100 percent LTV for Students to invest into Buy to LetThursday 15th , November 2012

Student Haven has access to a lender which enables students to invest into a buy to let property worth up to £250,000 with NO DEPOSIT.  What’s more, the lender is offering a 0.25% discount off their standard variable rate for the first 2 years.

This is a genuine product with a very credible and established lender too.  There is criteria involved, the key principles of which we have outlined below.

Who can apply for this mortgage? 

The mortgage is available to students in Higher Education throughout England and Wales. An application can be made in the sole name of the student, or jointly between the student and their parents. In the case of a sole application, the lender requires a parental guarantor.


Maximum loan

Up to 100% of the value of the property, subject to a maximum £250,000. The actual amount you can borrow will depend on the income that will be received from letting rooms within the property. Where this is insufficient rental to support the mortgage, the lender will consider parental income after deductions for financial commitments.


What Security is required?

The lender will require a first charge over the property to be purchased. Additionally, on loans greater than 80% of the value of the property, the lender will also require a collateral charge over the residential property of the parents.


Why would students want to become landlords?

We expect these mortgages to be very popular with students who want to buy a two or three bed property to live in and rent out the spare room to their friends. There are massive tax breaks involved in this too as rent collected for renting out rooms in your own home is tax free for the first £4,250 a year regardless of any other income or tax allowances.


What sort of property is acceptable?

The property must be in England or Wales and must be located within a 10 mile radius of the university attended. The property must have no more than four bedrooms. There are specific properties the lender will not consider, such as ex local authority flats, or flats in blocks of more than 6 storeys.


Other criteria

The lender will allow no more than 4 occupiers, to include the mortgage holder. Tenancies must be granted under a Licence Agreement. The other tenants do not have to be students.

The lender recognises that the student letting market operates within specific time frames; students are often looking to secure best accommodation earlier for occupation at the start of the academic year in late September. This may require a property to be bought sooner in order to market it to sharers for the following academic year. With this in mind the lender will allow the property to be let under an Assured Shorthold Tenancy (AST) for a minimum period of 6 months provided it is then occupied by the student as their main residence by late September at the start of the next academic year.

If you are wanting to find out more, contact us via this website with your details, quoting ‘SH MORTGAGE’ and will forward your details to our associate, so that they can contact you.

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