20-11-2014

Fox Davidson – Buy to Let Mortgage Broker Bristol

A report on the Bristol Buy to Let market.

Are you thinking of investing in a Buy to Let property in Bristol?

Bristol has long been a popular option for the Buy to Let investor.  An ever transient student population and large workforce of young professionals unable to get on the property ladder means that the city’s diverse range of properties from new build to Victorian mansion block remain a hot ticket for would be investors.  Continuing increases in potential income – the ONS reports a 1 per cent increase in the cost of rents in the past year – are also providing an incentive to those new to the market.  The planned improvements in the city’s transport links with London and the continued development particularly in the south of the city means that its popularity is unlikely to wane anytime soon.   In addition rental yields in Bristol are higher than in London and make Bristol a very attractive investment. So, with Bristol remaining a pretty steady option – what do you need to consider if you are entering the buy to let market for the first time?

  • Stick to what you know: Accepted wisdom, particularly for those new to the buy to let arena is to stick to what you know. Buying in an area you are familiar with is important both in terms of getting value for money and for understanding your potential rental market
  • Identify your tenants: Similarly having a clear idea of who you want to rent to – e.g. students, young professionals, families will help shape your search.
  • Understand your responsibilities: Different legislation/guidance /products available depending on your circumstances and type of rental e.g. Letting a property to multiple tenants may constitute a House of Multiple Occupation which brings with it increased regulation and requirements for the property, each local council has different rules on what is and isn’t considered a licensed House of Multiple Occupation.
  • Parent’s beware: Under present legislation lenders will not give mortgages to those buying a property for a family member to live in, including those looking to buy a property for their child to live in – under the MMR this is deemed a regulated Buy to Let and as such lenders will tell you they don’t offer this finance, although we know a few lenders that will allow this, ask us for more details!
  • Accidental landlord: That’s the industry term given to property owners who make the decision to rent out their existing residential property – whether because of relocation, moving in with a new partner or being unable to sell – rather than someone buying an investment property purely for income. ‘Accidental Landlords’ will be those who are new to renting a property and the concern is that the accidental landlord will not be fully prepared for what owning and managing a Buy to let can entail. Is the accidental landlord prepared for rental voids, do they have the correct landlords insurance in place, have they set aside money for essential repairs?
  • Find the right mortgage: It’s a tricky area and obviously one where advice is key. We offer the best buy to let mortgages in Bristol. You need to consider; Interest only or capital and interest? Are you buying for income or capital gains or both? How long will you hold on to the investment property? Do you need your mortgage payments to be fixed and if so for how long? All of these questions form part of a mortgage broker’s fact find that will ensure the mortgage advice and recommendation provided to you matches your requirements and your situation. You also need to consider lenders fees and charges to ensure you get the right product that is cost effective over the chosen term.

Although Buy to let in Bristol is a great market think long and hard about the reasons why you are buying to let, or renting out your existing property. It’s a commitment as well as a financial investment.

Getting the right advice is vital.

Contact Fox Davidson on 0117 989 7950 or email enquiry@foxdavidson.co.uk