Buy to Let

Whether you’re an established landlord or it’s your first time, we’re here to help

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Taking the hassle out of building your property portfolio

Property is a popular investment for the future and we’re used to helping our clients plan their extra retirement income or obtain capital growth through property. Whether you’re looking to purchase your first investment property or expand your portfolio, your Caenstone advisor will talk you through the options available to you.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Some buy to let mortgages are not regulated by the Financial Conduct Authority

Our step by step guide on
how it all works

Start
Find out how much you can borrow

Put bluntly, it depends on what you can afford.

A buy to let purchase differs from a residential purchase in that the estimated rent will be a driving factor as to how much can be borrowed as well as an applicants earnings and commitments.

That’s why we start with a review of your current finances, and we talk you through the various costs of buying a property. Before you start browsing the property pages, you need to know your budget, including how much deposit you should have available.

We will let you know what documentation is required.

Step 1
Get a Mortgage in Principle

A mortgage in principle is not a guarantee, but it does show that a lender is willing in principle to financially support your property purchase.

When you start viewing properties, this makes you look like a serious buyer.

Step 2
Start house hunting

Know what you’re looking for (including your must-haves, nice-to-haves, and deal-breakers).

Then you need to know where to look, including websites, estate agents, property developers, and auctions.

Step 3
Contact your mortgage broker

As soon as you’ve found your perfect place, put in an offer and wait for it to be accepted.

Contact us to let us know and we’ll start to get the wheels in motion for you.

Step 4
Find a solicitor

You’ll need a solicitor to take care of the legal work involved in purchasing a property.

1) They understand the property sale and purchase process

2) They handle the various pre-purchase searches so that there are no surprises

3) They take care of the contracts

4) They will register the property in your name

Step 5
Apply for a mortgage

Now it’s time to get back in touch with your mortgage broker lender and make a detailed mortgage application. You won’t necessarily apply to the lender you have the agreement in principle with, your adviser will assess the most suitable options available at the time of application.

Step 6
Get a valuation

As part of the application process, the mortgage lender will carry out an independent valuation and survey of the property.

The minimum requirement is a ‘basic’ or ‘mortgage’ survey which is a relatively simple price appraisal, but you have the option to go for a more detailed survey that examines the building’s structure and flags up any possible long-term issues.

The bank’s surveyor will appraise the property value and also the expected rental amount that could be achieved in the current market.

Step 7
Receive a mortgage offer

Following the lender’s credit check, an examination of your financial details, and valuation of the property – and assuming everything is okay in that it falls within their lending terms and conditions – they will offer you a mortgage.

Step 8
Exchange contracts with the seller

Exchanging contracts usually takes place 7-28 days before the date of completion (when the property becomes yours!) and involves the lawyers on both sides confirming that both seller and buyer are ready to proceed (for you as a buyer, that usually means the mortgage offer has been issued, having a signed contract, transferred deposit funds and a buildings insurance policy is in place.

Step 9
Move into your new home

Once contracts have exchanged and completion has taken place, you’ll be given the keys and you can secure a tenant to move in.

Step 10
Complete

Helping to find you the right mortgage

We deal with a wide network of lenders offering some of the best mortgages on the market

Talk to an expert advisor today
020 3909 9585

Too busy to talk now? Find a convenient time for you Arrange a callback

Commonly asked questions

How is ‘new build’ classified?

Different lenders have varying criteria as to which properties are defined as ‘new build’. A common definition is a property that has been built, converted or refurbished within the last two years;  often including properties that have not been occupied since being built.

It can often be more restrictive to secure a mortgage on a new build property. However, most lenders are prepared to lend at a higher loan to value rate (LTV) on a new build house than on a new build flat.

What is the maximum age I can take out a mortgage?

There is no blanket maximum age for applying for a mortgage – most lenders have their own age limits.

Usually, the maximum age at the end of the mortgage term is 75 or your intended retirement age, whichever is sooner. It’s not impossible to get a loan that goes beyond this age limit, but most options require you to provide proof that you can repay the mortgage when it extends into your retirement.

Some lenders will lend to clients up to age 80, using salaried earnings. And some will lend beyond that upon proof of a pension that can cover payments at 80+.

What type of mortgage should I choose (fixed vs. variable)?

It depends on what type of mortgage suits your circumstances and plans best.

Fixed

As it says on ‘the tin’, your rate of interest is fixed or guaranteed not to change for a defined period (typically 2, 3, 5 or 10 years) regardless of changes to the Bank of England base rate. This type of mortgage gives you certainty, allowing you to budget effectively. They usually carry an early repayment penalty so it’s important to consider how long you wish to fix for (see the info on ‘porting’). The longer the fixed period, the higher the interest rate is likely to be; effectively paying for protection against any market rate changes.

Variable

The interest rate on a variable mortgage moves up and down, usually in response to the UK economy. An advantage of this type of mortgage product is that it’s often more flexible, with lower or no exit fees.

Variable mortgages fall into three categories: tracker, standard variable, and discounts.

Tracker – The rate tracks an economic indicator, most commonly the Bank of England base rate or LIBOR. It will be pegged above the indicator it is tied to by a fixed margin for the product term, typically two years or for the lifetime of the loan.

Standard variable rate – This is the rate you will typically move onto after finishing an initial structured rate. Each lender manages their own SVR, often following the Bank of England base rate but not necessarily. They can range from 2% to 5+%. There are no exit penalties for an SVR mortgage.

Discount – These products offer a discount against a lender’s standard variable rate for a defined period, typically two or three years. However, there is no guarantee that a lender will move their SVR down if the BBR rate goes down. Discount rates often don’t carry exit penalties.

Read more

The complete guide to buying your first home

Buying your first home is exciting! It’s also stressful, with plenty of ‘traps’ for the unwary.

Expert advice and guidance is essential, and we lay out the whole process – step by step and jargon-free – in our complete mortgage guide for first time buyers.

Read more

First time buyer - case study

Learn how Mai’s personalised experience saved her time and money, giving her the mortgage she wanted.

Read Mai's story

Talk to an expert advisor today
020 3909 9585

Too busy to talk now? Find a convenient time for you Arrange a callback

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Important Information

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. The typical fee that we charge is £250. We may charge a higher fee for more complex cases. Caenstone is an appointed representative of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority. Caenstone, 40 Bank Street, London, E14 5NR.