Investing with Buy to Let

It’s no coincidence that almost any financial advice you might receive involves buying property as an investment. Real estate in its various forms is a great opportunity to create regular income and is generally a good long-term option. There are as many ways of investing in property as there are types of property available:


Understanding Buy to Let

If you are looking to take your first step onto the property investment ladder or have some money that you want to use to create a better life for yourself, then one path that’s open to you is a Buy-To-Let mortgage. There is more to this than simply finding a property in a good location with good schools, it’s important that you understand how a Buy-To-Let mortgage works and how it can have an impact on the property you purchase.

Studies have shown that, by 2025, almost half of the adult population under 40 years of age will be renting, rather than buying their own homes. As the UK population is due to increase to approximately 70 million in the next 10 years, the number of renters is only going to grow. With an average calendar month rental cost of over £900 in the UK, the increased popularity of this kind of mortgage is obvious as it is an incredible investment opportunity.


What is Buy to Let

When it comes to a Buy-To-Let mortgage, assuming you need to borrow the money to purchase the property, you need to understand what it is and why it’s different. Especially, if it’s new to you. So, let’s take a look…

It’s important to stress right up front that a Buy-To-Let loan is very different from the traditional mortgage/purchase transaction that most people use to buy their home. Instead of buying a property with a mortgage that you intend to live in, or at least resell after refurbishment, a Buy-To-Let mortgage is designed specifically to help you buy property as an investment. Once purchased, you then subsequently rent (or let) the property out as a landlord to the tenants. 


Investing using Buy to Let

Whilst the basic premise of a Buy-To-Let mortgage is similar to a traditional one (i.e. you borrow a large amount of money to buy a property and repay it over time), there are a number of key differences you should be aware of when it comes to investing.

These types of mortgages are usually only available for people who already own their own home (either outright or with an existing mortgage). Given that you’re using this as an investment, it’s important to stress that you will still be liable for the repayments. Obviously, if your property is occupied, then rent will cover your repayments, but if not, then repayments will still be required.


Investing with book and plant


Landlord Responsibilities

Like any financial commitment, you need to go into this kind of arrangement knowing that there is going to be a risk. Becoming a landlord means there are some responsibilities and legal requirements that you need to be aware of. You are going to be liable for repairs and maintenance on the property as well as changes to how stamp duty works and future capital gains tax liabilities.

You’ll also need to research the market where you’re looking to buy. Are people willing to pay the rent you’re going to need to cover repayments? Also, look at the market value of your identified property in that area. There is always going to be a danger that the property goes down in value, rather than up.


Contact Us Today

Regardless of what you might see in movies or on TV, the realities of real estate investing means that it isn’t something to enter into blindly. Like any financial commitment on this scale, you need to do your research and make it specific to you and the location of the property you are buying. If you do that, we hope that your property is going to let you create the life you’ve always wanted. 

So, if you are looking to get a mortgage or advice on anything surrounding mortgages and properties, then Mortgages MK have you covered. Visit our contact page for more details or simply call us today on 01908 803362.


Your home 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.

Mortgages MK is a trading name of Astons Financial Services LLP which is an appointed representative Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited who are authorised and regulated by the Financial Conduct Authority.

Astons Financial Services LLP. Registered Office: 26 St John Street, Newport Pagnell, Buckinghamshire MK16 8HJ. Registered in England No: OC361518

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