First time buyers who want to invest in a buy-to-let property now have another option in terms of lender as Barclays now provides the option, joining Natwest and some building societies.
According to Barclays, by providing this possibility to first time buyers, they are enabling those in London for example, to purchase property in less expensive areas, providing an entry point on to the property ladder.
Natwest is the other major lender offering buy-to-let mortgages for first time buyers, with the caveat that the rent that will be expected to be earned must meet 5.5% of 135% of the value of the property.
Some smaller lenders also offer the same type of loans, including Clydesdale Bank and Vida Homeloans.
Be aware however, that the government's new exemption from stamp duty for first time buyers does not apply to buy-to-let purchases, even for first time buyers.
First time buyers who plan to live in the purchased property will pay no stamp duty on properties worth under £300,000, meaning that if the same property were purchased as a buy-to-let, £5,000 of tax would would be payable (Sam Meadows, Telegraph, December 2017).
There is also the issue of the fact that should those who have purchased a buy-to-let property decide to purchase their own home to live in, they will need to pay a 3 percentage point surcharge as the home will be considered an "additional property".
Keep the above factors in mind when deciding whether this type of mortgage is right for you.
Our Mortgage team here at Westminster Wealth can ensure that you receive the most suitable mortgage for your personal circumstances, needs and objectives. Contact us today.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Our charges are usually between £395 and £995 depending on the type and amount of borrowing required and individual circumstances.
Barclays is the latest lender to encourage first-time buyers into buy-to-let