The right properties bought to let can be a good investment - with rising rental incomes against the current backdrop of interest rates that are still low despite recent rises, the possibility of increasing property values over the medium to long term and generally less volatility than the stock market.

It appears that more and more lenders are offering specialist mortgage packages for the buy to let market. Generally speaking, lenders will offer loans of up to 90% of the value of investment property, as long as the rental income exceeds the mortgage payment by at least 125%. At present (late 2007), rental yields in many areas are lower in comparison to the value of the property than they were two or three years ago, which may restrict the size of the loan offered.  In response to this, lenders are bringing out schemes which allow other income to be taken into account, or which require less than 125% rental cover.  Contact us for details. 

If you are not experienced in this type of venture, caution should be exercised before entering the buy to let market, with due consideration being given to the possibility of a slump in the demand for rented property at some time in the future, or the effect of any periods of non-tenancy.

For expert advice, contact The Mortgage Company Limited and we will be happy to help you, whatever your query.