Dear Clients & our website visitors,
this month one of the best financial advisors in Aberdeenshire provided us with an insight of the current mortgage market trends :

With interest rates being low now is a great time to look at buying to let. Due to low savings rates many people are now looking at alternative options to try and give them better returns. Interest rates on Buy to Let mortgages have reduced significantly in the last couple of years and recent demand for let properties has seen rental incomes increase. Some clients are interested in buying in the hope that property values will rise over the medium to longer term. Other clients are drawn to property because of the excellent yield that can be obtained on the rental income. If people are buying property this increased demand usually leads to rising house prices and if people are not buying it usually means that they are looking to rent meaning demand for leasing increases.

Most lenders are currently looking for around a 25% deposit on Buy to Let mortgages. Experianced landlords can obtain up to 80% although the interest rates are less attractive. Most lenders are looking for clients that earn over £20,000 per annum however some lenders such as The Mortgage Works do not have any minimum income requirements. With Buy to Let mortgages the lenders usually assess the projected rental income and the mortgage amount is usually based around this.

Phil Anderson,

Phil Anderson Financial Services offer independent mortgage advice on all aspects of Buy to Let mortgages and offer a free initial consultation to clients of Solaris Properties, for more details contact Phil on 07793283435 or Email phil@philandersonfinancial.co.uk

This month an experienced Accountant, Mrs Sue Grosvenor shared sound advice & tips for our property investors :

Expenses and allowances on income from UK Property

If you let out property you can deduct certain expenses and tax allowances from your rental income to work out your taxable profit (or loss). If you have several UK residential lettings you pool the income and expenses together.

Allowable expenses
The expenses you can deduct from letting income include:
• letting agent’s fees
• legal fees for lets of a year or less, or for renewing a lease for less than 50 years
• accountant’s fees
• buildings and contents insurance
• interest on property loans
• maintenance and repairs to the property (but not improvements)
• utility bills (like gas, water, electricity)
• rent, ground rent, service charges
• Council Tax
• services you pay for, like cleaning or gardening
• other direct costs of letting the property, like phone calls, stationery, advertising

If you’re running a small business, often the accounts side is an area that you don’t have enough knowledge or experience in and it becomes a time consuming burden. We’re here to offer you whatever help you need with your book-keeping and administration.

Many thanks to Sue for this article on behalf of Solaris Properties, – and if you don’t have a book keeper then now would be a good time to get one! For details of this service please contact Sue Grosvenor at SGG Business Services on 07710528171 or visit our website at www.accountsandadmin.co.uk, email sue@accountsandadmin.co.uk

Peterhead and Fraserburgh north of Aberdeen city offer opportunities yielding a good rental return for the landlords:

One of our clients recently purchased an entry level bedsit property for 20k, – it took only 4 days to rent out this property for £275 per month,- such is the demand for entry level accommodation in Fraserburgh area at the moment.

Although this is a one off impressive example of a rental return to financing & cost to buy ratio we are confident that the two towns can offer good opportunities for property Investor:

Average rents for Peterhead
One bedroom flats up to £425 depending on the area, two beds around £475 up to £575, three bedroom homes from £600 to £675

Average rents for Fraserburgh
One bedroom flats up to £375 depending on the area, two beds around £425 up to £525, three bedroom homes from £575 to £625, – rents tend to be lower than in Peterhead, however the property market is more affordable.

Furnished or Unfurnished?
There is a higher proportion of furnished requirements because most prospective tenants do not have their own furniture, fully furnished properties tend to yield £25 to £50 per month more too, however more executive properties are best unfurnished.

What sort of properties are letting most easily?

At the entry level of market there has been an influx of people looking for one bed or studio apartments that come fully furnished to a decent standard as these properties have lower running costs.

Demand is currently outstripping supply both in Peterhead and Fraserburgh, especially with Landlords reluctant to add to their portfolios due to banks not willing to back up an investor. In our opinion demand for rental accommodation will remain high until next year’s summer when fishing season reduces.