Compare Buy-To-Let Mortgage Deals

By R Rama
Buy-to-let mortgages are gaining popularity in the UK because of many reasons, the prime reason being that it has developed as a viable business option for many people.
Statistics show that borrowers availing buy-to-let mortgages have increased recently. According to, Datamonitor, in the second half of 2002, gross buy-to-let lending totalled GBP6.7bn compared to GBP4.1bn in the second half of 2001. In spite of the growth of such mortgages, experts opine that it is not a good investment solution for people. On the other hand, some experts also opine that it is not good as a single investment option, but can be considered as a constituent of a portfolio. However, in spite of future projections, people are considering this type of mortgages in large numbers.

In such mortgages, a lender provides the money in order to make returns when the property is rented out to a tenant by the borrower. The concept of them has gained popularity over the years because of the rising costs of residential properties. With the rising costs of real estate and its rentals, buy-to-let mortgages have also become popular with entrepreneurs. The returns, in terms of rent, that is generated from the property can provide a steady stream of income. Along with the growth of the residential area in which the property is located, the appreciation of the property will also increase. This in turn will fetch more rent for the landlord in future. This will also add the equity value of the house.

The Inland Revenue is believed to be considering allowing people to invest in residential property using a self-invested personal pension (Sipp). The money in Sipp may be used to invest in commercial property such that the rental income is directed back into the fund. The funds however, may have to be used to buy annuity.

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