The holiday let mortgage has well and truly checked in

Friday, 7th September, 2018
holiday home mortgage

Buy to let mortgages for short-term holiday lets are no longer just a seasonal thing. In fact, it would seem that they’re here to stay – whatever the weather.

Until recently, lenders have tended to prefer to award a buy to let mortgage to those with plans to let out their property on a long-term basis and not the short-term. This has now changed – particularly in the wake of companies like Airbnb, which have transformed the holiday accommodation sector.

However, as we approach the end of summer, and as many of us get back to normality after enjoying what has been the finest summer we’ve had in years, there will no doubt be a selection of people looking to buy a UK holiday home – and who may already be considering a holiday home mortgage.

The good news is that holiday home mortgages are now more accessible than ever and this, combined with high short-term holiday rental yields, makes owning – and letting – a holiday home an appealing prospect.

According to the Residential Landlords Association, seven per cent of landlords are moving their properties from long-term to short-term lets – a factor that has undoubtedly been prompted by changes in tax relief on buy to let properties.

As furnished holiday lets are treated as businesses and not investments they are taxed differently, which enables those who have a mortgage on a holiday let property to qualify for entrepreneurs tax relief and even claim the cost of furnishing the property!

The recent shift in attitude towards Airbnb by lenders has also changed things considerably. Beforehand, borrowers had to request permission from the lender to let their property out on a short-term basis and many lenders ruled it out completely. However, the mortgage market is moving forwards and against the backdrop of recent tax changes to buy to let properties, the short-term let mortgage is gaining popularity.

Whilst we can’t advise on the tax implications of arranging a holiday let mortgage, as a Guildford mortgage broker we certainly can advise on the right mortgage that could help you to not only own your dream holiday home, but also potentially make a nice profit on it, too.

To speak with a Guildford mortgage specialist contact the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk. One of our buy to let mortgage experts will be able to talk you through your options and find a short-term buy to let mortgage that suits you. We’re also specialists in standard buy to let mortgages, limited company buy to let mortgages and commercial mortgages, too.

By Mark Finnegan, Director at Complete Mortgages

Changes to Houses in Multiple Occupation Mortgage licences

Thursday, 14th June, 2018

The rate of change across the mortgage market really is astonishing (yet another reason to use a mortgage broker!), and this time it’s Houses in Multiple Occupation (HMO) licences that have come under scrutiny – and that are set to change from 1 October 2018.

For those who don’t know, the UK government defines a HMO as:

A property rented out by at least three people who are not from one ‘household’ (e.g. a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.

A good example of a HMO is a student property. 

What’s changing?

 

 

Pre-October 2018

 

 Landlords require a HMO licence if their property:

  • Is rented to five or more people who form more than one household
  • Is at least 3 storeys high
  • Includes tenants who share toilet, bathroom or kitchen facilities
 

Post-October 2018

 

 Landlords will require a licence if the property is only two storeys high.

Landlords will also have to ensure that:

  • The floor area of any room in the HMO used as sleeping accommodation by one person aged over 10 years is not less than 6.51 square metres
  • The floor area of any room in the HMO used as sleeping accommodation by two persons aged over 10 years is not less than 10.22 square metres
  • The floor area of any room in the HMO used as sleeping accommodation by one person aged under 10 years is not less than 4.64 square metres
  • Any room in the HMO with a floor area of less than 4.64 square metres is not used as sleeping accommodation

The Residential Landlords Association estimates that this change will make an additional 177,000 HMOs become subject to licencing, which will impact on a substantial number of landlords across the UK.

I’m a HMO landlord – what does this mean for me?

  • Rooms that fail to comply with the new minimum requirements cannot be let
  • Those depending on renting all of their current rooms out – including those that will be deemed too small as of October 2018 – in order to make HMO mortgage repayments may find that the new rules make their investment less viable
  • Fewer lending options when it comes to applying for a HMO mortgage

What can I do to get HMO-ready? 

