Unfortunately, a poor credit score can make renting in Edinburgh or other areas difficult. You can’t borrow your favorite property with bad credit.

The average Fico score varies between 300 and 850. A fair credit score is between 580 to 669, however even a score of 675 may not help you to get the best rates on traditional mortgages.

There is no need to worry because you can in fact qualify for a mortgage with a weak or average credit score. Some government programs offer VA and FHA loans. Furthermore, each state has special lenders providing home loans for poor credit.

Here are some tips to get a mortgage with a bad credit score

• Work on your credit score by strictly following credit rules to raise your score.
• Check eligibility for VA and FHA loans. The government guarantees allow you to get the advantage of relaxed eligibility.
• Get ready for a sizeable down payment. Lenders will appreciate your efforts and offer reasonable rates. For this purpose, you can sell some items to increase your down payment.
• Feel free to shop community banks and credit unions because big banks may offer different lending criteria. Credit unions can be a good option because they offer favourable terms.

Repair Bad Credit

Fortunately, you can work on your credit score over time. Before researching a house, you have to check your credit reports. In order to repair bad credit, you have to pay your utility bills before their due date and make sure to repay your loans as soon as possible.

Try to increase your credit score to almost 660. It will help you to drop a significant percentage of mortgage interest. Take necessary actions: pay your bills, decrease your balance, and avoid taking more credit. Before applying for a mortgage, you should examine credit reports further to find any discrepancies. Make sure you fix these as soon as possible.

Avoid Late Payments

In numerous cases, your poor payment habits can affect your bill payment. Remember, your payment history can affect your score. Try to improve on your bad habit of making late payments. By making timely payments, you will quickly improve your credit score.

Decrease Credit Utilization

Your debt will make up almost 30% of your FICO score. If you owe less than your capacity, you can improve your score. It is known as the rate of total credit utilization. Experts suggest managing your utilization on all cards under 30 percent. This figure is essential for credit reporting agencies.

Try to pay off your balance as soon as possible to improve your credit card statement. If you are unable to pay the whole balance before the closing date of the credit statement, try to decrease this amount as per your capacity.

If you are planning for a mortgage, avoid new credit because it will affect your credit score, but the right credit mix could help you raise your credit score to an optimal figure.

Bunk looked at the cost of a rental deposit and the cost of renting for a decade. Bunk then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58%.

Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58% would mean a total repayment of £231,798, a total of £254,478 including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680.

This means, that renting is £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.

This saving is most notable in Cambridge with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.

In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.

The lowest saving is in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city.

Co-founder of Bunk, Tom Woolard, commented: “Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.

However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to homeownership, even with almost record low-interest rates. 

Not only this but those that feel resigned to renting due to the high financial barrier of buying actually have a much better opportunity to save compared to those paying a mortgage. Whether they choose to use this for a deposit further down the road or simply to enjoy a better quality of life is up to them.”

You can't compare rent to a mortgage payment. This way of thinking about the rent versus buy decision is extremely flawed. Comparing a mortgage payment to rent is not an apples to apples comparison. In order to properly assess the rent versus buy decision, we need to compare the total *unrecoverable costs* of renting to the total unrecoverable costs of owning.

That may sound like a complicated task, but I have boiled it down to a simple calculation.

Nowhere across London is more unaffordable than Kensington and Chelsea and Knightsbridge in particular and rental costs in the borough are some of, if not the highest in the capital having increased over 23% since 2012.

But since June 2012, Julian Assange has managed to not only live rent free in prime central London, Harrods adjacent and just minutes walk from Hyde Park, but dodge any increase in living costs associated with renting.

The current average rent for a room in Kensington and Chelsea is £1,928 a month and while he may have been forced to pay for the upkeep of his cat, by claiming refuge in the Ecuadorian embassy over the last seven odd years, Assange has saved a huge total of £148,381 - an average of £1,810.

Tom Gatzen, co-founder of leading flatshare platform ideal flatmate, commented: “We’ve seen the capital’s tenants resort to some drastic measures to deal with the cost of renting in London but I think Julian Assange takes the gold for his commitment to a cost effective lifestyle in the London rental market. 

"It doesn’t seem all that long ago that he entered the Ecuadorian embassy but to think in the time since, the average tenant in Kensington would have paid £150,000 in rent for just a single room, which is actually quite mind boggling.  

"Of course, Kensington sits at the top of the table where rental costs are concerned but it does go to show how the cost of renting in London continues to spiral out of affordability for many.

