UK Money News
27th February 2008
Buy-to-let 'demands balanced approach'
Mortgage-holders looking to invest in buy-to-let schemes should take care to ensure they balance their revenues and outgoings to maximise their returns.
Peter O'Donovan, mortgage manager at Bestinvest, said that taking into account rental calculations, tax payments and the cost of a mortgage were the key factors.
He also advised investors to mix up their holdings, taking both large and small mortgages.
"In my experience people with portfolios have some properties that have got a small mortgage and some that have a large one. Different lenders sell different types of products for these people," he explained.
"They utilise properties that have got a smaller mortgage and aggregate the rental calculation over the whole portfolio rather than over one property.
"So the properties with less mortgage left to pay can maybe be used to borrow more than the normal 85 per cent to make a new purchase. In that way, people with portfolios are usually able to utilise that portfolio to help them with further purchases."
According to a survey by the Council of Mortgage Lenders, buy-to-let lending totalled £24.1 billion in the second half of 2007, up from £21.2 billion in the first half of the year.
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