View more on these topics

Woolwich buy to seizes on increase in private renting

Woolwich has introduced a five-year fixed rate buy to let mortgage to capitalise on the steady increase in private renting.

Private renting has been growing since the 1990s as a result of changes in working patterns, particularly as contract working has become more popular.

The mortgage is fixed at 7.29 per cent until April 1, 2006 and is available on loans of up to 75 per cent of valuation. If borrowers redeem within the fixed rate period, they will have to pay six months interest. Any number of properties can be bought, as long as they do not exceed £25m. This is the highest on the market as most mortgages usually limit the amount to between £500,000 and £1m.

According to Moneyfacts on January 4, 2000, Chelsea Building Society also has a five-year fixed rate buy to let mortgage at the same rate, but its maximum loan to valuation is lower at 60 per cent. It also limits the number of properties that can be bought – five properties up to a total of £500,000.

However, the most expensive properties are the most difficult to rent and consequently do not provide as much rental yield as cheaper properties. Most prospective landlords would not need to go up to £25m and might prefer to go for a flexible mortgage that has a lower five-year fixed rate.

Recommended

Neville James harnesses teps and zeros

Ball says: “It is a flexible commission. However I would prefer a basic inbuilt commission which could be rebated to clients as considered appropriate, rather than a discretionary charge of up to five per cent.”Stevens says: “The commission is very flexible so that the IFA can set their own level. We would be likely to […]

Reducing costs is the year&#39s big challenge for providers

The key issue coming up is, of course, the launch of stakeholder. This,and the move to 1 per cent margins, will be a real catalyst in the industry. There will be substantial competition as companies aim to take the market share and inevitably we will see more consolidation. I hope this year we will actually […]

Liverpool Vic buys up Permanent for £150m

Liverpool Victoria has ended speculation over the future of Equitable Life&#39s specialist protection subsidiary Permanent Insurance by snapping it up in a £150m deal. Since the decision by Permanent&#39s parent company to close its doors to new business last month, the future of the protection provider has been unclear. The £150m deal with Liverpool Vic […]

Pinnacle bond pins hopes on Nasdaq

The protected bonus bond from Pinnacle Insurance is a single premium bond that is designed for investors who usually opt for building society accounts.The bond is linked to the performance of the Nasdaq 100 index over a five-year term through the Pinnacle protected bonus bond fund.Investors will get their original capital return plus up to […]

Inheritance tax – How to declare and who pays

By Kim Jarvis, Canada Life In this article we look at which forms personal representatives (PRs) need to complete and who actually pays the tax. To recap, under current rules, any part of the estate that falls within the available nil-rate band (NRB), currently £325,000, is taxed at zero. Anything in excess of the NRB is […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment