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News
Scottish Property Prices and the EU Referendum – The Potential Implications
Scottish Property Prices and the EU Referendum – The Potential Implications The 23rd June marks an important event – the EU referendum. If you’re a seasoned property investor, or simply looking to move home in the future, it makes good sense to find out what will happen to property prices in Scotland if the UK […]
General, Guides
A Complete Guide to Buy-to-Let Mortgages
A Complete Guide to Buy-to-Let Mortgages If you want to become a landlord or develop a property portfolio, you’re likely to need a buy-to-let mortgage. These specialist mortgage deals are different to standard mortgages – and it’s important to understand the key differences. Here’s a useful guide to help you. Buy-to-Let Mortgages – What Are They? If you’re intending to buy a property with a view to letting it out, you’ll need a specialist mortgage. In fact, it’s illegal to purchase a property with a standard mortgage if you intend to generate an income from it – so it’s important to let your mortgage lender know exactly what your plans are. A buy-to-let mortgage is often only available for people who already own a property, and who have a good credit rating. Exact policies differ, but generally speaking, a mortgage provider will also expect to see evidence that you earn £25,000 or more per annum. How Are They Different? Buy-to-let mortgages don’t differ that much to ordinary mortgages; and getting to grips with them shouldn’t be too tricky. However, here’s a few key differences that you need to be aware of. Interest-only. The vast majority of buy-to-let mortgages are interest-only. That means, with each monthly repayment, you’re not paying off any of the capital, only the interest owed against the loan. What are the implications? At the end of the mortgage term, you will need to repay the capital – so you’ll need to have your finances in order by then. Interest rates. Interest rates are often higher than standard mortgages, and you’ll need to factor this in when you make a purchase. Higher deposit. As a buy-to-let property purchase is effectively a business move, the minimum deposit required is often higher than with standard house purchases. On average, expect to pay 25% of the property’s value. Specialist fees. Most buy-to-let mortgages also incur specialist fees, which are more expensive than standard mortgage fees. What Can You Borrow? When you apply for a buy-to-let mortgage, your provider will want to know more information about the purchase and the potential rental yield. This is so they can establish how much they can safely lend you. You can get a good idea about how much you can borrow by working out your rental income. The maximum amount you’ll be loaned is directly linked to the rental yield you can expect to generate. If you’re not sure what this is, ask letting agents in the local area, or check online to see what similar properties are making. Typically, your rental income needs to be at least 25% higher than your monthly mortgage payments. Important Things to be Aware Of Like any form of borrowing, buy-to-let mortgages come with risks attached. It’s important not to rely on the sale of the property to repay your mortgage, as property prices are volatile and your house may decrease in value – meaning you’ll have to find the remainder of the money owed from somewhere else. Unlike other financial products, if something goes wrong, it’s unlikely that you’ll be covered by any consumer protection – so it’s important to make sure your finances are all in order before proceeding with the purchase.
News
Scottish Election Results – Policies Relating to Home-Buying
Scottish Election Results – Policies Relating to Home-Buying In the recent elections, the SNP won 63 seats, which wasn’t enough for a majority, but was still a significant victory for the party. The Conservatives came in second with 31 seats, with Labour trailing in third place with just 24 seats. Here’s more details about the […]
Tenants
10 Ways to Make Sure You Get Your Deposit Back After Your Tenancy is Over
10 Ways to Make Sure You Get Your Deposit Back After Your Tenancy is Over At the start of your tenancy, you’ll have been asked to leave a deposit with your landlord – who would then have put it within a Secure Tenancy Deposit Scheme as they are legally obliged to do (we use MyDepositScotland) […]
General, News, Properties
Property Prices in Scotland are Falling – And Sales Remain High
Property Prices in Scotland are Falling – And Sales Remain High In a significant contrast to the previous year, house prices in Scotland have fallen by 8.4%, to just £159,198. However, demand for Scottish properties hasn’t been this strong in many years. A total of 19,802 homes were sold from January to March – the […]
News
The Holyrood Elections – And the Implications for Home-Buyers
The Holyrood Elections – And the Implications for Home-Buyers For the first time, Scottish voters are faced with a tough decision regarding taxation in the forthcoming elections. If you’re not sure what the party policies are, here’s a quick guide to help. Holyrood Elections – Taxation Matters SNP. Despite originally stating that they would be […]
Selling
The Home Report – What Is It?
The Home Report – What Is It? The Scottish Home Report Are you about to put your home on the market? If so, you’ll need to get a Home Report. This legally required document contains valuable information for prospective buyers – and can be easily arranged via your estate agent. If you’re feeling a […]
News
Stirling and Perth – Scotland’s Next Property Hotspots?
Stirling and Perth – Scotland’s Next Property Hotspots? It’s the question that every property investor and home buyer wants to know – where are the best places to buy in Scotland? Cities like Glasgow, Edinburgh and Dundee are still in high demand, but two other cities have started to become increasingly popular – Stirling and […]
Legislation, Property Finance
Investors Face Higher Tax Rate for Second Homes and Buy-to-Let Properties in Scotland
Investors Face Higher Tax Rate for Second Homes and Buy-to-Let Properties in Scotland New LBTT Higher Tax Rate Applies From 1st April 2016 Investors in Scottish property are preparing to face tax rate increases for purchases of second homes and buy-to-lets. From April 1 this year, a higher rate of Land and Buildings Transaction […]
