Specialist buy-to-let mortgages:

First-time landlords

Many lenders are happy to consider first-time landlords. The available options will depend on whether the applicant already owns their home, their wider financial position and the type of rental property being purchased.

First-time landlord or first-time buyer?

A first-time landlord is someone who has not previously owned a rental property but may already own their own home.

A first-time buyer and first-time landlord has never owned any property. The lender pool is narrower because some lenders require applicants to have experience of owning and maintaining a home. Nevertheless, suitable buy-to-let mortgages are available.

Some lenders require first-time landlords to be owner-occupiers, while others accept tenants, applicants living with family and genuine first-time buyers.

Personal circumstances

Rental income remains central to the mortgage assessment, but lenders may also consider:

  • Personal income, employment and existing commitments

  • Credit history

  • The source and size of the deposit

  • Financial reserves for repairs and periods without tenants

  • The applicant’s understanding of their responsibilities as a landlord

Minimum income requirements vary. Some lenders have no fixed minimum, while others require evidence of earnings at a particular level.

See Rental assessments & affordability calculationsfor more information.

Choosing a first investment property

A conventional house or self-contained flat let on a standard tenancy normally provides the widest choice of lenders. The property should be readily lettable and suitable for resale into the wider residential market.

HMOs, multi-unit freehold blocks, holiday lets and serviced accommodation can also be considered, but some lenders require previous landlord or relevant business experience. Others may accept a first-time landlord with a larger deposit, suitable financial reserves or an experienced managing agent.

A specialist broker can establish whether the proposed property is suitable before money is committed to valuation, legal work or a non-refundable auction deposit.

Buying through a limited company

A first-time landlord can purchase through a limited company, usually an SPV established specifically for property investment. Previous landlord experience is not automatically required simply because a company is being used.

Buying through a company may also help someone who has never personally owned property preserve their first-time buyer status for certain tax purposes when they later buy their own home. The company, rather than the individual, acquires the investment property. However, definitions and tax rules vary, so this should be confirmed with a suitably qualified tax adviser.

The lender will still assess the directors and relevant shareholders personally and will normally require personal guarantees.

For more information, see Limited company buy-to-let mortgages and SPV mortgages.

Accidental and consumer landlords

Someone letting an inherited property or a former home may be treated differently from a person purchasing solely as a business investment. In some circumstances, the mortgage may fall within the consumer buy-to-let regime.

See here for more information about Consumer BTL mortgages.

Getting the first mortgage right

The first purchase can influence future borrowing, particularly where the intention is to build a portfolio. Choosing an appropriate property, ownership structure and lender at the outset can make subsequent applications considerably easier. A specialist buy-to-let broker can identify lenders comfortable with both the applicant’s circumstances and the proposed investment.