Whilst today’s low interest rates might not be good news for any savers out there, on the flip side, this is great news for those looking to invest in property, so we’re going to take a look at the property market now to see whether it might be a good time for you to invest in a buy-to-let property.

What’s the market like right now?

There’s no doubt that the buy-to-let market is still very healthy. With more than 5 million households in the private rented sector*, the UK has now been named as the most favourite destination for property investors**.

Until the last few years, landlords enjoyed several advantages over first time buyers, who are typically often the customer they're competing with when it comes to buying a property. These advantages include, but not limited to, the new Stamp Duty regime and the previous ability to offset mortgage interest against rental payments.

With many first time buyers finding it hard to raise the deposit to get on the property ladder, they are naturally turning to rented accommodation as an alternative to buying. This is good news if you’re a landlord, or considering becoming one.

Are you looking for a long or short-term buy-to-let investment?

When it comes to investing your money, looking far ahead and considering your future plans is key.

If you don’t need easy access to the money you’re investing, then making a long-term investment is always a good option, as you can see good returns for your money (especially in property, as house prices can increase over long periods of time). However, if you’re only in it for the short-term, then you may be subject to fluctuating house prices, but that’s not to say that a return on your investment isn’t still possible though, but just less likely.

Understanding your local market

Planning is everything when it comes to investing in property, so taking the time to brush up on your local knowledge is invaluable, as each region differs from the next.

Get to know what the demand is like in your area by speaking to other landlords, estate agents and reading online forums. This will help you decide where to buy your property. You might realise that buying a little further afield from where you originally planned is worth it if the rental market is thriving in this area.

Once you’ve decided where to buy, the next job is finding the right property. Many first time landlords make the mistake of buying a property that they can see themselves living in. However, this is often the wrong approach if you’re planning on buying purely for investment purposes.

Is buy-to-let a good investment?

This largely depends on what you want to get out of it. On the whole, yields are lower than they were about a year ago due to the tax changes (increase in Stamp Duty), and additional legislation is now required for HMOs (houses in multiple occupation) when it comes to planning perspective on the size of rooms for single or double letting rooms. So the market is still busy and LTVs have increased (up to 80-85%) which is great if you’re looking to borrow as much as possible.

Get the right mortgage advice

If you’re seriously thinking about becoming a landlord, we recommend you sit down with a mortgage adviser to run through your finances, the type of property you want to buy and the rental returns that can be generated, be that a particular type of property e.g. semi-detached, a flat, HMO etc. and/or whether you’re planning to attract a certain type of tenant e.g. student, young professional, etc.

Our knowledge and expertise of the buy-to-let market means that we’re perfectly placed to help find the right mortgage for your circumstances.

Landlord responsibilities

When making your final decision, remember the purpose of letting out property is not solely to make money, you also have a responsibility to provide safe and secure housing to your tenants.

Our buy-to-let guide can help you prepare for the roles and responsibilities of being a landlord, but if you have any further questions, please don’t hesitate to get in touch with our team of friendly mortgage advisers, or check out our buy-to-let mortgage deals.


*Source: Game of Homes report from The Resolution Foundation, June 2019


Important information

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

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

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.