Client
An investor buying a first rental property, with no prior experience as a landlord. The purchase was funded from capital the client wanted to put into property rather than leave on deposit.
Objective
To secure a buy to let mortgage on an accepted offer, quickly enough to hold the property, with a lender that would accept a landlord with no letting history.
Situation
The client came to us with the offer already accepted. Rates had been rising, but the asking price looked well judged against comparable stock in the area and there was a reasonable case for capital growth over the hold period.
Two problems ran alongside each other.
The first was experience. A number of buy to let lenders want to see an applicant who already owns and lets property, and some will not take a first time landlord at all. Others take them but tighten terms, whether on rate, on the stress rate applied to the rental figure, or on minimum income.
The second was time. Estate agents commonly want sight of an agreement in principle before they will mark a property under offer and stop viewings. Until that happens the property stays exposed to a competing bid, and the buyer has no real hold on it.
Challenges
- A first time landlord with no letting track record
- An offer already accepted, with viewings continuing until the property was secured
- A rising rate environment narrowing what was available week to week
- Whole of market advice needed on the purchase process as well as the mortgage
What We Did
We ran the lender search around first time landlord acceptance first and price second, on the basis that a competitive rate from a lender that would decline the applicant is worth nothing.
The appointment produced the document list the same day. The client returned everything by email overnight, which let the full application go in the following day rather than the following week. On a case where the constraint is a rival bid rather than a fixed deadline, days matter.
Alongside the mortgage we covered the purchase mechanics: what the agent would want to see and when, how the rental figure would be stress tested, and where the costs fall outside the deposit. Whether to hold a first investment property personally or through a company is part of a wider mortgage strategy and is worth settling before an application goes in.
Solution
A lender accepting first time landlords, at the best rate available to that applicant profile at the time of submission.
Outcome
The full mortgage application was submitted the day after the initial appointment, with documents received overnight, and the case secured at the rate available in a rising market.
Conclusion
First time landlords tend to assume the deposit is the qualifying test. Lender appetite for an applicant with no letting history is the earlier hurdle, and it varies enough across the market that the same client can be declined by one lender and offered a competitive rate by another. Establishing which lenders take the profile before the search starts is what allows an application to go in at speed rather than after two false starts.
Frequently Asked Questions
Can you get a buy to let mortgage as a first time landlord?
Yes, though the lender list is shorter. Some buy to let lenders require existing landlord experience, and others accept first time landlords but apply a minimum income requirement or a tighter stress rate on the rental income.
Do you need to own your own home to get a buy to let mortgage?
Many lenders require the applicant to be an existing homeowner, and first time buyer landlords face a much narrower market. It is one of the first criteria checked, alongside letting experience and income.
How quickly can a buy to let mortgage application be submitted?
Within a day of the initial appointment where documents are ready. Payslips or accounts, bank statements, identification and proof of deposit are the usual requirements, and having them to hand is what removes the delay.
Why do estate agents want an agreement in principle?
It evidences that a buyer can fund the purchase, and most agents will not take a property off the market without one. Until viewings stop, a competing offer can still displace an accepted one.
Final Thoughts
A first purchase as a landlord runs on two things at once: finding a lender that will take an applicant with no letting history, and moving fast enough that the property is actually held while that happens. Neither is difficult with whole of market access, but both are considerably harder once an application has already been submitted to the wrong lender.
UK Mortgage Broker is a whole-of-market broker, directly authorised and regulated by the Financial Conduct Authority. Circumstances vary and the result here reflects these clients alone. It is not an indication of terms available to others. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call 01628 969 500 or email info@uk-mortgagebroker.co.uk to speak with a qualified adviser.
Related Pages
- First Time Landlord Purchase with Gifted Equity – Another first purchase as a landlord, funded differently.
- Buy to Let Remortgage – A landlord refinancing an existing rental property.
- How Much Can I Borrow – What income and rental figures translate to on a buy to let application.
- Mortgage Rates UK – How deposit size and applicant profile affect the rate offered.
- Can I Get a Mortgage – What lenders check on income, deposit and credit before approving an application.
