RLA : RPI : Buy to let guidance

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the February / March 2000 issue

Buy to let guidance - February / March 2000

A warning to be aware of the safety regulations that apply to rented property and to have contingency plans in place to cope with periods when a property remains unoccupied are among a 27 point checklist that has been published for buy to let landlords.

Thinking of buying a residential property to let? can be obtained by sending an A5 stamped addressed envelope to the Council of Mortgage Lenders, one of the seven bodies behind the checklist, whose address is 3 Savile Row, London W1X 1AF. Other 'lending, lettings and property management' representative bodies involved include the British Property Federation, the National Association of Estate Agents, and the Royal Institution of Chartered Surveyors.

The CML has also produced its own 'more detailed' guide, Buying to let.

Among other things this advises that, 'as a guide your lender will expect your monthly rental income to be 25 per cent to 50 per cent greater than your monthly mortgage payments'.

A survey of 43 CML lenders suggests that there are now 44,000 outstanding buy to let mortgages in the country, having a gross value of £3.2bn. In all 9,000 loans totalling £700m were advanced in the second quarter of 1999, 1,000 and £100m down, respectively, on the first quarter.

Loans were within the 75 per cent to 85 per cent of value range, with rental income cover of mortgage costs running at between 110 per cent and 150 per cent. At 30 June only half of 1 per cent of buy to let loans were more than three months in arrears.

other artilces from the February / March 2000 issue