New to market – Building a property portfolio

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There are approximately 70 different lenders supporting the buy-to-let mortgage market in the United Kingdom. The lenders support either the mainstream buy-to-let mortgage market, or the specialist buy-to-let mortgage market.

The mainstream lenders offer the most competitive products, as they compete on price rather than lending criteria. Whilst the specialist lenders do compete on price, within their peer group of lenders, they tend to focus their lending criteria on areas that the mainstream lenders do not support.

As one example, the majority of specialist buy-to-let lenders support both limited company and individual mortgage applications, whereas the majority of mainstream lenders support individual mortgage applications only. It is also important to understand, that a number of the buy-to-let lenders only accept mortgage applications via mortgage intermediaries and not direct from a landlord.

When assessing your lending requirements, lending criteria within the buy-to-let mortgage market is as important, as finding the most competitive product.

Different lenders consider different lending criteria, whether it is the type of property being mortgaged, your personal background income, through to the maximum age they would consider your mortgage term for. There are numerous elements of lending criteria to consider before assessing the most competitive product for your requirements.

The most competitive product should always be at the forefront of your mind. When assessing the available products, the cheapest interest rate is not always the best product when taking into account all fees. To arrive at the most competitive product, give some thought to assessing the total to pay over the initial product period rather than just the cheapest pay rate product.

The cheapest pay rate product may well have a higher lender arrangement fee and when you total to pay over a 2- or 5-year initial product period, could be more expensive when compared to a higher pay rate with a lower lender arrangement fee. Your mortgage intermediary will guide and support you when sourcing the most competitive product.

Initial product period choice will also form part of your overall product selection process. The majority of buy-to-let mortgage products have what’s known as an early repayment charge which applies during the initial product period only. If you plan to remortgage your property to raise further funds in the future, then give some thought to that initial product period timeline and ensure your initial product period dovetails with your strategy.

Being new to the buy-to-let market should not feel daunting, there is plenty of support available to help you, to make the right choices at the right time. The National Residential Landlords Association (NRLA) website is a great starting point to help you on your new journey, as a landlord.

Please note lenders have different minimum criteria requirements and not all landlords and property types will qualify for this specific product. For further information contact NRLA Mortgages.

This is an advertisement only and in no way should be viewed as a personal recommendation or advice. Before a recommendation of the suitability of the product can be given, we will direct you to 3mc (UK) Limited who can provide specialist mortgage advice. As part of this they will ask questions so that they can fully understand your circumstances before giving advice.

NRLA Mortgages is a trading name of LPTE Limited which is an Introducer Appointed Representative of 3mc (UK) Limited who is Authorised and Regulated by the Financial Conduct Authority and is entered on the FS Register under reference 302992.

Please note: 3mc can advise/arrange Business Buy to Let (BBTL) and Consumer Buy to Lets (CBTL). Of the two, only Consumer Buy to Lets are regulated by the FCA.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

ANY PROPERTY USED AS SECURITY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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