Buy To Let Mortgages

Different Buy to Let Markets - An Overview

Buy to let covers a huge range of different opportunities. Whilst it is true that the vast majority of buy to let landlords consider the standard residential market as their bread and butter, there are many other opportunities available that should not be overlooked. By spreading your portfolio throughout the various markets, you will be much better placed to deal with any dips on one or more of the markets, as not all of your investments will dip at the same time, allowing you greater control and predictability in your investments.

Standard Residential Lettings
A standard assured short-hold tenancy is the basic simple residential tenancy. Since 28 February 1997, all tenancies are considered to be an assured short-hold tenancy, unless it is stated in writing to the contrary. As a standard, an assured short-hold tenancy will normally be either six months or twelve months, although it is possible to have any other duration with the agreement of both landlord and tenant.

Once the tenancy term comes to an end, the tenancy can continue but it will be on a periodic basis, the length of the period being determined by how often the rent is paid. For example, if the rent is paid weekly, the period is one week and either tenant or landlord can end the tenancy with one week's notice. During the original short-hold tenancy period, neither tenant nor landlord can end the tenancy, under normal circumstances.

Student Lettings
Student lettings are slightly different from standard assured short-hold tenancies, because the length of the tenancy is almost always for the duration of the academic year, which is ten months. It is common practice for landlords of student houses to let each room out, individually. This has the advantage of producing higher returns, but does not allow a landlord to claim any unpaid rent by one individual tenant from any of the other tenants. In addition, all rooms will have to be let individually, which can lead to partial voids and a degree of unpredictability.
Any property with more than four individual rooms being let independently will be classified as a house of multiple occupation, which requires certain criteria to be met and licences to be obtained.

Holiday Lettings
Holiday lettings are by far the most labour intensive of lettings, with a different set of tenants moving in, on a weekly basis. The changeover and paperwork is far more time consuming than a standard assured short-hold tenancy. There are advantages to holiday letting such as favourable tax treatment and increased returns if the property is let for a substantial part of the year.

Commercial Lettings
A relatively new concept for the buy to let landlord, commercial lettings offer solid returns on a long-term basis. Commercial lettings can last for decades, providing a guaranteed, stable rental. Despite these advantages, commercial lettings are still not massively popular, usually because they are much more dependent on the economic state of the country and often require specialist commercial knowledge which many buy to let landlords do not possess.

Summary
The buy to let market is largely made up of assured short-hold tenancies in standard residential lettings;
other options include student lettings, holiday lettings and commercial lettings;
all options have their own pluses and minuses and each should be considered by anyone entering the buy to let market.