As a Guildford mortgage broker, Complete Mortgages is well placed to get you equipped for the forthcoming change by a) exploring – in detail – how it could affect you, and b) looking at ways in which to mitigate the changes by ensuring you have the appropriate HMO mortgage in place.

With almost four months until the changeover, there is plenty of time to make any necessary changes to your current mortgage.

What should I do next?

Whether you’re interested in arranging a new HMO mortgage, looking to explore your buy to let mortgage options or simply want to remortgage, Complete Mortgages can help. Contact the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk to find out more.

By Mark Finnegan, Director at Complete Mortgages

Three reasons to use a buy to let mortgage broker

Monday, 6th November, 2017
buy-to-let mortgages

The buy-to-let mortgage market is booming – but not necessarily in the way you might think.

In fact, it’s taken quite a pounding over recent years. The first attack came when George Osborne, in his role as Chancellor, announced the phasing out of tax relief for landlords. The second, also a ‘blow’ by Osborne, came in the form of stamp duty surcharge on additional properties.

The result? The jury’s still out, however the repercussions seem to be a combination of landlords with high LTV mortgages releasing some of their properties back on to the market and existing landlords raising their rent.

Yet recently released figures suggest that buy to let mortgages are far from over.

According to Moneyfacts*, there has been a seven per cent rise in the number of buy to let mortgage products to enter the market, taking the total to 1,735 – the highest number of mortgages for landlords since the heady, pre-crash days of 2007.

It also makes choosing the right buy-to-let mortgage increasingly difficult.

So, as increasing taxes don’t seem to be putting off would-be landlords from entering the market – and following our recent ‘five reasons to use a mortgage broker’ article – we thought we’d outline three key reasons to consider using a buy to let mortgage broker.

1. Time is money

As a mortgage broker in Surrey, a county with a large share of buy to let landlords, we are in a continuous cycle of appraising new buy to let mortgage products in the context of our clients’ needs. Of course this is hugely time consuming – however it’s our job. You, on the other hand, may not have the time required to separate the wheat from the chaff and sift through this growing glut of deals.

By getting a buy to let mortgage broker to do the legwork and find a deal based on your personal requirements – all of which would have been established during an initial consultation – you are able to save yourself huge amounts of time by only having to deal with a shortlist containing the best-of-the-best deals.

2. Mortgage brokers are mortgage experts

If you’re looking to sell your property, you’ll no doubt commission an estate agent to sell it. If you have a problem with your roof you’ll consult a roof specialist. Similarly, if your car’s not working, you will probably visit a mechanic. We can’t all be experts in everything – there simply isn’t enough time. We don’t claim to be property experts, nor can any member of my team (myself included) fix a car, but we are experts in arranging a mortgage for our clients. If you want to save time and benefit from expert advice, then use a mortgage broker with a good reputation.

3. Not just any mortgage

Those of you that already have experience of getting a mortgage – either independently or though a mortgage adviser – will know that there is a lot of ‘crossing the Is and dotting the Ts’. With buy to let mortgages, there is even more.

Not only that, but a good mortgage broker can help advise you with regards to making sure the numbers stack up (i.e. the mortgage you secure works in tandem with the rent you plan to charge). The difference between 1% on your mortgage rate here, or a potential/hidden charge there, can make a serious impact on your profit. An experienced buy to let mortgage broker will be able to review this in relation to your own requirements very quickly and make sure that you get the right deal for your circumstances.

Cut through the buy-to-let mortgage ‘noise’ and contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also offer specialist mortgages including commercial mortgages, self-employed mortgages and adverse credit mortgages.

By Mark Finnegan, Director at Complete Mortgages

*https://www.ftadviser.com/mortgages/2017/09/12/number-of-buy-to-let-deals-at-10-year-high/

The buy to let mortgage goalposts have moved… again

Thursday, 28th September, 2017

Staying on top of the buy-to-let mortgage market has become a job in its own right.

