This page contains information about Buy To Let. If you would like to find out why Cambridgeshire is ideal place to invest in property please contact us.

:: What is Buy-to-Let?
Buy-to-Let is a joint initiative by the Association of Residential Letting Agents (ARLA), and the mortgage lenders. The scheme is designed to help private individuals to invest in property to let without being penalised by mortgage surcharges or paying commercial rates of interest. Mortgage lenders in the Buy-to Let scheme will take account of rental income likely to be achieved from a property.

It is a system that enables private individuals to invest in property to let. In the past borrowing on income-producing property has been viewed by lenders as a commercial proposition, and so subject to higher rates of interest. The Association of Residential Letting Agents (ARLA), and the mortgage lenders worked together to create a system by which private individuals could invest in property to let, that takes into account likely rental incomes and reduces mortgage surcharges and rates of interest.

:: What are the returns and costs from letting property?
Rent is received. As well as mortgage costs you need to take into account the cost of letting such as -

• management fees
• maintenance
• service charges
• ground rents and insurance

This can be as high as 8% to 10% of the rental income. The average rental return in Britain is around the 6% mark, plus capital appreciation is likely to match, if not exceed, inflation.

The ideal situation is that the monthly rental covers or exceeds the monthly mortgage repayments and running costs related to the property.

:: What does a Letting Agent do?
Mortgage lenders look more positively on the deal when an ARLA member agent has been advising on the selection of properties suitable for letting, as buying a rental property is different to buying a home. Use their knowledge of the local market, and how it influences the rental market. Consider demand for size of houses or flats, for properties close to schools or transport links or secluded properties with gardens, or even the standard of decoration, furnishing, fixtures and fittings expected and legally required by the rental market.

A good letting agent will also handle the selection of well vetted tenants, checking that they pay their rent on time and leave the property in a proper state. They can also run the day to day management of the tenancy. Knowing that you are using a professional agent reduces the risk and enhances the creditworthiness of Buy-Let propositions put to mortgage lenders.

:: How to Buy-to-Let
Research the investment and the area you are considering getting advice from local experts especially ARLA letting agents like ourselves.
Next step is to find the property. You can do theproperty search yourself; or a letting agent may help by instructing their own sales department or work with the best estate agents in the area.

Once a property has been found you need to confirm whether or not it has letting potential, and the range of the likely rent that can be achieved in current local market conditions. You need to evaluate what needs to be done to the property to make it rentable, looking at both aesthetic and legal requirements. You want to attract good tenants and to reduce the risk of lengthy void periods.

Next you complete the purchase, raising a Buy-to-Let mortgage.

On completion you get the property ready and tenants in as soon as possible, working with an agent can make this process a lot smoother.

:: How are Buy-to-Let mortgages arranged?
There is little difference to organising a standard mortgage for owner-occupation. Buy-to-Let mortgages are subject to the usual status checks. Repayment terms of between five and 45 years can be arranged and for up to 80% of the value of the property. The biggest difference is that through the Buy-to-Let initiative, rents achievable from an investment property can be taken into account for repayments, as long as an ARLA member agent is to be responsible for letting and managing the property.