[Finance] Buy to Let Mortgages

[Uncle Spielberg]

Lets put this to bed

You need a 20% deposit minimum ideally 25%
The loan is based on the rental income of the property unless you try Barclays, Clydesdale or Furness who do it on overall income and expenditure
It is based on 125% or 145% x 5.5 % rental yield usually depending on your tax rate
It is not treated the same as a residential mortagage, ie income multiples of income
most lenders ask for a 25 k or at least 20 k personal income unless you try someone like aldermore, bm solutions, new street or the mortgage works who have no minimum income
most lenders need you to be a residential mortgage holder bar a few

I hope this helps

 

[Renegade1]

Well, you clearly have a few bob, so if you ARE a fit girl as well, then you tick my only two boxes. I’m interested.

Love

Dale x

Errrr,I wish I did have a few bob.Looking to buy a flat for an investment doesn't make me Richard Branson.

As for being a fit girl,if I was I wouldn't be here looking for tips would I.I would have snared
me a rich mug like so many of them do.

 

[Weststander]

I wonder how likely it would be that you would get caught if you didn't declare your rental income.
Especially if the property you rented was abroad.If you transferred the rent money to a UK bank
and then sold the property and didn't declare it.I wonder what are the chances with so many
cases the tax office have to deal with.

It's completely unrelated. The catching out of those selling/transferring to family and not declaring the gain, is very straight forward. HMRC have full access to Land Registry data and examine it as a matter of course.

Perhaps it's easier to not declare rent, but remember:
1. People fall out and snitch to HMRC.
2. Mandatory penalties based on the lost tax and interest will arise on undeclared income and gains. There's no leeway now for a kind HMRC inspector to believe a tale of I simply forgot etc and let you off. In these circumstances, HMRC can go back 20 years.

 

[Uncle Spielberg]

It has the feel of a boring dinner party that’s dragged on past 3am

Lol !

 

[Uncle Spielberg]

Moergages are important but so many better things to talk about lol

 

[Weststander]

Moergages are important but so many better things to talk about lol

What, more interesting than sex, football, movies, snow or Pardew?

 

[cjd]

Just to possibly expand this thread.....I have one or two properties let out to tenants through a well known local Letting Agency.

I pay a commission each month on their rent of 8% plus VAT.

Some of my tenants have stayed with me for over 9 years, another 8 years and another 6 years. I like to think it is because I'm a reasonable Landlord and also the properties are kept in very good condition.

However, I am now more than a little fed up paying the Letting Agency the continual commission plus VAT....and additionally the £72 every 6/12 months to renew the contract. My tenants equally pay the Letting Agency £72 every 6/12 months for the contract renewal.

Two of my long standing tenants are reaching the end of their 6/12 month contracts and I have informed the Letting Agency that I no longer wish to continue paying commission plus VAT for what is now merely an exercise in paying rent money received diirect from the tenants into my bank account.

Their initial response has been that I cannot do this. Would this be correct....or will I have to issue a Notice to Quit in order to be able to have new tenants on an Introductory Fee basis only...? Of course, I wouldn't evict my existing tenants..they don't deserve that, but I am very very unhappy with the Letting Agents initial response.

Any proper advice would be welcome.

 

[Renegade1]

Lets put this to bed

You need a 20% deposit minimum ideally 25%
The loan is based on the rental income of the property unless you try Barclays, Clydesdale or Furness who do it on overall income and expenditure
It is based on 125% or 145% x 5.5 % rental yield usually depending on your tax rate
It is not treated the same as a residential mortagage, ie income multiples of income
most lenders ask for a 25 k or at least 20 k personal income unless you try someone like aldermore, bm solutions, new street or the mortgage works who have no minimum income
most lenders need you to be a residential mortgage holder bar a few

I hope this helps

It's still awake.

1/Loan is based on the rental income? Therefore how is it decided the max you can borrow ?
Is it not salary add rental earnings x 4?