Some changes are small and relatively inconsequential – the inner workings, or behind the scenes details, if you will, that we tackle as part of the mortgage application process and that don’t need to burdened on our clients.

Others, such as the upcoming Prudential Regulation Authority changes, which will be applied by 30 September 2017, do need some light shed on them.

After all, current landlords and those in the process of applying for a buy to let mortgage are coming to us and asking ‘what does it mean for me?’.

In order to make the information accessible to everyone, we’ve prepared our Prudential Regulation Authority changes made simple.

This should clear a few things up, however if you still need clarification then please call a member of the Complete Mortgages team on 01483 238280, who will be more than happy to help.

So, if you’re a landlord and wondering ‘how will the new buy to let rules affect me?’, then read on.

1. Size matters

As part of what appears to be a crackdown on buy to let landlords who have ‘stockpiled’ mortgaged properties, the new rules really impact those who have four or more properties within their portfolio.

It’s also important to note here that the figure of four doesn’t relate to the number of mortgages you have – but the number of properties. If you own four properties under one mortgage then you will still be treated as a portfolio landlord. If you have two or three mortgaged buy to let properties, the new lending criteria will not affect you.

2. Down to the last detail

If you currently own three buy-to-lets and are looking to buy a fourth, or if you already own four and are looking to buy more, then you will be required to prove that your other properties – or at least your ability to cover the cost of the other properties – won’t be affected by taking on another.

To do this, lenders will:

a. Want to review income from other sources – including that derived from your existing portfolio – to ensure that can cover maintenance and void periods

b. Assess your experience as a landlord

c. Apply an Income Coverage Ratio, which is dependent on a number of factors including all your earned income. Note: this will vary from lender to lender

d. Require full details of the entire portfolio in order to assess the overall risk, potentially including assets/liabilities, cashflow and investment intentions.

Essentially, lenders will want to carry out stringent checks to make sure that taking on an additional property – or properties – will not be too much of a financial stretch.

3. Getting personal

Of course, as part of these checks, lenders will also want to know your personal liabilities and outgoings, too.

Expect the following areas to be explored as part of the review:

a. Credit cards and their balances

b. Vehicle financing agreements

c. Loans

d. General outgoings

The buy to let mortgage market is a constantly evolving sector. As a result, it’s important that you don’t get caught out.

As a Guildford mortgage broker our advice for buy-to-let landlords is to contact a mortgage adviser to find out how the new changes might affect you personally.

Likewise, we recommend that all new and aspiring landlords find a reputable mortgage broker to advise them on how to apply for a buy to let mortgage in the context of the impending new rules.

Contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk. Remember, we also offer specialist mortgages including limited company buy to let mortgages, equity release mortgages and adverse credit mortgages.

By Mark Finnegan, Director at Complete Mortgages

Complete Mortgages recruits ex-Countrywide highflier

Sunday, 20th August, 2017

Guildford mortgage broker, Complete Mortgages, has bolstered its rapidly expanding team of mortgage experts by recruiting one of Countrywide Mortgage Services’ most successful mortgage brokers.

Lee Cousens, who joined Complete Mortgages at the end of March, was ranked one of Countrywide Mortgage Services’ top 20 brokers from a pool of 700 located nationwide.  He is now working full time out of Seymours Estate Agents’ flagship Woking office.

During his time at Countrywide Mortgage Services, he carved a national reputation for delivering a professional service and expediting the mortgage applications of his first time buyer and second time mover clients.

With a prominent financial services career spanning over 10 years, eight of which were spent at Barclays where he worked with high net worth individuals, and including roles at prominent FTSE 250 companies, Lee has consistently generated first-class results within the residential and buy to let mortgage markets.

On joining the Complete Mortgages team Lee comments: “After a rich and varied career spent working at some of the financial services industry’s most prominent companies, I’m now looking forward to apply the knowledge I’ve accrued during that time with a view to supporting Complete Mortgages’ growth plans. The firm already has a solid UK-wide reputation and it’s an exciting time to the be joining a company that has so much more growth potential.”

