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Investment property mortgage guide

Here are some of the things you should consider before investing in property in the UK.

What is an investment property mortgage?

It’s a mortgage designed for people who want to invest in a property for the purposes of renting it to a tenant. This mortgage is available in sterling only.

You need to use good judgement and consider all the costs you’ll face as a landlord. You’ll need to be prepared for the possibility of rent not coming in, interest rate rises and changes to tax law. You should seek independent financial advice before taking out a mortgage.

What do you need to obtain an investment mortgage with Barclays International Banking?

You’ll need to be at least 21 years, have a deposit of 25% or more of the property’s value and be a client of Barclays International Banking.

Required surveys and searches

Land Registry searches: This will confirm the property’s current owner and any current charges registered on the Local Charges Register

Local authority search: This will show any development plans that could affect the value of the property, such as a new road proposal.

Condition statement: We may need proof that the property is suitable to secure the loan. We offer a range of statements:

  • Barclays valuation describes the overall condition of the property, in particular structural movement and essential repairs
  • Barclays survey and valuation gives advice on areas that need attention now or may in the future
  • Barclays building survey is the most detailed investigation.

Each report also has information about saving energy, property maintenance, security and fire safety.

Taxes

When purchasing a property in the UK you may be required to pay:

  • Stamp Duty Land Tax if purchasing a property in England or Northern Ireland
  • Land and Buildings Transaction Tax if purchasing a property in Scotland
  • Land Transaction Tax if purchasing a property in Wales.

More details are available on the UK government website.

Insurance

Buildings insurance is a minimum requirement of a mortgage; this insures the structural integrity of the property and protects against risks such as fire damage. You might want to consider additional levels of insurance that you may require such as emergency repair cover or landlord's liability.

Please note

Your home may be repossessed if you do not keep up repayments on your mortgage.
Your investment property may be repossessed or a receiver of rent appointed if you do not keep up payments on your mortgage.

Remember that where the mortgage is denominated in a currency other than your home currency, changes in the exchange rate may increase the equivalent value of the debt in terms of your home currency.