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Understanding a Buy-to-Let Mortgage


With generation rent well and truly here those who have some money and want to invest may be looking to the property market. However, if you have never thought about it before it can be a little daunting knowing where to start, so here is a guide to a better understanding of what a buy to let mortgage is. At least then that is one less thing you have to worry about.

First things first, with the competition high for rental properties there is more profit to be made in the market, this is good news for landlords although it does mean that tenants are forced into the rental market for a lot longer. As a result make sure that when it does come to set your rental price it is fair for both parties whilst being in line with average rates across the local market.

What is a buy-to-let mortgage?

If you are a first time landlord then it is important to understand how a buy-to-let mortgage works; a buy-to-let mortgage is simply money offered by a lender, usually a bank or building society, which is then used to purchase a property that the owner will not be living in. The difference between applying for a buy-to-let mortgage or a residential mortgage is the way in which the income of the borrower is assessed. For a buy-to-let mortgage the potential rental income is taken into account although all lenders will have different ways of assessing this so it is important to compare deals. Continue reading

Getting to Know Your Neighbour

“That’s when good neighbours, become good friends.”

In the UK’s case however this isn’t so. The Australian TV show, Neighbours, would be seriously lacking in useful storylines if it were set in the UK. The most dialogue between two neighbours would be when they both step outside their front door and share an extremely awkward hello to each other. Gone are the days of mothers stood outside their front door, gossiping with a cup of tea in their grasp. Children going to their friend’s house across the street to play games and men sharing tools and banter over the garden fence. Now it takes the monarchy’s celebrations to bring neighbours together in the form of a street party.

(Lack of) Neighbourhood Connections

Research from revealed an astounding 13 million people do not know their neighbour’s name. 3.5 million people have no clue who their neighbours are and another 1.5 million actually feel threatened by their neighbours. These results come as a disappointment to many, including HM the Queen who called for everyone celebrating the Diamond Jubilee to see it as “an opportunity for people to come together in a spirit of neighbourliness and celebration of their own communities”.

Despite these results, the research found that one fifth of people would like to form some sort of relationship with their neighbours. However, 11 million people have had disagreements with their neighbours in the past five years, most verbal but some physical.

Landlords, Tenants & Neighbours

Landlords need to have good relationships with the neighbours of properties in their portfolios. Although they don’t live there, they are responsible for the people who do and they need to ensure their tenant’s behaviour is respectful of their neighbours, as it can reflect badly on them.

There are numerous cases of continuing animosity between neighbours leading to visits from the police and damage to a property and these results benefit no one. Having good property insurance can ensure your property has the appropriate protection from damage caused by tenants or neighbours. However despite this protection, it is worth thoroughly referencing prospective tenants in order to confidently determine their behaviour and tendencies.

Landlords should consider things such as how noisy a tenant is; if they have pets or children and the number of cars they need to park outside their home. These are the most common causes of neighbour disputes.

Benefits of Knowing Your Neighbour

Having a good relationship with the neighbours of your property can help you in the tenant selection process. You can choose tenants who you feel will fit in well with the neighbourhood and not cause trouble. You can also rely on the neighbours to keep you updated on any emergencies that may arise which involve your property or the surrounding area.

Commenting on the results, analyst Samantha Baden said, “Sellers have an obligation to disclose details of any complaints made against their neighbours to buyers – and this really can impact on your ability to sell a property. Millions of people in the UK would like to have a better relationship with their neighbours and occasions like this year’s Jubilee celebrations and the Olympics are the perfect opportunity to break the ice. Knowing that an area has a strong sense of community is a real pull factor for potential home buyers and it’s factors like these that help to drive up the price of a property.”

A good tenant makes life much easier

Although being a private residential landlord can never be described as a straightforward profession there are certain factors that can make life a lot easier to cope with. Simple things like good, cheap landlord insurance and a good tenant can make a world of difference.

At a time when landlords in the UK are experiencing one of the best periods for many years, it might seem surprising how highly valued a good tenant should be. Surely with the demand out there for good accommodation, as soon as you lose one tenant then another is clamouring at the door.

A good landlord recognises a good tenant

This may well be the attitude of a bad landlord, but a good professional landlord knows exactly what difference a good tenant can be. First of all the landlords knows that his income is secure, the tenant that pays up on time and without any fuss puts a smile on any landlords face. Secondly, having a good tenant installed in your property means you don’t have to worry about how the home is being treated. Good tenants are a great boost in this respect, although each and every landlord should have residential property insurance the less claims made on the policy then the cheaper it becomes over time to purchase insurance. A good tenant will cause a minimum of damage to the property but also alert the landlord if work needs to be done to keep the place in good condition.

Of course the relationship works both ways. Once a good tenant is ensconced in the property a landlord can invest in good modern facilities knowing that he is increasing the value of the home and it is being looked after.

Seal a deal

For these reasons landlords should consider tying a good tenant to a long lease, it means he will not be losing money from void periods in the changeover of tenants, he does not have to worry about how his property is being treated and need not worry about rent collection. He must remember though the value of these things, and therefore be prepared to make it worthwhile for the tenant to stop. It is well worthwhile offering an attractive rent to secure a good tenant on a long lease