The buy2let store reviews investing in residential property as one of the best sources of regular income. Many people prefer to invest in the UK buy-to-let property market rather than risk their money investing in the stock market.
This move usually pays off for buyers as they make a certain amount of money/income on a monthly basis. But the amount of money you receive is limited and very small. Therefore, most likely, you will not like this fact. In such a situation, you would like to find a new way to turn your buy to rent for sale property in London into a money making machine.
In addition to this, being a buyer, you will also need to know the following points in detail:
• Best practices for owners/investors to use their income to overcome the new buy-to-let rules
• How landlords can avoid the implications of the “Hidden Mansion Tax” likely to hit buy-to-let investors.
• The process of converting properties from purchase to rental for sale into vacation stays for short-term tourists.
• The possible consequences of the “Hidden Mansion Tax” and the conversion of the buy-to-let property into a short-term vacation rental.
Honestly, it will not be easy to talk about these four points in a single article. That’s why we’ve decided to launch a series of articles to help you turn your buy-to-let residential property into a source of income.
Let’s start with the discussion on the first point below:
Best practices for landlords/investors to use their income to overcome the new buy-to-let rules?
Now, the Bank of England has introduced strict rules on rent-to-purchase lending. Real estate investment agents in London are of the opinion that these rules are to help owners who own multiple properties. These new rules on rent-to-own loans will help such owners to use their salary, investment income and pension income to obtain a mortgage to buy investment property in London.
All credit goes to the PRA (Prudential Regulation Authority) of the Bank of England. Owners who own at least four or more buy-to-let properties will now have to comply with these new rules. This process initiated by the Bank of England is known as Affordability Testing.
• Real estate investment agents in London strongly advise owners. Lenders or lending institutions to see how this affordability test really works.
• Private lenders and lending institutions will now have to take a closer look at the affordability level of investors applying for a mortgage. Additionally, it will also be mandatory to evaluate the interest coverage ratios in detail.
• Some banks have started using a system called “top slicing”. This is good news for homeowners who are ready to buy high-value investment properties in London that offer low returns. It is a good way for investors to use EPI (External Personal Income) to make up any shortfall.
Now here are some very important questions:
• Are the best slicing deals available throughout England/UK?
• Which lenders use Top Slicing when doing their affordability calculations?
• How did private lenders or other lenders react to the changes made to the PRA?
• What will be the buy-to-let criteria for owners?
• Will the choice of owners be reduced?
• Which lenders do not accept applications from portfolio lenders?
