The introduction of assured shorthold tenancies in 1997, which made the rights of tenants and landlords more equal, created the buy-to-let market that exists today. Some say buy-to-let has forced up property prices but there is no doubt it has a part to play as first time buyers are getting older and younger people are renting. The whole point of buying-to-let is for its investment potential – both capital growth on the value of the property and the income it generates in rent. Buy-to-let lending is to support investment, not home ownership. It is important to note that lenders carry out post-completion checks in relation to scheme abuse to see who is residing at the property. There are risks like any investment.

For example:

  • it will not normally be in your interest to realise, cancel or surrender any existing investments in order to purchase a property to let
  • there could be difficulties with tenants who breach agreements impacting time and legal fees, as well as income
  • periods of rental voids if the property is not tenanted (during redecoration or change of tenants)
  • the higher the sum borrowed the more you are at risk of rent not covering your loans or expenses
  • investing in a single property can result in a lack of diversity if you do not already have a good spread of existing investments.

The Financial Conduct Authority does not regulate Buy to Let mortgages

Think carefully before securing debt against your home, your home may be repossessed if you do not keep up repayments on your mortgage.