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Author: Carl Shave-Director
Updated on February 16th, 2024

Can you get a Buy-to-Let mortgage as a first-time buyer?

The short answer is yes, but we can’t pretend that it will be plain sailing.

There are some specialist lenders who will consider extending a mortgage on a Buy-to-Let property to a first-time buyer. However, your options will be far fewer than if you were simply looking for a conventional residential mortgage.

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Most lenders take a cautious approach and want Buy-to-Let borrowers to have at least owned a residential property. Other lenders are willing to lend if you have already had one Buy-to-Let property under your belt. The problem is that nobody really wants to be the first to accept you.

Lenders’ reserved nature reduces your options for obtaining a Buy-to-Let mortgage. But this does not mean no one will lend to you. By talking to a specialist broker, you’ll be able to find out those that will be able to help.

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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.

Read Our Buy to Let Guide

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Fill out our quick and easy Buy to Let mortgage calculator below. We only require a few details to see how much you may be able to borrow.

NO CREDIT CHECKS!

How much deposit do I need?

In the eyes of a mortgage lender, you present a greater risk. Therefore, they will ask you for a larger-than-average level of deposit. Expect to need at least 25% of the property’s value, although in some cases you may require up to 60%.

The positive spin on this is that the larger the deposit you can provide, the more likely you  are to be accepted. You will also increase your chances of getting a better deal.

The rent will cover the mortgage anyway – what’s all the fuss about?

It’s true that rental income should cover the mortgage and then some extra. But, this is only if everything goes to plan.

There are likely to be times when the property will stand vacant, leaving you with no income from it during that period. So, you must always budget adequately for all the associated costs you will face as a landlord, such as insurance, maintenance, and agent fees. It’s a good idea to allow for a contingency in case your property is empty for a time or rent payments are missed.

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.

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Buy-to-let mortgage rates for first-time buyers

Typically, Buy-to-Let mortgage interest rates are higher than those of a standard mortgage. As a first-time buyer, there are many factors that influence what rates you pay. This includes:

  • Lender’s individual criteria
  • Deposit size
  • Your credit score
  • The property value
  • Potential rental income

Buy-to-Let mortgage rates will all depend on how lenders perceive your circumstances during the application.

To get the most accurate idea of what interest rates you could pay, it’s best to speak to a broker. They will have an in-depth understanding of the lenders and be up-to-date with the current market.

Choosing the right first-time buyer Buy-to-Let lender

It has usually been the case that you would need to approach a specialist lender in order to obtain a Buy to Let mortgage for a first time buyer, but there are now a few high street lenders offering these kinds of products as well.

Our experienced team at The Mortgage Centres enjoys great relationships with all kinds of lenders – both mainstream and specialists – and will be able to identify exactly the right lender and product to meet your individual needs.

Can I get a Buy-to-Let mortgage as a first-time buyer with bad credit?

Yes, it is possible to do so if you have a bad credit record. But, your options will be very limited.

Lenders will consider many factors when reviewing your application, including:

  • Your income
  • How much deposit you can provide?
  • What type of bad credit incident(s) occurred?
  • How long ago since the incident(s) occurred?

As whole-market advisors, we have access to a range of specialist lenders who look at the wider picture, meaning they are likely and are willing to lend to first-time buyers with bad credit. Please get in touch and we will be able to give you advice based on your circumstances.

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