UK Buy to Let Mortgage Ch.1 – Portfolio Landlord Financing
UK Buy to Let Mortgages
UK buy to let mortgage is a mortgage sold specifically to people who buy property as an investment, rather than as a place to live. Investing in property is generally well understood but a number of changes have happened within the last few years that have made this once simple product deceptively complicated.
New legislation that has created differences between borrowing as an individual or as a company, accidental landlords, portfolio landlords, PRA regulation relating to what rental a property has to generate to enable given levels of borrowing all conspire to make this a minefield, even for the experienced property investor.
Combined with this is a perfect storm of economic conditions; the low level of income generated by keeping money in the bank has led people to invest in property but with a desire to get as much money out of the property as possible.
With people naturally wanting to increase their “yield” (the amount the property generates) the market for more complex buy to lets such as –
HMOs (houses of multiple occupancy)
Holiday Lets
Air BnB
Serviced Accommodation
Properties over commercial buildings
Multi-unit properties
has ballooned, as has the desire to take a simple property and convert it into a higher yielding asset.
Financing Strategy for Buy-to-Let Investments
With nearly 2,000 types of UK buy-to-let mortgages available through major banks, building societies, and specialized lenders, UK Mortgage ONE is ideally positioned to help you secure the financing you need, whether you’re purchasing a simple buy-to-let property or acquiring a complex asset and converting it into a more sophisticated residential property, all with minimal stress.
10 Years of Professional Experience
Our UK network of brokers is directly regulated by the Financial Conduct Authority (FCA). They cover the entire market and have the capability to handle complex UK buy-to-let mortgage cases, including those from lenders who only accept introductions from FCA-regulated mortgage advisors.
When we assess your loan requirements, we don’t just search online. Instead, we leverage our 10 years of experience with UK buy-to-let mortgage products to ensure you secure the best and most suitable deals available.
UK Commercial Mortgages
UK Mortgage ONE has relationships with a wide range of commercial mortgage providers, from high street banks to specialist commercial lenders and private finance channels. With over 30 long-term lenders, we are confident in securing the best product for your UK buy-to-let mortgage needs.
We can arrange financing for first-time commercial investments, recently converted mixed-use properties, mortgages for properties housing your own business, a portfolio of small-value residential properties, and many “challenging cases.”
Additionally, we offer a broad range of UK buy-to-let mortgage products to support the following property types:
- Offices, warehouses, and industrial premises
- Commercial mortgages for care homes and children's nurseries
- Commercial mortgages for pubs, clubs, hotels, restaurants, cafés, and other licensed premises
- Commercial mortgages for leisure facilities, including fitness clubs, gyms, and leisure parks
- Farms, equestrian properties, and agricultural units
- Specialist buy-to-let mortgages for professional landlords, portfolio consolidation, and equity release
- Commercial mortgages for retail shops, semi-commercial properties, and takeaway outlets. (Please note, investment properties must be rented and income-generating at the time of purchase to qualify for a commercial mortgage.)
How Much Can I Borrow?
Typically, we can arrange commercial mortgages up to 75% of the purchase price or vacant possession value, though UK buy-to-let mortgages most commonly max out at 70%. Higher loan-to-value ratios usually come with higher interest rates. In some cases, we can even arrange higher loan amounts, such as for existing tenants purchasing the freehold of their business premises.
Commercial mortgages can be arranged on a fully amortized basis, interest-only, or a mix of part capital repayment and part interest-only, depending on your needs.
When assessing a loan facility, whether for an owner-occupier or an investor, the key factor is the “servicability” of the proposed facility based on the property itself.
For owner-occupiers, servicability is based on the profitability of the business. For commercial investments, it depends on the rental income generated by the tenants. Just as buy-to-let mortgage amounts are determined by rental income, the rent from commercial tenants dictates how much can be borrowed on a commercial property.
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What Information Do We Need
Throughout the process, we will work closely with you, offering the services of one of our highly qualified case managers to provide advice and help you select the UK buy-to-let mortgage product that best suits your needs. To provide an initial indication of what might be available, we will need the following information:
Business Owners
- Trading accounts for the last 2 years – complete and detailed accounts are required.
- Existing business borrowing commitments, including monthly repayment amounts, due dates, and whether there are plans to repay these loans as part of this proposal.
Commercial Investments
- Details of the current rental income of the target property.
- Information on the tenant, rent, lease expiration date, and whether the lease includes a break clause, and if so, when.
UK Buy-to-Let Mortgage FAQs
With years of experience in UK buy-to-let mortgages, UK Mortgage ONE has accumulated extensive market knowledge, so you can trust that you’re supported by one of the most experienced lending institutions in the industry. Our UK buy-to-let mortgage FAQ section covers all the essentials in a comprehensive “Mortgage Basics 101” guide.
Whether you’re becoming a landlord for the first time or you’re an experienced one, our lenders offer a variety of options designed to meet the needs of anyone looking to purchase a property to rent out. We also offer UK buy-to-let mortgages to expatriates living in the UK or overseas, though terms and conditions apply, and rental income must be denominated in British pounds (GBP). Additionally, you have the option to switch from variable to fixed-rate mortgages during any period of benefit without incurring early repayment charges.
Some UK buy-to-let mortgages are classified as “consumer buy-to-let.” Your specific situation will determine if you fall under this category, in which case the loan will become regulated. Our lenders treat all buy-to-let applications the same during the application process, regardless of their regulatory status.
Consumer buy-to-let mortgages are available through standard buy-to-let and rent-to-buy products. For most lenders, the regulated status of a consumer buy-to-let applies to: “A borrower with no other rental properties seeking a mortgage on a property they have inherited or previously lived in at any time, or that has been occupied by a related party.”
This means that the new status only applies to remortgage applications. If you are renting out any other properties at the time of application, you will not be considered a “consumer,” even if this definition applies to the property for which you are seeking a mortgage.
In principle, mortgage applications by non-UK residents are typically limited to a maximum of two borrowers.
UK Mortgage FAQs
Providing guidance for your property investment journey. We cover everything you need to know, from the application process and interest rate explanations to eligibility criteria.
UK Mortgage Pre-Approval
Curious to know if you qualify for a UK Buy-to-Let property mortgage? Simply answer a few questions and get an instant answer!
UK Buy-to-Let Mortgage - Chapter 2
This chapter explores various options for commercial property and development financing in the UK. It covers types of commercial real estate loans, development finance options, the financing process, and eligibility criteria.
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