At Finefair we work hard to support clients who want to invest in properties across London. Our services cover every Borough in the capital, from prime inner areas to outer hotspots. If they are considering property investment Bromley based buyers can rely on us to help. We understand the popularity of the area and strive to offer the very best services, including advice about getting the best returns.
One thing every investor and landlord should be aware of is how much changes in the criteria for buy to let mortgages can impact returns. This has become an important topic recently due to the introduction of new tougher lending criteria in January. The move was made to help protect lenders if interest rates were to rise to 5.5%.
Before the change landlords had to provide proof that the rent they earn from a property would cover 125% of the actual mortgage interest repayments. The new criteria mean they must now cover 145% of the interest.
The changes to lending criteria are tougher on landlords who are on more costly standard variable interest rates. Fixed-rate deals remain attractive but lenders may not be willing to offer an existing landlord a second deal after the current one comes to an end. This leaves no choice but to go on the variable rate unless they remortgage with a new lender. Doing this could be costly though.
The situation is a very tough one that could potentially hit the profits of some landlords hard. Good planning is needed to help lessen the blow. One option is to increase rents but this needs to be done with care; you can’t simply do it. Consider legal obligations, the rights of tenants, and the impact the higher prices will have on them. Also keep in mind what the market conditions are like.
Finefair supports landlords however we can. When it comes to property investment Bromley landlords and those in other Boroughs across the capital can trust us to help them. Get in touch today to discuss your needs and we will explain various investment options to you.