Are you looking to invest in property?

Unlike buying a home to live in for you and your family, buying an investment property has a slightly different process surrounding its purchase.

Luckily, our team at Andrew & Andrew can help.

At Andrew & Andrew, our conveyancing solicitors Emsworth have helped many of our clients buy their first investment property and build up their portfolios, ensuring that they have the legal know-how for being a landlord in compliance with UK Law.

In this brief article, our conveyancing solicitors Emsworth provide a guide on the process that surrounds the purchase of a buy-to-let property.

What is buy-to-let conveyancing?

According to our conveyancing solicitors Emsworth, there are two paths that buy-to-let conveyancing can take.

The first and most common is that you purchase a property outright intending to rent it out. The second is that you move out of a property that you own to then begin renting it to others.

In this article, we will focus on the first example and so, the buy-to-let conveyancing process begins when your offer on a property is accepted and ends when you receive the keys. For this, our team will support you every step of the way, offering advice and providing help with paperwork.

The conveyancing process

Once the offer on the property is accepted, you will need to instruct our team on the next steps. After this, we will begin our searches on the property, raise enquiries and check any initial contracts.

We will also check whether there are any restrictions on renting the property in the future; we will advise you on tax implications, building planning and environmental law at this stage, as it is important to have this figured out as soon as possible in the conveyancing process.

We will also advise you on which is the most suitable mortgage type for purchasing the property in question, which is typically a buy-to-let mortgage, which contains different rules and regulations than a standard residential mortgage.

Then, our team will liaise with the seller’s legal team and rewrite or edit the contracts as needed, and then we can agree on a completion date. This entire process can take between 3-6 months on average, but depending on paperwork and other areas, it may take longer.

Buy-to-let mortgage

A buy-to-let mortgage typically covers more than just the cost of the property.

It also includes things such as costs for building insurance, any repairs that are needed before the property can be rented and letting agents fees if you want a third party to manage your property on your behalf.

There are some key differences between a buy-to-let mortgage and a residential one, such as;

  • Buy-to-let mortgages are based on how much rent the property can generate; lenders often want your monthly rental to meet 125% or more than the monthly interest payments.
  • They often require a minimum salary, such as £25,000 or more.
  • Interest rates are higher due to the added risk involved.
  • The minimum deposit is also higher, usually 20-25% of the purchase price.
  • Arrangement fees are also usually higher with buy-to-let mortgages