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Considering investing in a buy-to-let?

By in landlords with 0 Comments

Considering a buy-to-let investment property?

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Is buy-to-let the best way to invest your hard-earned cash? Maybe you’d be better off investing in stocks and shares, but then what will be the financial implications of Brexit upon the stock market in the near future? Put your money in the bank, then?

Maybe…but savings rates are currently offering low returns, so investing in buy-to-let property does look like an attractive investment if you are in a position to raise a large deposit.

At the moment, the property market is finally beginning to get back on its feet and mortgage rates are at record lows, which are both very tempting factors, however, there again, those rates are going to rise at some point, and a tax rise is coming, as buy-to-let mortgage interest relief is axed and replaced with 20 per cent tax credit.

As with any investment, there are pitfalls as well as profits to be made in the residential lettings market, so you’re going to need to ensure you’re as informed as you can be before making that bid at the local auction house and buying your first buy-to-let property.


Do lots of research and consider just how robust your finances– and your spirits- are. Always bear in mind that investing in a property to let means that your capital will be tied up- probably for a period of years, and there is a chance, although it is unlikely, that your rental home may fall in value.


  1. Where is the best area to invest in a property to let in the Carlisle area?

Have a look through the property auction handbook and do a few background checks of your own before you even view any property you may spot in there.

Walk down the street: look at the neighboring properties, consider the parking implications….is it on a ‘bus route, or within walking distance of any shops? How about proximity to decent schools or access to the motorway to commute to work?


Your prospective tenants are going to be considering these kinds of issues when they are choosing a property to let from you. It’s worthwhile doing some research into the statistics from each area you’re considering on the computer: see what the crime rates are in the area.

 Find out what properties in that area, similar to the one you’re considering, have sold for in recent history –that will give you a good idea of the real value of the property you are considering purchasing. We always recommend all savvy buy-to-let landlords do these kinds of checks on prospective investments.

Where would we recommend you invest?

Well, we find that if you invest in property north of the river in Carlisle you have a very good chance of letting your property quickly. Family homes within the catchment areas of the excellent schools at Stanwix and Kingmoor are very desirable to families with primary school aged children, and easy access to junction 44 of the M6 is also an attraction for many working families. Add to that the great variety of supermarkets and a retail park, and there is plenty to keep everyone happy.

Closer to Carlisle city centre, we find that Dentonholme is always popular. Here there is a good range of local shops, takeaways and coffee shops, and you are walking distance from the city centre and railway. We have also found that homes for rent in Morton and Currock are also popular areas for tenants’ enquiries.


  1. What rent is your buy-to-let property likely to generate?

Here’s your crucial question: you’re going to need to weigh up the cost of the investment property against the rent it’s likely to make in return for your investment. You’re going to need to be super-realistic here- look at the statistics for rentals in the same area.

Remember that you can always get in touch with us to discuss rental valuations for any property which may interest you in the Carlisle area- we’re always happy to share our local knowledge and expertise free of charge.

Buy-to-let mortgages

You’ll probably be looking to purchase your rental property with a buy-to-let mortgage. So it’s worth exploring the different products available to you on the market before you commit to a deal- bear in mind that the best rate buy-to-let mortgages also tend to come with large arrangement fees.

Buy-to-let lenders typically want  the rent to cover 125 per cent of the mortgage repayments – often now 150 per cent – and most  now demand 25 per cent deposits, or even larger, for rates considerably above residential mortgage deals.


Current best buy-to-let mortgages as advised by

The cheapest buy-to-let mortgage rates are on two year fixes and for those with a big deposit they are as low as 1.40 per cent from Sainsbury’s and 1.44 per cent from Leeds Building Society.

A five-year fix may be a more sensible plan for many landlords, however, and the keenest rate here is The Mortgage Works 1.99 per cent deal.

Those are low loan-to-value mortgages, however, and if you only have 25 per cent to put down the top two-year fix is 1.51 per cent from Accord and the top five-year fix is 2.46 per cent also from Accord.

Beware big fees though, the deals mentioned above come with charges up to £2,500.

Get advice from a good independent broker suggests that a good independent broker will be a great help and can point you towards deals you will actually secure-it’s always best to seek out expert advice rather than just going into your local bank and asking for a buy-to-let mortgage. Make sure you still carry out your own research though, so you understand the different kinds of products on the market.

The buy-to-let mortgage you will be offered depends on your circumstances and the lender’s criteria. Ideally, they prefer bigger deposits, strong rent to mortgage payments cover and healthy earnings elsewhere.

For further advice if you are considering purchasing  buy-to-let property in the Carlisle area then just complete our contact form, or give us a ring- we’ll be very happy to talk over your ideas and make recommendations. I will also be writing further blogs on this subject.

 Happy house-hunting!

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