Your first buy to let

Buying your first buy to let property and becoming a landlord is both exciting and nerve-racking. From the initial conversation where you will understand your budget and what properties you can afford to buy, to your mortgage rate options, the legal process, the surveyors process, and everything else you need when buying your very own buy to let property; your mortgage broker will be there for you every step of the way to assist. 

Buying your first buy to let property is becoming an ever-increasing challenge as with the recent tax changes on how rental income is taxed and the additional 3% stamp duty careful planning is needed to ensure you’re all set up correctly. Indeed a large proportion of mortgage lenders now don’t accept applications from first-time landlords so even getting the mortgage for a buy to let first time around has got tougher.

Check out whether you want to be considering purchasing the property in your personal name or a ltd company.

You could also become what is called an “accidental landlord” i.e. you’re looking to move from your current main residences, rent that out and go on to buy a new home to live in; whilst still retaining ownership of your previous home and renting it out.

This is called a let to buy mortgages, check out more here

The first thing to do is start speaking to a mortgage broker to understand your options.

Most importantly they will help manage the whole process for you and will actively engage with all the other parties in the process, like the estate agents, solicitors, surveyors, and of course the mortgage lender you proceed with to ensure everything is progressing in the right direction. 

Buy to let lenders will lend you typically up to 75% (Some go up to 80%) loan to value. This will be based on the rental income that the property is likely to achieve, as confirmed by the surveyor the bank will send round ones your application is submitted. 

It is important therefore to get a good idea realistically in its current condition what the property would rent out for. This is an important point as if you feel the property needs fairly significant works you either may need to put a bigger deposit down or consider a refurbishment buy to let mortgage

Once you have that realistic market rent figure speak to your mortgage broker to go through the options available to you.

Every lender has their own buy to let affordability and stress test calculations and therefore it’s important to get advice in this area so speak to a mortgage broker. 

Being a first time buy to let buyer does mean you need to do some extra preparation to ensure you’re successful at the mortgage application stage so that you are able to buy the property that you wish.