Outside of work Lee, who lives in Chertsey, spends his time playing cricket and golf, as well as watching his team Brentford FC. He also ran the 2017 London Marathon on 23 April.

Complete Mortgages’ Director, Mark Finnegan, adds: “We’re delighted to welcome Lee to the team and thrilled to have attracted such an accomplished and well-regarded industry professional away from the UK’s largest property services group. Lee is a great fit for the team and will no doubt help Complete Mortgages continue to expand its customer base and strengthen its 8 year relationship with Seymours Estate Agents, whilst providing exceptional levels of customer service, industry insight and professional advice.”

For more information or to arrange a mortgage with Complete Mortgages contact 01483 238280 or email info@complete-mortgages.co.uk.

Image caption: Lee Cousens (centre) with some of the Seymours Woking team.

Big changes for buy-to-let in 2017, but stress not

Wednesday, 11th January, 2017

The buy to let mortgage market is under fire once again.

Many buy to let landlords are still reeling from the changes announced by former Chancellor, George Osborne, which will see tax-deductible expenses reduced to 20% on a sliding scale from April 2017. And then there was the stamp-duty charge for second homes, which was introduced in April 2016.

However, when it comes to buy to let mortgages it seems that what might be regarded as ‘bad news’ for current and would-be landlords comes in threes.

Following the supervisory statement from the Central Bank’s Prudential Residential Authority on underwriting standards for buy to let mortgages, actually arranging a buy-to-let mortgage has now become more difficult.

Why? Because it has been deemed that there are too many buy to let mortgages in the market.

Now, applicants will have to undergo a ‘stress test’ that not only delves deeper into an applicant’s affordability levels, but also re-evaluates what affordable means.

Lenders will now be expected to assume a minimum borrower interest rate of 5.50% and potential interest rate rises will have to be considered for at least the first five years of the mortgage. Not only that, but landlords who own four or more mortgaged buy-to-let properties will need to submit income and mortgage details on each of them when they remortgage or purchase a new property.

As with most decisions that have the potential to have a significant impact on the property market, the rules will be phased in slowly and aren’t expected to come into effect until late 2017, however if you are a buy to let landlord looking to remortgage or thinking of applying for a buy to let mortgage then it’s probably worth considering your options sooner rather than later.

As a Guildford mortgage broker that specialises in buy-to-let mortgages and that has access to a comprehensive range of buy to let mortgage products, we are confident that we can offset some of the proposed changes by providing our clients access to a selection of products whereby the lender takes a more holistic approach.

For example, under the new rules, landlords with low rental yields may be thrown into the ‘unaffordable’ pile which, depending on the level of borrowing required, may jeopardise – if not scupper – their buy to let mortgage application. However, we have access to lenders who take into account personal income, too, which provides a much more balanced picture on what is and isn’t affordable.

Our advice is to get in touch with the Complete Mortgages team to find out how we can help navigate you through the buy to let mortgage application process and get you that step further to building your property portfolio – or, if you’re already a landlord, help you secure a mortgage that enables you to retain your position as a landlord.

Contact 01483 238280 or email info@complete-mortgages.co.uk for stress-free advice on what the new stress testing entails.

By Mark Finnegan, Director at Complete Mortgages

A complete guide to Houses in Multiple Occupation Mortgages

Wednesday, 30th November, 2016

In the modern age, where information is in abundance, most people are au fait with most things.

From changing a plug to servicing your car, all you need to do these days is ‘Google it’. People now even attempt to self-diagnose their ailments via the Internet or attend a doctor’s appointment armed with a level of knowledge that even a decade ago wouldn’t have been possible.

And although the mortgage market is very different to the market of keeping people alive and well, there are some similarities.

For example, everyone knows what a mortgage is and will meet their mortgage broker with a good understanding of what is available. Similarly, most people know about buy to let mortgages and their benefits. These days, it’s not even uncommon to hear people debating the merits of bridging loans and commercial mortgages in the pub.

