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The loan you take out on a property for investment purposes is called a buy to let mortgage. That is to say, if you intend to let your property out to create rental income that is sufficient to cover the mortgage interest payments.

The person who purchases a property for investment purposes is called a landlord or landlady. The landlord’s aim is to generate sufficient rental income that after deducting the mortgage payments and property running costs there is money left over i.e. profit.

The buy to let mortgage is like any other loan in that it will be secured on the property. The bank will hold the deeds to the property (the title deeds) so in the event of default the property can be legally repossessed.

Specialist Mortgages

Intermediaries business is made up of 27% specialist mortgages reports a BM Solutions survey. Six hundred mortgage advisers were surveyed and the survey found that buy to let mortgages remained the most popular specialist deal.

About eight out of ten advisers still deal with the adverse credit sector and 88% were active in self-cert mortgages. Self-build was the most lucrative sector with average loans of £179,000.

Advisers said specialist mortgages took a third longer to process than mainstream mortgages. Around 97% of advisers write up buy to let business which, not that long ago, only accounted for a small part of the business. As this sector grows it will become even more important to have specialist lenders.

Buy To Let’s Confident

A new survey has shown 72% of investors consider now a good time to buy property.

The survey also found that most investors are expecting house prices to rise over the next year and almost half of those surveyed predict a rise with only 14% expecting a negative growth.

The high demand by tenants is keeping up rents and providing the base rate does not venture above 6% the market will remain good for investors looking for a long-term investment and most realise that property is still an unrivalled investment asset.

Bad colour schemes 'can damage a property's value'

Buy-to-let landlords planning on selling their property could actually knock an average of £1,392 from the value of their house by painting it the wrong colour, according to new research.

A study from Privilege Insurance revealed that a third of estate agents would remove at least £1,000 from the value of a property if it had a poor interior colour scheme, while ten per cent would take away more than £3,000 from a property valuation.

Estate agents say that the worst colour to decorate an interior in is red or orange, with nearly one million homeowners in Britain choosing one of these colours, while the best is a neutral magnolia - often the best colour when letting a property out to tenants anyway.

However, just 37 per cent of homeowners have magnolia as the main colour in their property, with 40 per cent of homeowners not considering the implications of using their favourite colours to decorate a property rather than one which will help sell the house.

Colour psychologist and interior designer Andrea Mountford warned: "If there is disharmony anywhere in your colour schemes, then the negative psychological properties of your colours are more likely to prevail and your viewer's unconscious response toward your home is also much more likely to be negative in nature."

A further risk to a property's value is DIY disasters, with a fifth of homeowners ending up out of pocket through these and three per cent damaging the value of their property through bodged repairs, the study found.

Landlords can also make sure they save money by getting the best buy-to-let mortgage for their needs.