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Mortgage Advisor & Director
Buy-to-let mortgages can be a great way to invest in property, but can you get one if you’re a first-time buyer or have no landlord experience? Here, you will learn whether this is possible for you, understand the criteria you will need to meet, and find out how to compare the latest rates and deals for free.
Can you get a buy-to-let mortgage as a first-time buyer?
Yes. Although the majority of buy-to-let mortgage lenders prefer borrowers with landlord experience as they are generally lower risk, there are investment mortgages for:
- First-time buyers: People who haven’t owned any kind of property before
- First-time landlords: People who don’t own any buy-to-let properties or haven’t operated one in the last 12 months, but may have a residential mortgage
First-time buyers will have far fewer options than first-time landlords who own their own home, but there are lenders out there with a high enough appetite for risk to help them.
In general, first-time buyers and new landlords are expected to put down higher deposits, have strong rental projects and potentially pay a higher interest rate.
Eligibility criteria for first-time buyers
The criteria you need to meet as a first-time buyer can be more stringent in the buy-to-let space, since you have no track record in property for the mortgage lender to go off.
The typical requirements are as follows:
- Deposit requirements: They can be higher for first-time buyers, with lenders typically asking for around 30-40% of the property’s value.
- Personal income: Most lenders will be keen to see that you have personal income on top of a strong rental projection. You will need to be earning around £25k per year and affordability may be based more on your salary than the rental income.
- A strong rental projection: In addition to your personal salary, you will need a rental income forecast confirming that the property is likely to generate enough rent to cover 125-145% of the monthly mortgage payments.
- Property types: Some lenders place restrictions on certain higher-risk types of buy-to-let property if the applicant is a first-time buyer. These include houses of multiple occupation (HMO), and multi-unit freehold blocks.
- Age: Age requirements can be stricter for first-time buyer buy-to-lets, with some lenders having a minimum age limit of 25 and an upper cap of 75.
- Credit history: Having clean credit will help boost your mortgage prospects, but it may still be possible to get approved with some types of bad credit, depending on the age and severity of the issues, as well as why they occurred.
If you are a first-time landlord, but not a first-time buyer, your chances of securing a buy-to-let mortgage will be much stronger if you have owned a residential property for at least six months, although a minority of lenders may consider you before this point.
How to get a buy-to-let mortgage as a first-time buyer
Seeking expert advice is a must if you are a first-time buyer or have no landlord experience. With far fewer lenders to choose from, your chances of mortgage approval and landing a favourable interest rate are slimmer than they would be if you were an established landlord.
You can compare buy-to-let mortgage rates online for free with Teito, and after you have chosen a deal that fits your requirements, one of our buy-to-let mortgage brokers will review your case, make sure you are eligible, and guide you through your application.
Your mortgage broker will guide you through the following steps:
- Obtaining a rental projection
- Downloading and optimising your credit reports
- Finding a lender who specialises in first-time buyers and securing your rate
Ready to get started? Choose one of the options below to begin your mortgage journey with us:
Find a better buy-to-let-mortgage deal on Teito
How much stamp duty will you need to pay?
If you are purchasing a buy-to-let and don’t own any other properties at all, you will miss out on first-time buyer stamp duty relief, but won’t have to pay the additional surcharge that is usually associated with investment properties and second homes either.
First-time landlords who do own residential property will pay the additional surcharge.
Please note that the information provided about stamp duty was accurate at the time of writing (June 2024), but the rules and regulations around this can change. For the latest stamp duty land tax rates, consult the UK Government’s website.
Tips for first-time landlords
Whether you’re a first-time buyer or a homeowner who is just starting out as a landlord, here are some tips to help you navigate the world of property investment:
Consider protection insurance: It’s wise to make sure you have a safety net in place to cover you in the event of rental void periods and the general risks associated with letting to tenants, such as damage to the property. There are a wide range of landlord insurance policies available for this, so it’s a good idea to shop around.
Look into letting agencies: Some landlords may not mind the idea of being on call 24 hours a day, but if this is an issue for you, appointing a letting agency might be a worthwhile investment. They can help you find tenants, collect rent, manage the property on your behalf, and provide other services.
Be aware of every cost: Your mortgage repayments, fees and stamp duty are obvious costs to include in your budgeting, but be sure to familiarise yourself with every cost involved with being a landlord. They include property surveys, solicitor fees plus maintenance and repair costs, as well as optional extras such as furniture and white goods, landlord insurance policies, and letting agency fees.
Speak to a mortgage broker: This is recommended as buy-to-let lenders for first-time buyers and new landlords are difficult to come by without professional advice. A broker who specialises in this area can help you find the best deal through their knowledge, experience and extensive list of mortgage lender contacts.
Which mortgage lenders are available?
The number of approachable mortgage lenders will be higher if you already own a residential property and have been paying a mortgage on it for at least six months.
Buy-to-let lenders who offer mortgages for first-time landlords include:
Some of the lenders who will offer first-time landlord mortgages will also consider buy-to-let applications from first-time buyers, with caveats attached, such as:
- Gatehouse Bank: Will consider applications from first-time buyers as long as the property is not an HMO or a multi-unit freehold block.
- Vida Home Loans: Will consider first-time buyers with at least 20% deposit.
- Buckinghamshire Building Society: Will consider lending but will expect a reasonable explanation for why the applicant’s first property is a buy-to-let, and will base the affordability assessment on the borrower’s personal income.
- Hodge: Offers holiday let mortgages to first-time buyers, but will decline an application if the property is situated in a holiday let complex
The lenders listed above are merely a small sample of what’s available. You can compare rates and deals across the market for free through Teito - get started here.
Converting a first-time buyer mortgage to buy-to-let
It is possible to convert a residential mortgage that you took out as a first-time buyer to a buy-to-let agreement, but this will mean going through the full remortgage process, either with your current mortgage provider or another lender who offers buy-to-let.
Whether your application to change your mortgage type is approved will depend on:
- How long you have owned the property: Most lenders will expect you to have owned your home for six months or longer before you can refinance onto a buy-to-let agreement, but a minority of them may consider it sooner.
- The strength of the investment: This will be based on the projected rental income.
- How closely you fit the criteria for buy-to-let: As you are applying to change your mortgage type, your eligibility will be assessed from scratch, just like it would be if you were applying for a new buy-to-let mortgage. See the criteria section earlier in this article to find out what the requirements are.
If you need to convert a first-time buyer mortgage to buy-to-let, we have brokers who specialise in this. They can offer you bespoke advice and help you get it done.
Why choose Teito for your buy-to-let mortgage needs?
You can compare buy-to-let mortgage rates and deals for free through Teito, and we have brokers on hand to provide bespoke guidance for first-time buyers in this market.
Here are just some of the reasons why first-time landlords choose Teito:
- We have access to exclusive buy-to-let deals
- Our brokers are whole-of-market and experts in this field
- We are five-star rated on leading review websites
- You can secure a mortgage in principle in minutes
Ready to compare buy-to-let mortgage rates and deals, and take advantage of a free, no-obligation chat with a mortgage broker? Get started here.
FAQs
Yes but you might find approval more difficult as HMOs are a property type that some lenders consider high risk and may apply restrictions to.
Common caveats you might come across include stricter LTV caps and a limit on the number of lettable rooms the property can have. Borrowers may also need to apply for a licence from the local council to operate the property, unless it is exempt.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.