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Buy to Let First-Time Landlords

If you’re looking to buy a property to let out to tenants, it can be a little more challenging if you don’t already own your own home. But you can still become a First Time Buyer Landlord, with support from a good mortgage advisor. 

Can a First Time Buyer get a Buy to Let mortgage?

First Time Buyers may look for an investment property rather than a home to live in themselves. It might be that you’re happy renting or living with your parents, but want to get on the property ladder and have a tenant pay your mortgage for you.

First Time Buyers can absolutely get a Buy to Let mortgage, but you may have a more limited choice of lenders. We can help you find a suitable deal.

What are the criteria for a Buy to Let mortgage?

The main criteria for a Buy to Let mortgage are:

  • A good deposit – Most lenders require a 25% deposit for a Buy to Let mortgage.
  • Minimum income – Some lenders want evidence that you earn at least £25,000 per year – but not all lenders expect this.
  • Credit score – Lenders always look at your credit score. Some do accept clients with adverse credit, but usually this needs to be fairly low level.
  • Age – all borrowers must be over 18. Some lenders set higher age limits.
  • UK residency – most lenders will need you to be a UK resident.

How will a mortgage lender assess my application?

Each lender has their own specific criteria, so successfully applying for a mortgage is all about proving that you meet those requirements.

Working with a mortgage advisor is the fastest and easiest way to find lenders that will accept you. Many Buy to Let providers only work with brokers, and we know what each lender is looking for. We’ll help make sure you have all the documents you need so that your application goes smoothly.

How is my income used to calculate my affordability?

In fact, your income has little to do with how much you can borrow with Buy to Let. Your borrowing is based on the amount of rent the property will generate – the ‘rental yield’. 

The calculation lenders use to offer you a mortgage is called the stress test. Your rental income needs to be at least 125% of the monthly mortgage payment. 

Some lenders do ask that you receive other income as reassurance, in case there is no tenant in place at certain times. The minimum requirement is often £25,000. For a First Time Landlord, this can be more important than for an experienced property owner.

How much deposit will I need to put down?

Generally you should expect to put down 25% or more as a first-time landlord. A lender may also ask you for proof of your deposit as part of your application assessment. So it’s important to keep digital records demonstrating where that deposit has come from.

Can I get a Buy to Let mortgage and live in the property myself?

Living in a property on a Buy to Let mortgage is a breach of your contract with the lender. The worst case scenario would be that they cancel your mortgage and you have to repay the loan immediately. 

If you ever intend to live in the property, you should arrange a residential mortgage from the outset as opposed to a Buy to Let.

Is it illegal to rent a house without a Buy to Let mortgage?

This isn’t against the law, but again, letting a property to a tenant on a residential mortgage would breach the contract terms. 

Many lenders will consider granting you Consent to Let on a standard mortgage, however. So if you need to let out your property rather than live in it yourself, talk to your lender. They may allow you to temporarily rent the property out until the end of your current deal. The other option is to remortgage to a Buy to Let product.

How can Mortgages by McAteer help you?

We work with many would-be landlords to find the right mortgage deal – including First Time Buyers. We work with individuals and limited companies, Buy to Let investors and portfolio landlords on all kinds of mortgage requirements.We explain the process and compare mortgage rates, fees and criteria, to help take the strain out of becoming a landlord. Let us take the strain out of becoming a landlord.

Approved by The Openwork Partnership 12.01.24

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