What we cover in this guide
- Getting a first-time buyer Buy-to-Let mortgage
- Read our Buy-to-Let guide
- Try our Buy-to-Let mortgage calculator
- How much deposit do I need?
- Buy-to-Let mortgage rates for first-time buyers
- Choosing the right first-time buyer Buy-to-Let lender
- Can I get a Buy-to-Let mortgage as a first-time buyer with bad credit?
Getting a first-time buyer Buy-to-Let mortgage
From the outside, becoming a Buy-to-Let landlord looks like an excellent investment opportunity. Not only will you receive rental income from tenants, but you will own an asset that should only gain in value over time. Rents set at a rate to cover your mortgage, plus a margin on top for costs and profit, can make Buy-to-Let seem like a no-brainer.
But what if you have never owned a property before? We know that it’s indeed possible, and being a first-time buyer should not put you off. You’ll just need to be prepared and understand all the factors that need to be taken into account.
How much rent should I charge?
Getting a Buy-to-Let as a first-time buyer can leave you unsure about what rates to charge. The amount of rent you will be able to charge depends on a few factors. Some determining factors include:
- Property type
- Local area
- Prevailing market rates at the time
- Is the property furnished or unfurnished?
However, generally, lenders will expect to see a rent of around 125%-145% of the mortgage payments. As they will need to be confident that you can afford the mortgage.
What about other costs?
As with any property purchase, there are many costs connected with buying a Buy-to-Let. The usual costs are for the survey, solicitor’s fees, and stamp duty. You may also have to pay mortgage arrangement fees, according to the deal you get.
On top of this, you will need to take out landlord insurance in addition to the usual building insurance. You’ll need to make allowances for property management fees if you do not want to administer the let and deal with tenants yourself. Finally, you will need to budget for property maintenance, repairs, decoration, white goods, and furnishings.
What documents are needed for a first-time landlord?
The documents are mostly the same as those you would need if you were applying for a conventional mortgage. These would be:
- a valid form of ID,
- a proof of address,
- proof of income.
You may need to provide other documents according to your personal circumstances. For example, an up-to-date copy of your contract if you are working as a contractor. A professional Buy-to-Let mortgage adviser will be able to take you through all the requirements.
Can I live in my Buy-to-Let property?
There is a quick answer to this, and it is unfortunately no. This is because in the agreement it states that the sole purpose of the property is for it to be let out to tenants. Lenders make checks to ensure that borrowers are not living in the property and will take severe action if you are.