Buy To Let Investors

When choosing a buy-to-let property to invest in, it's no longer just about picking a good location and finding reliable tenants; some of the decisions you make today can have long-lasting consequences on both your short-term rental returns and your long-term growth.  

Buy to let property ownership involves balancing many moving parts. The market has evolved rapidly due to: 

• Tax Legislation Changes: Government policies around mortgage interest relief have shifted, especially for individual investors, impacting the net return on rental income. 

• Economic Shifts: Interest rates are constantly changing, affecting your mortgage payments and overall profitability. 

• Regulatory Requirements: Both energy efficiency regulations (the minimum EPC rating is E for rented properties) and obligations for Houses in Multiple Occupation (HMOs), can add complexity. 

• Financing Challenges: A buy to let mortgage often includes more strict lender requirements than a standard residential mortgage, plus potential personal guarantees for company purchases. 

One of the most significant differences between buying a primary residence and purchasing an investment property is the mortgage arrangement. A standard residential mortgage is not valid if you intend to let the property, meaning you will need a specific buy to let mortgage. This type of mortgage can involve:  

• A Larger Deposit: Many buy to let lenders expect a higher loan-to-value (LTV) ratio. 

• Interest Only Repayments: It is common for buy to let mortgages to be interest-only, with the capital due at the end of the term. Investors often plan to sell or refinance at that point. 

• Personal Guarantees: If you buy in the name of a limited company or another corporate structure, the lender might demand a personal guarantee from you as an individual. Our solicitors can provide the necessary advice before you commit to such a guarantee. 

Buy to let mortgages also contain more special conditions that must be satisfied before funds can be released. These conditions may include: 

• Planning Consents and Building Regulation Approvals: This is especially relevant if your property is classified as a House in Multiple Occupation (HMO). 

• Company Documentation: If you purchase the property via an investment company, you must comply with the Companies Act, including the submission of any relevant corporate resolutions or confirmations. 

Our Residential Property Solicitors are on the panels of the majority of mortgage lenders, which means we are familiar with the precise requirements each lender sets. We guide you step by step, from gathering the correct paperwork to finalizing the mortgage, reducing delays and complications in the conveyancing process. 

Due to the changing tax implications, many buy to let investors are now choosing to purchase properties via a company. This approach can offer various advantages, such as: 

• Allowing the company to deduct mortgage interest paid on a buy to let property, something that is no longer available to individual UK tax residents. 

• Potentially benefiting from retained profits being subject to corporation tax rather than higher income tax rates. 

• Providing flexibility if you plan to refinance the properties in the future. 

If you already own buy to let properties in your name or in a partnership, you may wish to consider incorporating your portfolio into a company to enjoy these possible advantages. Our residential property and corporate teams collaborate with tax advisors to make sure everything is structured correctly. We coordinate all necessary documentation, oversee the legal transfer of property title(s), and handle any simultaneous refinances as needed. 

Click below to learn more about how to incorporate your property portfolio in the dedicated section of our site:

• We have been ranked as a Top Tier law firm by the Legal 500 for the last seven years. 
• You will have access to more than 30 property experts across the Myerson Property Group, including residential property, property litigation, construction, commercial property, conveyancing and development. 
• You will receive city-quality residential property legal advice at regional prices. 

• We provide a partner-led service to ensure you receive the very best legal advice and commercially minded support. 
• We have a large team which can meet your deadlines. 
• We understand that each transaction is bespoke to your circumstances and that you need support from a conveyancing lawyer who is experienced in dealing with a wide variety of clients and types of work. 
• We are a full-service law firm operating from a one-site office, which means our property teams communicate effectively and efficiently. 
• We use the latest technology to ensure that we are working as efficiently as possible, and that geographical distance is no bar to us from providing excellent client service. 

• Look at the Myerson Promise for further benefits of working with us here.