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 Buy to let mortgages are not difficult to understand. They are specifically designed for rental properties, where owner of the property cannot be an occupier. Certain requirements have to be fulfilled, before lenders will consider an application.

1) Rental income must be sufficient enough to cover mortgage payments, with majority expecting cover of 125%. There are lenders who accept less rental cover if borrowers are high earners.
2) Landlords are expected to put down at least 15% and in the current market 25% is almost a standard.
3) Borrowers own income must be at least of £20,000 as they are expected to cover mortgage payments when property is unoccupied.
4) Most lenders expect that property will be let out on a Shorthold Tenancy Agreement, to avoid sitting tenants should they reposes.
5) Landlords are expected to comply with current rules and legislations, as foe example furniture standards and licensing in case of multiple occupations.

      Previously buy to let mortgage were expensive and inflexible and were mainly used by professional landlords.
In the last few years, interest rates almost levelled with those of the residential mortgages and we have seen more and more amateur landlords entering the market. Buy to let mortgages became more affordable and easier to get.
Due to uncertainty on the stock market and rapidly growing house prices, many investors turned to “brick and mortar” as a safer bet.
Our mentality has changed as well at became almost fashionable to be a landlord, but also we have seen a strong demand for rental properties due to lifestyle changes. Younger people don’t want to stay with their parents , more people are finding jobs away from home , graduates are unable to step in the property ladder due to huge debt and a luck of deposit and foreign workers coming into UK-all are quite happy to rent, creating demand for rental properties.
However, based on the assumption, that property prices will continue to grow and strong demand, some areas became oversupplied with flats. Lenders are quite aware of the situation and are getting more cautious on their decision making. If you think you are getting a bargain, be careful, it may be for a reason, as it is more difficult to obtain a buy-to-let mortgage for those flats and a deposit expected to be in the region of 25%.

      Despite all of the above it is still possible to find a good buy-to-let mortgage deal as many believe in the promising future for buy-to-lets.
If you are just starting out: don’t expect a quick return , do your research, study your customers and know the areas you are buying in and you should be able to fly high.