"While Julian’s saving has been notable the harsh restrictions around leaving the property and the immediate eviction process that he underwent probably weren’t worth it. We would have recommended using ideal flatmate so he could have not only split the cost of living in London, but our personality test could have matched him with like-minded roommates.

"If the Ecuadorian embassy is at a loose end with the now empty room, we can certainly help them fill it with a suitable tenant that will bring less media attention and contribute to the monthly living costs.”

New research among 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed a mass consumer exodus from offline businesses, finding:

• Half of consumers (51%) rely on online solutions for the vast majority of their products and services;
• 45% of UK adults – 23.10 million people – favour online services over ones that require them to go to physical premises, with 29% refusing to use a business if there is no online service;
• Londoners are the most technologically demanding, with 62% opting for online solutions and a majority(51%) consciously avoid businesses that do not offer online services;
• Looking to the future, 57% of UK adults – 29.26 million people – believe businesses with no online presence will be replaced by online or app-based competitors by 2027;
• When it comes to the rental market, Generation Rent are frustrated by the archaic processes still used by high-street estate agents;
• 31% of adults (15.92 million people) think using high-street letting agents to rent out a property is outdated and burdened by reams of paperwork;
• 25% prefer to use online-only services such as Gumtree or Spareroom.com to source and secure a rental property, with 32% not having the time to use services that require them to visit a physical premise within working hours.

UK adults are turning en masse to online platforms, frustrated by the archaic and out-dated processes used by offline businesses, new research by LetBritain reveals.

An independent, nationally-representative survey of 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed mass consumer discontent with businesses failing to embrace digital disruption, with over half (51%) regularly going online to buy the vast majority of products and services they use. What’s more, 45% favour online services over ones that require them to go into a physical premise, and 29% actively avoid those businesses that do not offer an online service. People in the capital are the most technologically demanding, with 62% of Londoners opting for online solutions and half (51%) consciously avoiding businesses that do not offer online services.

Across UK industries, the rise of digital solutions is enhancing the accessibility, transparency and quality of services available to consumers. In response, the majority of UK society (57%) believes that businesses without an online presence or that require a significant amount of offline communication will be replaced by online-only or app-based alternatives within the next 10 years – equating to nearly 30 million UK adults. This number rises to three in four in the capital.

In light of this, LetBritain’s research found consumer dissatisfaction was particularly prevalent in the letting market, with both renters and landlords voicing their strong discontent at the lack of quick, accessible and easy online services available to those seeking to rent a property. With the annual rate of rental growth recently doubling in the UK, 31% of adults think that using high-street letting agents to rent out a property is outdated and overly-burdened by reams of paperwork.

In response to these widespread frustrations, one in four (25%) UK adults prefer to use online-only services such as Gumtree or Spareroom.com to source and secure a property, with 32% not having the time to use services or undertake transactions that require them to visit physical premises. This trend was particularly pertinent for Londoners – half of people (50%) in the capital rely on online services only when looking for a room or property to rent, with 55% not having the time to physically visit a property or office to undertake or complete a transaction.

Fareed Nabir, CEO of LetBritain, commented on the findings: “Over the past decade, online solutions have drastically transformed the way we  conduct business. Today’s research clearly shows that consumers not only expect but now demand that companies provide their services online. And on that point, the rental market is clearly falling short, with too many high-street real estate agents failing to embrace digital solutions, relying on cumbersome offline processes. For businesses in the rental market, the choice is simple – integrate and embrace online solutions or run the risk of being outpaced by changing consumer demand.”

(Source: LetBritain)

UK adults are turning en masse to online platforms, frustrated by the archaic and out-dated processes used by offline businesses.

An independent, nationally-representative survey of 2,000 UK adults commissioned by virtual letting agency LetBritain has revealed mass consumer discontent with businesses failing to embrace digital disruption, with over half (51%) regularly going online to buy the vast majority of products and services they use. What’s more, 45% favour online services over ones that require them to go into a physical premise, and 29% actively avoid those businesses that do not offer an online service. People in the capital are the most technologically demanding, with 62% of Londoners opting for online solutions and half (51%) consciously avoiding businesses that do not offer online services.

Across UK industries, the rise of digital solutions is enhancing the accessibility, transparency and quality of services available to consumers. In response, the majority of UK society (57%) believes that businesses without an online presence or that require a significant amount of offline communication will be replaced by online-only or app-based alternatives within the next 10 years – equating to nearly 30 million UK adults. This number rises to three in four in the capital.