 

[DJ NOBO]

Just to possibly expand this thread.....I have one or two properties let out to tenants through a well known local Letting Agency.

I pay a commission each month on their rent of 8% plus VAT.

Some of my tenants have stayed with me for over 9 years, another 8 years and another 6 years. I like to think it is because I'm a reasonable Landlord and also the properties are kept in very good condition.

However, I am now more than a little fed up paying the Letting Agency the continual commission plus VAT....and additionally the £72 every 6/12 months to renew the contract. My tenants equally pay the Letting Agency £72 every 6/12 months for the contract renewal.

Two of my long standing tenants are reaching the end of their 6/12 month contracts and I have informed the Letting Agency that I no longer wish to continue paying commission plus VAT for what is now merely an exercise in paying rent money received diirect from the tenants into my bank account.

Their initial response has been that I cannot do this. Would this be correct....or will I have to issue a Notice to Quit in order to be able to have new tenants on an Introductory Fee basis only...? Of course, I wouldn't evict my existing tenants..they don't deserve that, but I am very very unhappy with the Letting Agents initial response.

Any proper advice would be welcome.

I don’t know the answer to your question but I do know they defend against this hard.


If it’s any consolation I pay 10% plus vat. At least it’s tax deductible

 

[Renegade1]

Just to possibly expand this thread.....I have one or two properties let out to tenants through a well known local Letting Agency.

I pay a commission each month on their rent of 8% plus VAT.

Some of my tenants have stayed with me for over 9 years, another 8 years and another 6 years. I like to think it is because I'm a reasonable Landlord and also the properties are kept in very good condition.

However, I am now more than a little fed up paying the Letting Agency the continual commission plus VAT....and additionally the £72 every 6/12 months to renew the contract. My tenants equally pay the Letting Agency £72 every 6/12 months for the contract renewal.

Two of my long standing tenants are reaching the end of their 6/12 month contracts and I have informed the Letting Agency that I no longer wish to continue paying commission plus VAT for what is now merely an exercise in paying rent money received diirect from the tenants into my bank account.

Their initial response has been that I cannot do this. Would this be correct....or will I have to issue a Notice to Quit in order to be able to have new tenants on an Introductory Fee basis only...? Of course, I wouldn't evict my existing tenants..they don't deserve that, but I am very very unhappy with the Letting Agents initial response.

Any proper advice would be welcome.

The only reason I can see to use a letting agency is for their insurance policy which pays you the rent if the tenant doesn't.Previously this wasn't available to a landlord however isn't it right that now you can get insurance?

 

[Weststander]

Just to possibly expand this thread.....I have one or two properties let out to tenants through a well known local Letting Agency.

I pay a commission each month on their rent of 8% plus VAT.

Some of my tenants have stayed with me for over 9 years, another 8 years and another 6 years. I like to think it is because I'm a reasonable Landlord and also the properties are kept in very good condition.

However, I am now more than a little fed up paying the Letting Agency the continual commission plus VAT....and additionally the £72 every 6/12 months to renew the contract. My tenants equally pay the Letting Agency £72 every 6/12 months for the contract renewal.

Two of my long standing tenants are reaching the end of their 6/12 month contracts and I have informed the Letting Agency that I no longer wish to continue paying commission plus VAT for what is now merely an exercise in paying rent money received diirect from the tenants into my bank account.

Their initial response has been that I cannot do this. Would this be correct....or will I have to issue a Notice to Quit in order to be able to have new tenants on an Introductory Fee basis only...? Of course, I wouldn't evict my existing tenants..they don't deserve that, but I am very very unhappy with the Letting Agents initial response.

Any proper advice would be welcome.

8% plus vat is a good deal from what I see all the time.

I’m not a lawyer, but I would guess that if they got you those tenants, you can’t do what you intend. I could be wrong.

 

[dazzer6666]

Just to possibly expand this thread.....I have one or two properties let out to tenants through a well known local Letting Agency.

