which you will be given before your mortgage completes.
WE HAVE NO CURRENT PLANS TO WITHDRAW THIS PRODUCT BUT IT MAY BE WITHDRAWN WITHOUT NOTICE
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE