Is a buy to let mortgage right for me?

June 5, 2015

Buy to let mortgages are becoming more and more desirable, to those with saved equity. In cities like London where demand for rental space is sky-high, there are certainly some significant advantages of buying a property specifically to rent it out. The improvements to the lending landscape means that buy to let mortgages are not as heavily regulated as they were in previous years. Plus, recent changes to legislation has added more flexibility to the market, for example even pensions can now be used to purchase buy to let’s.


Banks and building societies are back in a position now where they can easily lend to buyers. Indeed, lenders are supplying prospective landlords with more buy-to-let mortgages than ever before. The number of five-year fixed rate loans priced at below five per cent is at its highest ever.

The average rate on a five-year fix has dropped from 4.65 per cent to 4.25 per cent over the past year. Also during this period, the typical two-year fix has dropped from 3.94 per cent to 3.45 per cent.

So what key things should you consider before committing to purchasing a buy to rent mortgage?

Location is everything. It is strongly advisable that you buy your property in an area where there is high rental demand. Luckily in London this is most areas. Whereas elsewhere in the country only areas with high amounts of young professionals not yet able to commit to buying a home come recommended as buy to let mortgage areas, London affords the buyer much more in the way of choice. If you want to ensure you receive an excellent rental income for your property, consider buying in areas with good public schools, good commuter links and nearby amenities.

When it comes to types of property, you may wish to consider who your target audience is. Do you want to house students, families or young professionals? Each of these groups want very different things from a home. This is why new builds can be hugely popular for buy to let landlords, as these properties can be altered to appeal to anyone.

Do your research when it comes to mortgages. There are mortgage lenders both on the high street and online that can offer buyers a variety of different products and it’s worth it to shop around until you get the one that’s right for you.

Many people see property as a key investment, but don’t want the hassle that comes with being a landlord. Here at Waltham Estates we take care of everything. Firstly, we work closely with credit check agencies to ensure prospective tenants are reliable and undertake full referencing before recommending any tenants as suitable. Being ARLA affiliated, all our procedures and processes have been given the official seal of approval from The Association of Residential Letting Agents. For the more risk averse investors, we offer a Guaranteed Rent Service. This means we guarantee that your rent gets paid, whether your property is occupied or vacant.
Call us today on 020 8509 0444 for more information on how we can help you find the ideal tenants and ensure you receive the best rental return on your buy to let property.

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