I pay a commission each month on their rent of 8% plus VAT.

Some of my tenants have stayed with me for over 9 years, another 8 years and another 6 years. I like to think it is because I'm a reasonable Landlord and also the properties are kept in very good condition.

However, I am now more than a little fed up paying the Letting Agency the continual commission plus VAT....and additionally the £72 every 6/12 months to renew the contract. My tenants equally pay the Letting Agency £72 every 6/12 months for the contract renewal.

Two of my long standing tenants are reaching the end of their 6/12 month contracts and I have informed the Letting Agency that I no longer wish to continue paying commission plus VAT for what is now merely an exercise in paying rent money received diirect from the tenants into my bank account.

Their initial response has been that I cannot do this. Would this be correct....or will I have to issue a Notice to Quit in order to be able to have new tenants on an Introductory Fee basis only...? Of course, I wouldn't evict my existing tenants..they don't deserve that, but I am very very unhappy with the Letting Agents initial response.

Any proper advice would be welcome.

Useful reading here....

https://www.landlords.org.uk/forum-topic/terminating-agency-contract

 

[cjd]

Useful reading here....

https://www.landlords.org.uk/forum-topic/terminating-agency-contract

Thank you very much for that information. As always there is rarely a straightforward answer, but I'm feeling optimistic about further negotiations with the Letting Agents .

 

[Shropshire Seagull]

I wonder how likely it would be that you would get caught if you didn't declare your rental income.
Especially if the property you rented was abroad.If you transferred the rent money to a UK bank
and then sold the property and didn't declare it.I wonder what are the chances with so many
cases the tax office have to deal with.

HMRC [previously Inland Revenue] have been catching tax dodgers for hundreds of years - there aren't may "tricks" they've not come across before.

Having worked on HMRC IT systems significantly over the years [and being careful here not to breach the OSA] HMRC has an International Exchange of Information with tax collection organisations in most countries all over the world. If you bought a property in another country, that country's tax authority would know about it. The equivalent of PAYE and CGT will be of interest to them, but if you remain a UK Tax Domicile, they will simply share your international affairs with HMRC - HMRC WILL KNOW.

You may think you have got away with something but HMRC assign investigators based on possible yield return. There are a finite number of investigators so they go for the bigger fish first. But remember they can go back seven years in most cases, so just when you think you've been getting ways with a tax dodge for 6 years, you get a ding-dong at your door an Mr HMRC wants a chat.

There is a system within HMRC that also captures data form an absolute plethora of sources [not just international] - e.g. data from the CAA's Aircraft Register, DVLA for vintage, veteran and rare cars, HM Land Registry, for just a few examples. Now, when your name suddenly crops up as owning a new valuable asset, HMRC will look at your declared income to assess whether your could afford it. If its out of your £££ league, you've either nicked it or been given it as a present and they'll likely want to have a chat with you.

Everyone thinks HMRC are stupid, trust me they're a lot smarter and savvy than most folk give them credit for, and there is significant "big-brother" going on - cheat them at your peril.

 

[Renegade1]

HMRC [previously Inland Revenue] have been catching tax dodgers for hundreds of years - there aren't may "tricks" they've not come across before.

Having worked on HMRC IT systems significantly over the years [and being careful here not to breach the OSA] HMRC has an International Exchange of Information with tax collection organisations in most countries all over the world. If you bought a property in another country, that [/B]country's tax authority would know about it. The equivalent of PAYE and CGT will be of interest to them, but if you remain a UK Tax Domicile, they will simply share your international affairs with HMRC - HMRC WILL KNOW.

You may think you have got away with something but HMRC assign investigators based on possible yield return. There are a finite number of investigators so they go for the bigger fish first. But remember they can go back seven years in most cases, so just when you think you've been getting ways with a tax dodge for 6 years, you get a ding-dong at your door an Mr HMRC wants a chat.

