Buy to Let Mortgage – The Pros and Cons


Before committing to a buy to let mortgage there are things to things to think about and weigh up which we will look at here and help you make an informed decision as to whether buy to let mortgage is the right decision for you;


  • Capital gain:  It is known that the value of your property can go down as well as up, however property in the long term has served investors well with an increase in value.
  • Generate an Income: Rental properties can often help provide an additional income.  Do ensure however you factor in any ongoing costs of the property and check the rental yield for the rate of return.
  • Demand: There is currently a lack of affordable housing and the rental market is ever rising. Demand is currently high which is always a good call for investors in property. 

Owning a Buy to Let Property has the potential to offer a great return however there can also be disadvantages which we have listed below;

  • Increased Stamp duty: If you are investing in a buy to let this is often a second property which in turn means you are subject to increased stamp duty. At present its 3% additional for a second property in the UK which has been implemented since 2016.
  • Rental voids: There is always the risk when you buy a property to rent that there will be times when there is nobody in the property and you need to factor this into your budget.  
  • Non-payment of rent:  There is also the risk and worry of a bad tenant. Not only is there the non-payment risk but also equally court costs if it gets that far.
  • Drop-in property value: Yes, sadly for some property investors they thought the only way was up, but in reality, the value of any property can also go down and may even fall below what you originally purchased it for.
  • Legislation: The law and rules surrounding being a landlord can be a minefield to many being difficult to stay on top of.  Ignorance will not be excused and if you are caught not following legislation then court and huge fines are waiting.

If you are thinking of taking out a buy to let mortgage, then we recommend you speak to one of our experts who can ensure that you are fully informed and have all the information you need. Contact us today for more information.

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