In light of this, LetBritain’s research found consumer dissatisfaction was particularly prevalent in the letting market, with both renters and landlords voicing their strong discontent at the lack of quick, accessible and easy online services available to those seeking to rent a property. With the annual rate of rental growth recently doubling in the UK, 31% of adults think that using high-street letting agents to rent out a property is outdated and overly-burdened by reams of paperwork.

• Half of consumers (51%) rely on online solutions for the vast majority of their products and services;
• 45% of UK adults – 23.10 million people – favour online services over ones that require them to go to physical premises, with 29% refusing to use a business if there is no online service;
  • Londoners are the most technologically demanding, with 62% opting for online solutions and a majority(51%) consciously avoid businesses that do not offer online services;
• Looking to the future, 57% of UK adults – 29.26 million people – believe businesses with no online presence will be replaced by online or app-based competitors by 2027;
• When it comes to the rental market, Generation Rent are frustrated by the archaic processes still used by high-street estate agents:
  • 31% of adults (15.92 million people) think using high-street letting agents to rent out a property is outdated and burdened by reams of paperwork
  • 25% prefer to use online-only services such as Gumtree or Spareroom.com to source and secure a rental property, with 32% not having the time to use services that require them to visit a physical premise within working hours

In response to these widespread frustrations, one in four (25%) UK adults prefer to use online-only services such as Gumtree or Spareroom.com to source and secure a property, with 32% not having the time to use services or undertake transactions that require them to visit physical premises. This trend was particularly pertinent for Londoners – half of people (50%) in the capital rely on online services only when looking for a room or property to rent, with 55% not having the time to physically visit a property or office to undertake or complete a transaction.

Fareed Nabir, CEO of LetBritain, commented on the findings: “Over the past decade, online solutions have drastically transformed the way we  conduct business. Today’s research clearly shows that consumers not only expect but now demand that companies provide their services online. And on that point, the rental market is clearly falling short, with too many high-street real estate agents failing to embrace digital solutions, relying on cumbersome offline processes. For businesses in the rental market, the choice is simple – integrate and embrace online solutions or run the risk of being outpaced by changing consumer demand.”

(Source: Let Britain)

With an ever-growing need for property, renting in the UK has become go-to game for many home seekers who can’t quite make it into the mortgage market. But what does this mean for the letting side of property? Fareed Nabir, CEO of PropTech platform LetBritain discusses for Finance Monthly.

Over recent weeks we have seen the UK’s two largest political forces host their party conferences. Along with inevitable, frequent mentions of Brexit and a fair amount of scrutiny for both the Labour and Conservative leaders, it also became clear that access to housing is at the top of Westminster’s agenda at present. In this respect, the private rental sector faces particular challenges in providing homes for a growing proportion of the country’s rising population. With the UK population projected to reach 70 million people by mid-2027, PWC estimates that an additional 1.8 million households will enter the UK’s private rental sector over the next eight years.

Central to the growing importance of the private lettings sector is the rising costs associated with purchasing a home. The average value of properties in London has risen by a whopping 78% in the ten years since the onset of the 2007 global financial crisis. Add to this further figures around rising prices for Manchester, the East Midlands and Scotland and a clear picture emerges. Whilst the UK property market may be a fruitful asset class for many investors, more and more UK residents are now coming to rely on the private rental sector as the bottom of the ladder rises out of their reach.

Recognising the value of renting

Reacting to the rising number of people moving out of homeownership, leading political figures have focused on addressing feelings of insecurity expressed by voters. Both the Conservative and Labour parties share a target of building one million new homes by the end of the parliament and are considering the possibility for longer tenancies to become the norm. Labour has taken this one step further and has embraced a policy pursued in cities including Berlin, Stockholm and New York, whereby the government intervenes in various ways to restrict rents.

However, we must also remember that for many people, renting is an extremely attractive option. One of the most attractive aspects of renting is the greater flexibility offered by tenancies relative to ownership. For example, if you have to move to a new city for work, it’s nowhere near as difficult as having to list a property and wait for a sale to be processed. With the UK workforce now more globally and nationally mobile than ever before, we must remember the historic advantages of renting if we are to effectively adapt. The reasons that made renting an attractive option in the past haven’t gone away; in fact they are now truer for more people than ever.

