Finance is often a fundamental part of the acquisition process. It can make sense for tax reasons to borrow part of the purchase price, as all interest on the mortgage of whatever size is allowable against the rental income for UK taxation purposes.

A degree of borrowing may suit some clients, and if they choose a sensible level of 'gearing', there is the opportunity to improve the net yield on a property. The risks attached to moderate borrowing are significantly less in areas like Cambridge and Exeter where the history of capital growth has been so positive.

There is a range of options. One route is simply seeking return on capital through rental income, against a background of capital growth. A second route for some clients may be to 'gear up' their investment by matching their equity with, say, a 50% loan, though borrowing up to 85% of the property's value is now often possible. If a property is purchased with a mortgage of for example 50% of its value, then the rental income should fund the loan and provide a residual net income (please see the Investment Appraisals for further illustration of this). Of course this type of arrangement will not suit all investors, but it can provide a way of enhancing the return on capital expended.

Securing finance for investment purposes is a specialised business, and one made easier by using our specialist brokers. Interest rates and the amount of the loan vary considerably and the correct method of presentation to the lender is of paramount importance in order to obtain the best terms. Through their experience, and the consequent and necessary speed and responsiveness, our brokers are able to obtain very attractive mortgages from lenders on behalf of clients. Because of the confidence that lenders have in our expertise in choosing the right properties at the right prices, they are often flexible in interpreting their own lending criteria. For example, it is usually possible to arrange a mortgage for a retired person on a low income.