Buy-to-let
Summary
Buy To Let is a proven way to build up a property portfolio and more and more people are investing in Buy-to let property. The potential growth in this market is indicated by the following statistics from the Association of Rental Letting Agents (ARLA) who expects that the private rental sector will grow from its current level of around 11% of the housing market, up to 20% by the year 2020.
Further Information
As more people Buy to Let there will be more property available for letting.
Consideration could be given to leasing out the property. These schemes offer the opportunity for privately owned properties to be leased to Housing Associations or Councils for a number of years, so a landlord can:
The things to consider when Buying To Let are:
Sourcing your Property for Private Sector Leasing
As a general guide properties that are most in demand are two and three bedroom houses, although larger properties are sometimes required. Other properties that may be of interest are one and two bedroom self-contained flats, preferably in small blocks that are suitable for single people and couples as well as bungalows, particularly where they are adapted for disabled people.
Properties should be easily accessible and close to amenities such as schools, shops, health facilities and transportation links. Properties in villages will be considered.
The property should be of a reasonable standard and meet the criteria for leasing and safety standards (downloads below)
Before buying a property to let that you are considering offering up for leasing it is best to check with the operators of the Leasing Scheme that the property is suitable for such a Scheme.
Sourcing your Finance
Building societies, banks, financial management consultants and some private developers are offering finance for Buy to Let properties. These can be sourced from the internet, by telephone or a walk down the high street of most towns.
If considering this type of arrangement then make sure that the mortgage company would agree to the property being leased out as evidence of permission will be required.
Insuring your Property
When looking at insurance for the property it is worth considering bespoke landlord insurance that will cover your investment against damp, dry rot, and ceiling collapse.
If your flat is in a purpose-built rental block, the chances are your service charge will already cover landlord insurance: check with the managing agent if you are unsure. A general block insurance will not cover contents cover. Ordinary household insurance is not enough, and any claims made on such a policy may be rejected by a loss adjuster. You should be sure what your insurance covers as there is a huge range. There are specialised policies that provide insurance cover for things like your boiler blowing up. To find the best insurance you might like to speak to a specialist broker or speak to people at a landlords association.
Consider who will manage your property
Whoever you choose to manage your property will be willing to discuss the proposal with you. You may be required to fill in an application form.
There are a number of Schemes around offering different repairing obligations, risk and financial options.
Downloads
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External Links
More information can be found at the following websites:
Association of Residential Lettings Agents - Sponsor a Buy to Let Scheme.
- There is also a good report on Buy To Let by Michael Ball Professor of Urban and Property Economics at University of reading Business School that makes interesting reading on this website
Times Online - Buy to Let Advice
National Federation of Residential Landlords
Build to Let