To this end, the emergence of a rising number of tech platforms within the property sector holds significant promise. A property market that was once dependent on bricks and mortar agencies, endless reams of paperwork, lengthy phone calls and poor transparency is fast becoming more efficient; as a result both landlords and tenants are coming to expect more. It’s now possible to begin the process of securing a rental property from anywhere in the world and engage directly with a landlord or their instructed letting agent.

In short, tech has meant that the process of letting a property can be made quicker, cheaper and more transparent for all involved. Commonplace in other aspects of people professional and personal lives, people in the UK today expect tech – everything from bespoke software and apps to slick online platforms and web support – to make hitherto laborious processes far, far easier.

Delivering choice and security

Recent LetBritain research into this emerging development found that 31% of UK adults, the equivalent of 15.92 million people, now think that using high street letting agents to rent out a property is outdated and overburdened by paperwork. A further 25% were found to be relying upon unregulated online-only alternatives to source and secure a rental property. Whilst a number of challenges remain in managing this transition, the scale of public sentiment is resoundingly favourable towards harnessing the power of tech to more conveniently and efficiently facilitate property rentals.

The challenge remains for the sector to deliver choice and security across the letting market. Landlords should not feel the need to put their property at risk by renting to an unreferenced tenant just because they were sourced online, and tenants deserve to know that their legal rights will be observed. If this is achieved, the private rental sector should be able to manage the demand that it’s set to face in the years ahead, with landlords and tenants alike incentivised to be communicative, transparent and forthcoming with all necessary documentation.

As more of us move around or find it difficult to buy in our desired location, digital solutions that enhance and protect the interests of landlords and renters are vital. So while political leaders are focusing heavily on turning Generation Rent into Generation Buy, it is equally important that they promote more progressive approaches for serving all those in the rental market.

Below Rob Moore Co-founder at Progressive Property discusses with Finance Monthly how to buy property the correct way, how to get a bang for your buck, and how to avoid risk.

There are two types of BMV properties: those that can make you money, and those that have been ignored because they are money-draining duds. This second kind are the BMV properties that you should never buy, of course, but it’s easy to get drawn into buying something cheap which will in fact cost you far more of your time, money and effort than it is worth.

The below market value properties you want to find are those that other investors haven’t ignored, but have missed. These are the properties that have fallen under other less observant investors’ radars, and which are ready for you to swoop in, sweep up, and make huge profits on.

First off, what does “Below Market Value” actually mean?

“BMV” properties and the valuation process

According to the Royal Institute of Chartered Surveyors (RICS), market value is “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in arm’s-length transaction after property marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

Now that’s a hell of a mouthful!

In principle, a valuer will compare the property to other similar properties in the area, alongside its estimated level of demand, transferability, scarcity, and whether it can fulfil its duties as a comfortable environment in which to live, and come up with a price estimate using this combined evidence.

Investor Peter Jones hosted a recent Progressive Property podcast on the subject, and during the episode he suggested that the current valuation system in the UK may be flawed. Peter said that the properties which valuers will compare the property they are valuing to have often been sold “with compulsion”. Distressed sellers who have a property on the market for reasons such as divorce, job loss or financial difficulties are among the reasons as to why a property may be sold through compulsion – which contradicts the RICS’s definition.

For this reason, consider the market value alongside the questions, “What price am I willing to pay for this property?” and “How much money will this property make me?”

1.  Make sure that it is a cash-flowing property

Not all properties on sale or that are buyable at a value below the market price are going to be great investments. Some of them are cheap as chips for a reason!

For example, it is very possible to pick up cheap, high-quality properties in rural villages in isolated parts of the UK. These could have the most enchanting views and most beautiful designs, but the likelihood of you selling them on or renting them out easily is unlikely. Even properties in apparently desirable areas can cause unexpected selling problems, such as a lack of hungry tenants or low rent prices in the area failing to cover the mortgage.

A good investment property needs to pay its own way, so make sure that any property you consider purchasing is going to be cash-flowing – or have a very good reason if you don’t.

2. Do your due diligence

Without evidence for a property’s profitable potential, you’re basing your purchases on your gut and hearsay.

Risky business.

To find evidence of a property’s potential, put in your due diligence by visiting the property and checking out the nearby area – or at the very least, send a business partner, colleague or peer you trust. Use a property app to check the price of properties that have been sold in the same postcode over the past year. You can also check rental prices in the same area, and consider employing a solicitor before committing to a contract.

3. Make sure there isrental demand

No rental demand, no tenants.

