Is it possible to purchase a high value property on a Buy To Let?

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    Is it possible to purchase a high value property on a Buy To Let?

    I have been looking for investment property local to where I run my business, which is also where I live. Its more beneficial to live where I work, therefore I have no intention to move.

    I already have a portfolio of rental property, but they are out of my area, and I am now looking to invest locally. Some of the property are in the region of 600k that I have looked at, and I have the 25% deposit if not more. I am looking at investing locally due to the demand for our area being high, that the property values are going up at a reasonable value too.

    My mortgage advisor tells me that banks wouldn't look at high value property, even if I was to put a large enough deposit, so that the rental would cover their minimum required rental for the size of the mortgage we would require.

    Is this normally the case? Or do lenders just look at the deposit, to ensure its a minimum 25%, that my income meets their minimum (usually 25k) and that the rental (based on their calculations) covers the minimum they require it to be for the mortgage?

    #2
    Perhaps it would be better to approach the banks direct and discuss your mortgage requirement with Loans Manager at Nat West Commercial and Barclays

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      #3
      I haven’t so much twaddle as alleged to have been uttered by a Mortgage Broker , he clearly seems not sufficiently experienced in such types of borrowing.
      I think in fairness that he might be fearing that you might be intending to try and acquire a res property on an Interest only basis compared to a conventional Regulated mortgage involving a Capital & Interest Loan. It all comes down to the lenders mantra of Plausibility and Credibility.
      Clearly the economics of acquiring a high asset property to be Let is against you given that the yield is almost non existent ; it only works where the LtV is linked to the validated rent as a single family unit and where the mortgagor accepts that the return on capital is going to be modest, it might work better by acquiring through a Ltd Co using a 5 year fix where the rental is assessed using the Pay Rate rather than the usual Stress Rate of 4.5%. With rates as low as 2.98% this might help in minimising the amount of deposit.
      Best of luck going forward.

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        #4
        Before you approach any lender for BTL mortgage loan, you should check with 3 local letting /estate agents for the "waiting period" for finding a tenant for a 1 bed flat, 2 bed flat , 3 bed house and 4 bed house.

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