What you must know when investing in buy-to-let property

It’s easy to see why you are attracted to the buy-to-let investment. The renting market has changed with more people looking for flexible lifestyle that allows them to move around the country in pursue of the right job. When demands for rental properties are on the rise, more tenants may be registering with letting agencies. Here are some tips as to what you should keep in mind when investing in buy-to-let property.

Decide how you will finance the investment

Once you have decided you are going to go ahead with purchasing a property to let, your next step is deciding how to finance your new investment. Your two main options being either cash or obtaining a buy to let mortgage. However, considering the average property price in the UK is over £150,000 a mortgage tends to be a more viable option. Another preferred method of payment may be a deposit payment, which is significantly less than the full property price. In such instance you legally take possession of the building, refurbish it (if needed) and rent the property out. However, it is essential to keep in mind that taking out a mortgage, though recommended, still comes with a bit of risk.

It is also worth noting that often buy-to-let mortgages operate differently compared to residential mortgages. This is because some buy to let clients opt to go for an interest only mortgages. Instead of paying back the capital and interest monthly payments, you would pay back the interest on the capital, leaving the capital payment still to repay at the end of the term. However, this arrangement has an increased risk and may not be the best option for everyone.

That’s where a mortgage broker like us comes in handy with our access to exclusive deals and vast market knowledge. We can provide you with all of the information you need along with the most suitable rates and options for you, individual to your situation.

Buy-To-Let industry changes

The buy-to-let property landscape is changing rapidly with the introduction of new regulations and laws. The latest in a series of tax changes has led to:

  • an increase in stamp duty payable by buy-to-let purchasers,
  • a stricter lending criteria for lending,
  • restrictions on interest relieve against rent (Section 24 of the Tax Act)

All of these add up to more costs for the investor. Keeping an eye out on these new tax laws and figuring out ways to take advantage of these changes is crucial to maintaining a positive return on investment.

Final thoughts

Finally, remember, you are responsible for the maintenance and repairs on the house, there’s the monthly interest payment, and of course other sundry costs you’d incur managing your portfolio. It is essential to have adequate funds available to keep things running even during those days when the house is empty. All of these costs make finding the most suitable deal on your buy to let mortgage more important than ever!

Your home may be repossessed if you do not keep up repayments on your mortgage.

Call Best Buy to Let for more information at

✆ 01434 700077