Landlords Seeking Buy To Let Mortgages Beware
If you are considering becoming a landlord or are already one and require finance to purchase an investment property to let out then one type of finance that may be suitable is a buy to let mortgage. Such mortgages are offered by the likes of the major high street banks and building societies as well as a number of specialist lenders.
However, before applying for such a mortgage, you may be interested to know that there are quite a few lenders that will not provide a buy to let mortgage if it is the intention of the landlord to rent out the property to people on benefits.
In fact, according to 3mc that are the Residential Landlords Association mortgage consultants, it was established that in 2017 around two thirds of lenders in the UK who represent about 90% of the profitable buy to let mortgage marketplace did not permit landlords to rent out their properties to people who were receiving housing benefit.
This would mean that a significant number of lenders here in the UK would not provide buy to let mortgages in such circumstances. Therefore, landlords are being severely limited to a small percentage of lenders if they do wish to rent out their properties to tenants on benefits. This could mean that they are not able to obtain a competitively priced buy to let mortgage package. As a result, landlords in this situation may feel it necessary to charge their tenants a larger rental amount either on a weekly, fortnightly or monthly basis.
Apparently, the RLA is to or already has written to a government minister to express its concern about this. It will be interesting to find out in due course if the RLA’s representation has any impact perhaps resulting in more lenders who provide buy to let mortgages making available such funds to landlords who rent out one or more of their properties to those on housing benefit or some other form of benefit. We will endeavor to keep our readers up to date should there be any developments in this respect.