It’s often said that investing in property is one of the most reliable sources of investment, because it not only earns you a regular income but can increase in capital value over the years.
Buying to let can be an attractive option when you have a lump sum available which is unlikely to earn a comparable amount of income from other types of investment, such as savings accounts.
You may have decided to take the plunge and invest in a buy to let property for the first time or you may be an experienced buy to let purchaser who simply wants to add to your portfolio.
Unlike buying a residential property, however, a buy to let property comes with its own challenges. Here, at hpjv solicitors, we can provide you with the legal assistance necessary to complete your transaction successfully and without stress.
Get in touch with our highly experienced buy to let solicitors in Cardiff, Newport or Chepstow today by giving us a call at our offices or completing the enquiry form to the right of the page.
What our buy to let solicitors in Cardiff, Newport and Chepstow can do for you
Our professional, friendly and approachable Conveyancing Team have helped many clients, over the years, in purchasing buy to let investment properties.
It is a sign of our success that many of our clients who took that first, tentative plunge, continue to come back to us time and time again when they are able to increase their property portfolios.
Whether you are a first-time buy to let purchaser or a seasoned purchaser of such properties, our aim is to make the whole process as straightforward and stress-free as possible, working at all times to your timescale.
If you decide to instruct us, you will benefit from:
- Competitive fixed fees with no hidden costs
- Our extensive experience of working with buy to let mortgage lenders
- Our access to cutting edge software to progress your matter efficiently
- Clear jargon-free advice
- Regular up dates by phone or e-mail
- A friendly, professional, and, reliable service
- We are accredited members of the Law Society’s Quality Conveyancing Scheme
- Contact us today and we will be happy to speak to you about how we can help you through the process of purchasing your buy to let or investment property.
Buy to let FAQs
Are buy to lets good investments?
With the private rental sector growing faster than any other housing tenure, the market for buy to lets in booming. Depending on the property you choose and the mortgage you get, it may be possible to obtain a rental yield of 5-10%.
Of course, there are risks involved, including the rise and fall of property prices and demand, the chances of tenants becoming unable to pay their rent, and the costs of maintaining the property.
Choosing the right buy to let property can heavily affect the success of your investment, and important factors to consider include:
- Location – things like nearby schools, shops, universities, and transport links can make a property more desirable
- Age of building – older buildings will probably require more maintenance and listed buildings may restrict you making improvements
- Fixtures and fittings – a property with a modern kitchen and bathroom will attract a higher rent. Decent water and electricity fittings will also keep maintenance costs down
- Type of building – this might influence the type of tenant you get. For example, a house with a garden is more likely to attract a family
How do buy to let mortgages work?
Buy to let mortgages work slightly differently to normal mortgages because lender see buy to lets as riskier than traditional house purchases. Important differences include:
- The fees on buy to let mortgages tend to be higher
- You’ll likely need a bigger deposit for buy to let mortgages – about 20-40% versus 5-10% required for normal mortgages
- The interest rates on buy to let mortgages tend to be higher
- Buy to let mortgages are generally not regulated by the Financial Conduct Authority
Can you invest in a buy to let as a first time buyer?
It’s not impossible to invest in a buy to let as a first time buyer, however, many lenders will choose not to as they perceive it as riskier. Most lenders will consider your situation on an individual basis, for example, they will take into account the amount of deposit you can pay (the higher the better).
Other options include purchasing the buy to let jointly with someone else or taking out a guarantor mortgage.
What is the Stamp Duty on buy to lets?
Stamp Duty Land Tax (in England) or Land Transaction Tax (in Wales) is payable on all buy to lets.
The current buy to let rate is 3% above the standard Stamp Duty rates for properties over £40,000.
In both England and Wales, first time buyers purchasing buy to lets are not exempt from tax but pay it on the same rates as a standard home buyer (avoiding the surcharge). The buy to let tax for owners who have owned property before applies as follows:
Stamp Duty Land Tax
Buy to let Stamp Duty rate
£0 to £40,000
£0 to £125,000
£125,001 to £250,000
£250,001 to £925,000
£925,001 to £1.5 million
£1.5 million +
For example, for a property valued at £300,000, Stamp Duty will apply as follows:
- First £125,000 – 3% (£3,750)
- Second £125,000 – 5% (£6,250)
- Final £50,000 – 8% (£4,000)
- In total, Stamp Duty is £14,000
Land Transaction Tax
Buy to Let Land Transaction Tax rate
£0 to £40,000
£0 to £180,000
£180,001 to £250,000
£250,001 to £450,000
£450,001 to £750,000
£750,001 to £1.5 million
£1.5 million +
For example, for a property valued at £300,000, Land Transaction Tax will apply as follows:
- First £180,000 – 3% (£5,400)
- Second £70,000 – 6.5% (£4,550)
- Final £50,000 – 8% (£4,000)
- In total, Land Transaction Tax is £13,950
What is buy to let home insurance?
Buy to let insurance isn’t compulsory but can protect you from issues such as loss of rent, costs of rehousing your tenant (for example, if the property is damaged and becomes uninhabitable), damaged contents, and the costs of rebuilding or repairing (for example, due to fire or flood).
If you have any standard buildings or contents insurance on the property prior to taking out buy to let insurance, these policies may be invalidated. We can provide comprehensive advice regarding insurance and how best to protect your investment.
When do you pay Capital Gains Tax on a buy to let?
If you make a profit when selling your buy to let property you must pay Capital Gains Tax. Exceptions to this include where you gift the property to your spouse, civil partner or to a charity or where the property was occupied by a dependant relative.
Why choose hpjv’s buy to let solicitors?
At hpjv, we recognise that quality, efficiency, and accuracy are the hallmarks of an exceptional conveyancing service. Our buy to let conveyancing solicitors strive to deliver the highest standards of legal advice and representation to ensure your conveyance proceeds as smoothly and painlessly as possible.
We combine innovative ideas and thorough attention to detail to provide you with a fully comprehensive buy to let conveyancing service, whether you are a first time buyer or seasoned landlord. We can provide extensive advice at every step of the process, from helping you buy to let, to going through your financing options, advising on Stamp Duty, and advising on your responsibilities and legal duties as a landlord.
Our Conveyancing Team is recognised by the Law Society for our expertise with the Conveyancing Quality Scheme Accreditation.
We are also accredited in Lexcel for our excellent client care and legal practice management.
Hpjv is independently regulated by the Solicitors Regulation Authority (SRA).