Private landlords have become increasingly popular in recent years, due to the growing demand for rental housing. In 2010, there were 11 percent fewer council homes available than before, forcing many people to look to private landlords for a place to live.

Rental payments have increased in recent years due to increased mortgage rates for landlords which has slowly started putting people off renting as the cost of living rises. Tenants are signing an assured shorthold tenancy agreement to reside at the property for 6-12 months at a time.

Buy to let mortgages for UK landlords

Property is often seen as a great way to invest money, as it can be relatively risk-free and can help keep pace with inflation. Buy-to-let landlords may also use their properties as a vehicle for retirement savings, which gives them a sense of security during the later stages of life.

For a buy to let property, landlords may opt for an interest only mortgage and a sufficient amount of rental income to be received each month from their tenant. Most lenders accept these types of mortgages but you will need to pass an affordability assessment as this is classed as a higher risk investment.

To get a buy to let mortgage, you will need a bigger deposit compared to residential mortgages, most lenders requires a minimum deposit of at least 25% of the purchase price. There are a few main factors taken into consideration when the mortgage provider looks to accept your application such as the rental yield on the property, the chosen mortgage term/fixed term and interest rates you have available to you, as well as your affordability and credit rating/history, the amount of rental income achievable on the property is also important.

For more information on buy to let mortgages visit our page here: https://www.ltcmortgages.co.uk/buy-to-let

Buy to let property

Unfortunately, this also means that if tenants fail to pay their rent, landlords could find themselves in financial trouble. This is why it’s important for landlords to be responsible and enforce rent payments, as well as keep their properties well maintained when reasonable wear and tear occurs, entrance halls in flats to be safe and secure, and smoke alarms and carbon monoxide detectors near gas appliances.

Each rental property needs a gas safety check to be carried out by a gas safe registered engineer to make sure the property is safe to be lived in before any tenants move in. Every tenant has personal checks known as referencing this is to check for any sort of payment arrears, county court judgments or defaults.

When you move into the property as a tenant the letting agent will provide you with a new tenancy agreement, a how to rent guide and a range of other documentation. A gas safety certificate and an energy performance certificate will need to be completed before a tenant moves in.

It will fall to the tenant to pay council tax and other regular household bills, it is always best to have contents insurance so your belongings are protected, research each insurance company and apply for what suits your needs best.

Rental income

Tenants should also be aware of the potential risks they could face if they default on their rent and go into rent arrears. Both tenants and landlords can benefit from a mutually beneficial agreement when it comes to renting out property. Landlords are better off when the tenants pay their rent on time and keep their property in good condition, while tenants are better off when landlords provide a safe and secure home.

Most estate agents ask their tenants for a guarantor, the most common is someone who owns their own home as this is added security for the landlord if you were to miss rental payments, the chosen guarantor will then become responsible for paying the rent.

Overview

Each party needs to consider the other's position before entering into an agreement in order to ensure that both sides will be happy with the outcome. Ultimately, it’s up to both tenants and landlords to ensure that their relationship remains fair and beneficial.

In conclusion, it is difficult to determine who is better off between landlords and tenants. On the one hand, landlords need rental income in order to sustain themselves financially, while on the other hand, tenants need a safe place to live. By working together in a fair and mutually beneficial tenancy agreement, both parties can benefit from the arrangement.

Ultimately, it is up to each individual to decide what works best for their circumstances. Both landlords and tenants have a responsibility to ensure that their relationship remains fair and equitable for all involved. This way, everyone will be better off in the long run.

If you are interested in a buy to let mortgage, email us on [email protected] or contact us at 0151 662 0188.