However, if you ask anyone what a houses in multiple occupation mortgage (or HMO mortgage) is, you’re likely to be met with a blank face.

And that is exactly what has prompted this article. So, let’s start at the beginning.

What is a HMO mortgage?

A houses in multiple occupation mortgage relates to a mortgage taken out on a property that is used to house multiple people, all of whom are living their own independent lives yet share the same facilities, and who, together, do not constitute a family unit.

That’s a bit clearer. Can you provide examples?

Yes, common examples of HMOs include a house or flat share, student accommodation, a converted house that’s been divided into bedsits or a converted property with mixed accommodation types.

Sounds interesting – but it also sounds like hard work. What are the benefits?

HMOs tend to work for both tenants and landlords for very different reasons. For tenants, renting a room is a much more affordable proposition then renting an entire house or flat. For the landlord, gross yields are generally higher and it means that all their eggs aren’t in one basket (i.e. a landlord doesn’t have to wait to let an entire house and the risk of periods of not letting one room is cushioned, if not eliminated, by the fact that others will be let).

Okay, what do I need to think about before applying?

HMO mortgages are more complex than the standard buy-to-let mortgage, however there is a wide selection of HMO mortgage products available. Given the level of complexity, we would recommend applying for a HMO mortgage via a trusted mortgage broker, who will be able to save you time, hassle and possibly a degree of heartache.

The areas of discussion that your mortgage broker will cover prior to the application are likely to include:

The number of rooms being let The property’s location Previous landlord experience
Projected yield The nature of the tenants (students, professionals etc.) Credit rating
Level of borrowing required How you intend to purchase the property Whether or not your HMO arrangement will require a licence

Anything else I need to know?

Yes. If you are planning to apply for a HMO mortgage, then you need to bear in mind that large HMOs require a licence to ensure that the property is compliant with occupant safety requirements and meets the Housing Health and Safety Rating System. You can find more information on how to apply for a HMO licence here.

Whether you’re interested in arranging a HMO mortgage, looking to explore your buy to let mortgage options or simply want to remortgage, Complete Mortgages can help. Contact the Complete Mortgages team on 01483 238280 or email info@complete-mortgages.co.uk to find out more.

By Mark Finnegan, Director at Complete Mortgages

Mortgage boom for Bournemouth

Thursday, 18th February, 2016
mortgage broker in bournemouth

It really is boom time for Bournemouth. Not only is lending on the up, which means that more people in the area are arranging a mortgage, but also a survey carried out by a travel brand has revealed how Bournemouth is now one of the top trending hotspots in England.

Kent took the top spot of UK destinations with flight searches up by 602 per cent. Cambridge came second, up 288 per cent, with Bournemouth up a staggering 100 per cent*.

As a Bournemouth mortgage broker Complete Mortgages has witnessed the Bournemouth property market go from strength to strength over recent years. We’ve certainly seen an increase in mortgage applications and the recent swathe of deals to hit the market has only exacerbated this.

Even the Bank of England seems to be surprised by the amount of mortgage lending that took place in December (a period that’s generally quiet) after it was revealed how £18bn was released by banks and building societies during the Christmas month – up £3.3bn from the same period in 2014.

Looking at the increase in people applying for a mortgage in Bournemouth combined with the revelation that Bournemouth is a ‘top trending hotspot’, it would seem that the area is becoming a go-to place for homemakers, holidaymakers and investors alike.

So, if you’re a buy-to-let investor looking for a buy-to-let mortgage, or thinking of jumping on the Bournemouth bandwagon and simply want to move to the area, then get in touch and find out how we can help you secure a mortgage and be part of the Bournemouth boom.

Whether you’re looking to arrange a mortgage in Bournemouth or simply want advice on finding the right mortgage for you, contact me on 01202 049661 or email jo@complete-mortgages.co.uk.

By Jo Frankowski, Manager at Complete Mortgages’ Bournemouth office

*Momondo