There is a system within HMRC that also captures data form an absolute plethora of sources [not just international] - e.g. data from the CAA's Aircraft Register, DVLA for vintage, veteran and rare cars, HM Land Registry, for just a few examples. Now, when your name suddenly crops up as owning a new valuable asset, HMRC will look at your declared income to assess whether your could afford it. If its out of your £££ league, you've either nicked it or been given it as a present and they'll likely want to have a chat with you.

Everyone thinks HMRC are stupid, trust me they're a lot smarter and savvy than most folk give them credit for, and there is significant "big-brother" going on - cheat them at your peril.

The country I had property in is tax free.

I guess you have to be careful not to splash the cash on luxury goods etc.Just spread it around carefully.

 

[Shropshire Seagull]

The country I had property in is tax free.

I guess you have to be careful not to splash the cash on luxury goods etc.Just spread it around carefully.

Please name that country.

 

[Shropshire Seagull]

Loan is based on the rental income? Therefore how is it decided the max you can borrow ?
Is it not salary add rental earnings x 4?

You've either not read, or not understood previous posts that have explained this.
Please look again at #59, #62, #66, #228, #231, #249, #254, #258, #263, #267 and again on #321

 

[Weststander]

HMRC [previously Inland Revenue] have been catching tax dodgers for hundreds of years - there aren't may "tricks" they've not come across before.

Having worked on HMRC IT systems significantly over the years [and being careful here not to breach the OSA] HMRC has an International Exchange of Information with tax collection organisations in most countries all over the world. If you bought a property in another country, that country's tax authority would know about it. The equivalent of PAYE and CGT will be of interest to them, but if you remain a UK Tax Domicile, they will simply share your international affairs with HMRC - HMRC WILL KNOW.

You may think you have got away with something but HMRC assign investigators based on possible yield return. There are a finite number of investigators so they go for the bigger fish first. But remember they can go back seven years in most cases, so just when you think you've been getting ways with a tax dodge for 6 years, you get a ding-dong at your door an Mr HMRC wants a chat.

There is a system within HMRC that also captures data form an absolute plethora of sources [not just international] - e.g. data from the CAA's Aircraft Register, DVLA for vintage, veteran and rare cars, HM Land Registry, for just a few examples. Now, when your name suddenly crops up as owning a new valuable asset, HMRC will look at your declared income to assess whether your could afford it. If its out of your £££ league, you've either nicked it or been given it as a present and they'll likely want to have a chat with you.

Everyone thinks HMRC are stupid, trust me they're a lot smarter and savvy than most folk give them credit for, and there is significant "big-brother" going on - cheat them at your peril.

Spot on. Know of a local businessman (retail with some cash takings) who bought an investment property in France. A long story, but the tax authorities of 3 countries worked together, and he was unable to prove that it hadn’t been paid for from undeclared cash in the UK. He lied all the way through. The tax and penalties bill was significant.

HMRC have reversed years of staff cuts, to hugely increase the numbers in task forces etc tackling tax fraud, evasion, tax schemes and ‘errors’. Contrary to ill informed whinging, this very much includes investigating the wealthy and non-small businesses.

They can and do extend enquiries back 20 years once they have something.

 

[Triggaaar]

Two of my long standing tenants are reaching the end of their 6/12 month contracts and I have informed the Letting Agency that I no longer wish to continue paying commission plus VAT for what is now merely an exercise in paying rent money received diirect from the tenants into my bank account.

Their initial response has been that I cannot do this. Would this be correct....or will I have to issue a Notice to Quit in order to be able to have new tenants on an Introductory Fee basis only...?

What does your contract say? I've used agents to find tenants before, but never paid the monthly commission as I think it's a rip-off.

1/Loan is based on the rental income? Therefore how is it decided the max you can borrow ?
Is it not salary add rental earnings x 4?

Are you kidding? I've answered this a couple of times already, as have others.

 

[Renegade1]

Please name that country.

Dubai