No tenants, no rent.

No rent, no money, and a big black hole where the cash you invested used to be.

To give you an idea if there is rental demand in the area for properties such as the one you are considering buying, monitor websites and apps such as Zoopla and Rightmove to check, a) how many properties are currently available to rent, and b) how often the adverts disappear and new ones appear. Too many available properties can suggest oversaturation, and not enough change in the listings can suggest a lack of demand.

4. Seek out motivated sellers

Property that has been on the market a long time is likely to have a motivated seller.

On an app, such as Zoopla, check the “most recent” listing, but backwards. 

If you combine evidence that similar properties are being successfully rented in the local area with the fact that the property on sale has been listed for a long time, you are likely to find a motivated seller. Any property that has not been viewed on a property website or app for a month or more suggests that the seller is going to be more open to lower offers, because the longer their property is on sale for, the more it will cost the seller.

A seller’s keenness – or even desperation – to sell their property offers you plenty of leverage.

5. Advertise locally

Another way to find below market value properties is also another way to find motivated sellers, but includes the potential for finding properties that haven’t been marketed yet too, thereby accessing them before other property investors in the area.

A targeted advert can appear online, in newspapers, in newsagent windows, or even leaflets if you want to go old-school. Ideally, any adverts should appear in an area that you have already identified as a potentially lucrative spot for buying properties. If you let local property owners know that you are looking to buy properties in the area in this way, generating leads should be simple and turn you into the first point of contact for any property owner who is even tempted to sell, let alone those who suddenly find themselves pressured by unforeseen circumstances.

6. Don’t take “BMV” at face value

It is hard to prove that a property is “BMV” from a technical standpoint, which is why you must consider other investment fundamentals. It doesn’t matter how cheaply you purchase a property if it isn’t going to make you a profit.

Getting price blinkers can cost you dearly, so make sure to consider your profit expectations, whether it is a short-term or a long-term commitment, how much work needs doing to the property, and so on, before getting fixated on how much cheaper the place is than others nearby.

7. Don’t buy in the Bronx

Buying in the wrong area is one of the most common mistakes that first-time property investors are likely to make. Many areas may have a reputation for being “up and coming”, with plans for better transport, a new shopping centre, greater funding, and many other exciting possibilities. However, unless plans such as these become concrete – and sometimes, even if they are – they can easily fall through.

Every investment carries risks, of course, but it is your role to minimise the likelihood of loss and increase the likelihood of profits. For that reason, avoid buying property in the reputed “bad” areas of town simply because of their low price tag, unless you have some serious evidence that it is going to make a worthy investment.

8. Don’t buy properties that need too much work done

Some property investors are so excited by the price that they neglect to consider how much extra work a property is going to take before it can be rented or re-sold.

If you have great builder contacts, then a property that requires some TLC can be a great way to create extra profit. However, there are risks involved when buying a run-down property, so make sure to hire a reliable surveyor to inspect the place and detail any major repairs or alterations needed.

9. Don’t go through “middle men”

There are often companies and entrepreneurs that claim to be able to provide you with a range of below market value properties. In general, if you allow someone else to source your property for you, you are going to have to pay for the property itself and this person or company’s commission. There is also a question you should be asking yourself: why isn’t this company snatching up this deal-of-a-lifetime for themselves? Is it because there is a catch, and the deal isn’t as fantastic as it is being made out to be? Are there unseen structural problems that even surveyors will find difficult to identify?

For these reasons, try to avoid being taken for a ride by intermediaries and, in the process, maximise your profits.

10. Don’t be afraid to haggle

The owner of any property being advertised for a price that seems surprisingly low is likely to be keen on a quick sale – otherwise, they would bump the price to a more reasonable level and wait until they found someone to pay it. This offers you some leverage that you should utilise.

Even with low prices, if you are keen to make as much profit as you can – and you should be – then make an offer that’s even lower. If they don’t accept it, you can always take them up on their original offer if the deal is hot enough.

Final thoughts

While some argue that there is technically no way to buy BMV, because as soon as a property is sold then the market price becomes whatever it was sold for, this is splitting hairs and an unhelpful way of viewing the property market.

Buying below market value is finding a property for a lower price than other property owners are selling their own similar properties for. If you can find a distressed seller, or any property that has been overlooked by other buyers due to lack of advertising or some other neglect on the seller’s part, keep the knowledge to yourself, do your due diligence, and get ready to make some serious money.