Buy To Let

Some buy to let mortgages are not regulated by the Financial Conduct Authority.

Becoming a private landlord should not be seen as an easy way of making money. It can be riskier and more complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will rise. That said, having a second property to let to tenants could reap considerable financial rewards over time.

Our advice is simple

There are three main differences in buy to let mortgages:

Rent Potential
The decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.

Interest Rate
Buy to let mortgages have slightly higher interest rates.

Larger Deposit
Typically a minimum of 20% or 25% of the property’s value is required as a deposit.

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time?
The decision may affect the type of property you purchase, and the location.

And, don’t forget.. 

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property’s interest only mortgage repayments in order to cover your costs should anything go wrong.

These additional costs include:

Property Upkeep Maintenance costs for the property.

Letting Agent’s Fees Agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service.

Ground Rent/Service Charges Applicable to leasehold properties.

Legal Insurance To cover costs from evicting tenants in the event of non-payment. This is very important, and can be very expensive.

Insurance Buildings insurance and contents insurance for the items provided as part of the rental agreement.

Furnishings The purchase of any furniture. If the property is to be let furnished, make sure you are covered for this under your home insurance.

Gas/Electrical Appliances Cost of buying and maintaining appliances and ensuring they comply with any regulations, such as safety tests.

Decorating Costs The property may require work – painting, or a new bathroom suite before it is suitable for letting to tenants.

When choosing a property to let, it is also wise to take advice from local letting agents to determine what types of properties are in demand and which parts of the town are most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live, and any other important information.


Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

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Investments are great, when you know the risks.