Buy to Let Mortgages

Expert advice for landlords

Buy to Let Mortgages for Landlords are becoming increasingly more popular but also more complicated. Each lender has specific criteria relating to the type of property and type of Landlord they are willing to lend to. We have an in-depth knowledge of these lenders and keep up to date with continuous criteria changes. We can use our expertise to find you the lender to suit your requirements.

With access to the vast majority of lenders along with established relationships, our team of Surrey mortgage brokers are best placed to find the right Buy to Let mortgage for your individual circumstances. 

If you are a landlord or you are looking to purchase your first buy to let contact us now to make an initial telephone or face to face appointment.

 

Our Quick Guide to Tax on Buy to Let properties

Over the last few years we have noticed an increase in people investing in rental property.  Despite the regulatory changes on Buy to Let properties, the fact of the matter is that the population is growing, property prices in certain regions continue to rise and the demand for homes to rent is outstripping supply, good news for Landlords! 

Renting property can provide a decent income, especially for portfolio landlords.  It’s important that the income is treated in the same way as any other income and declared to HMRC.

HMRC website states:

The first £1,000 of your income from property rental is tax-free. This is your ‘property allowance’. Contact HMRC if your income from property rental is between £1,000 and £2,500 a year.

You must report it on a Self Assessment tax return if it’s:
·       £2,500 to £9,999 after allowable expenses
·       £10,000 or more before allowable expenses
If you do not usually send a tax return, you need to register by 5 October following the tax year you had rental income.

Based on the above, if you are a Landlord and receive in excess of £835 gross rent each month, you should be declaring your income to HMRC.

Mortgage Interest Tax Relief and declaring income

Allowable expenses include day to day expenses for the upkeep and maintenance of the property, such as professional fees, insurance, maintenance, service charges etc.  Full details can be found on the HMRC website https://www.gov.uk/renting-out-a-property/paying-tax

The changes to mortgage interest tax relief have been phased in since 2016 and from this year Landlords will no longer be able to deduct their mortgage interest payment from the rental income, instead a basic rate tax reduction will be applied.

Lenders take a very serious view on established Landlords who fail to declare their rental income.  If you have owned a property for more than 12 months and earn over the £10,000 threshold in rent, lenders will expect to see the tax paid on this income.

Lenders work closely with HMRC to validate income declared and income not declared. If a lender discovers income has not been declared they are within their rights to report this to HMRC.

If you become aware that you should have been paying tax on rental income, you can contact HMRC to discuss your options.  It’s better you contact them than they find you!  Alternatively, speak to an Accountant for guidance.

Mortgage requirements

Absolutely Mortgages will now require the following documents as standard on all Buy to Let applications:

1. Tenancy agreement (for remortgages)
2. Bank statement evidencing rent received (remortgages and existing landlords)
3. Tax calculations and overviews evidencing rental income declared and tax paid (for remortgages and existing landlords)
4.  Proof of other income (if applicable) Please contact us if you wish to discuss this or any other mortgage related query.

Can we help?

With access to the vast majority of lenders along with established relationships, our team of mortgage brokers are best placed to find the right Buy to Let mortgage for your individual circumstances.