Buy To Let Mortgages
Investing in property has a long tradition in Britain. Buy to let mortgages enable you to finance investment in property, using the rental income to pay the interest costs and enjoying the benefits of house price growth over time. However, this strategy can be risky for a number of reasons which should be understood and accepted before buying an investment property.

A second property is a significant asset but also a significant liability. It can need expensive repair, it could go un-rented for significant periods and it could even cause legal liability if people were injured as a result of the property. A property investment is not particularly tax efficient as rental income is taxable and a property normally can't make use of annual Capital Gains Tax exemptions and ISA wrappers.
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Despite all these downsides, a buy to let property investment can provide strong long term growth with relatively low outlay for those who buy and sell at the right time.
Property
Investment Risk -
Safe as Houses?
We British are often guilty of underestimating the risk and volatility of the property market. In fact the risks on the property market can be very significant.

For comparison, this graph compares the movements of the property market to the stock market. In blue is the RPI-adjusted average house price from 1975 to 2013. In red is an RPI-adjusted investment of the same value made on the FTSE100 when it began in 1984. You can see that whilst the FTSE100 is more volatile, the housing market shows significant volatility also.
Sources : Office of National Statistics (RPI Index), Nationwide Building Society (House Prices) and Yahoo! Finance (FTSE100)
Buying an investment property using a mortgage is riskier - by borrowing to invest you multiply the risk and volatility of the asset.
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This is a significant factor in the risk involved with buy-to let properties.

For example if you buy a £100,000 property with a £80,000 buy-to-let mortgage, the market would only need to fall 20% for you to lose 100% of your invested capital. Hence in this example the loss is "geared" by a multiple of five. Gains made would of course be similarly amplified.
Investment Gearing
Understand the risks and want to proceed?
Whether you're an experienced landlord, a property investor or just taking your first steps toward this goal, we can assess your needs and recommend the most suitable solution from the whole of the market.
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