Can First-Time Buyers Get a Buy-to-Let Mortgage in London?

If you’re a first-time buyer, investing in buy-to-let could be a way to get a foot on the housing ladder and earn extra income while you save for your dream home but you will require a buy-to-let mortgage even as a first time buyer.

You will need money upfront for a deposit and enough income to cover your mortgage payments if you have no rent coming in. As a first-time buyer, you may need help getting a buy-to-let mortgage and should seek expert mortgage advice to see if it’s right for you.

But if you do your sums and plan your project carefully, buy-to-let can be a worthwhile and profitable first step to homeownership. Some of the most affordable areas to buy property in the London Borough include Barking and Dagenham, where average property prices are around £370,000 and £356,000 for first-time buyers. With great transport links to attract renters, buying property here could help you to generate a good level of extra income.

Based on our experience advising new landlords, we answer some of the most frequently asked questions about buy-to-let mortgages for first-time buyers.

Why Do First-Time Buyers Invest In Buy-To-Let Property?

The idea of becoming a landlord before you’ve even purchased a house of your own to live in may sound odd, but there are some excellent reasons why a first-time buyer may decide to invest in buy-to-let property.

You may have a decent income and some savings, but you need more for the deposit on a property where you currently live. Buying-to-let in a cheaper area would give you a foot on the property ladder, a regular income and a home, should you wish to relocate later on.

Despite changes to taxation, which has made buy-to-let less lucrative, returns can still be much higher than from saving accounts and other investments.

Pros & Cons Of Buy-To-Let As A First-Time Buyer

While buying a property to rent out as a first-time buyer has many benefits, there will be lots of new processes and legal requirements to get familiar with. Before you decide whether it is the right decision for you, take a read through our list of pros and cons:

Pros of buy-to-let for first time buyers

High potential rental yields

There is a high demand for rental properties and high rental income can be achieved with buy-to-let properties. For example, the average monthly rent in June 2026 for property in Barking and Dagenham was £1,696 according to the Office of National Statistics (ONS). This was an increase of 2.8% from 12 months earlier.

For first time buyers, rental income can cover the mortgage payments if you’re not ready to pay this from your regular income for your own property. If you are making a good profit, you can also use some of the proceedings towards paying the mortgage for your own home when you decide to buy.

Property appreciation and deposit for your own home

Over time, property value tends to increase. While there can be fluctuations, over a period of 5 years or more, there is a good chance that the property will increase in value. In Redbridge, the average property price was £443,137 in June 2021. Five years later in June 2026, the average house price had grown to £495,977 (Land Registry data).

This means buyers would have made an average profit of over £50,000 in that period. First-time buyers of BTL property that increases in value have the opportunity to sell the BTL to use the profit for a deposit on another property.

Want to become a more informed landlord? Read up on void period costs for landlords and building a property portfolio.

Financial security

Purchasing a BTL as a first-time buyer can also set you up for financial security. By generating monthly rental income and the potential for property value appreciation, you can start building for your financial future. Your BTL property can help set you up for a financially secure retirement.

Cons of buy-to-let for first time buyers

Higher mortgage rates and deposit

BTL mortgages usually have higher interest rates than standard residential properties and you’ll be required to put down a larger percentage of deposit.

Most BTL mortgage lenders request at least 25% deposit, whereas a mortgage to buy your own home will typically require just 5-10%. There will also be less mortgage products available for BTL properties and it can be more difficult to get approved.

Stamp duty

If you were buying a first home to live in, you would usually benefit from stamp duty relief up to the threshold limit but this does not apply to properties that will not be your main residence, so when buying a property to let it out, you will not be eligible for any first-time buyer relief.

The good news is that you won’t have to pay the 5% surcharge on your first property, as this only applies when buying a second property. However, if you buy another property in future without selling your BTL, the surcharge will apply as you will own two properties.

Landlord responsibilities and other tasks

There are numerous legal responsibilities as a landlord that you will need to comply with, including tax obligations and adhering to regulations.

If you have never owned your own property, you might not be familiar with some of the processes involved in buying a property, which will mean you have lots of new concepts to become familiar with.

Buy-to-Let Mortgages vs Standard Residential Mortgages: Key Differences

There are some key differences between buy-to-let mortgages and standard mortgages, particularly related to deposit amounts, affordability testing and tax, which are summarised below:

Factor	Residential mortgage	Buy-to-let mortgage
Deposit required	Typically 5–10%+	Typically 20–25%+; 25% is common
Typical interest rates	Generally lower	Generally higher than residential rates
Affordability test	Mainly based on personal income, expenditure and income multiples	Mainly based on rental cover (ICR); rent commonly needs to cover around 125–145% of stressed mortgage interest
Tax treatment	Mortgage interest on your own home is not tax deductible	Individual landlords cannot deduct mortgage interest in full; instead they generally receive a 20% tax credit for finance costs

Do First Time Buyers Need A Buy-To-Let Mortgage?

You can rent a property without a buy-to-let mortgage only if you own the property outright. If you need a mortgage, you must be honest with your lender about your intentions for the property.

If you let your property without consent from your lender, you will breach the terms and conditions of the loan, and your lender can require immediate repayment of the entire loan amount.

Can First Time Buyers Get A Buy To Let Mortgage​?

If you are wondering can a first-time buyer buy to let, the answer is yes, but you may find it more challenging to secure a loan than if you have owned residential property before. This is because fewer buy-to-let mortgages are available to first-time buyers – around a fifth by some reckoning. Plus, you’ll likely need to put down a bigger deposit.

Purchasing a buy to let mortgage is much like residential mortgages with three main differences – they come with higher interest rates and fees, a lower loan-to-value ratio, and are generally offered on an interest-only basis. Lenders consider rental properties riskier because most buy-to-let borrowers rely on rental income to cover the mortgage. If your tenants have problems paying the rent, this could have a knock-on effect on the mortgage repayments.

What Are The Criteria For Getting A Buy-To-Let Mortgage?

There is a different set of criteria for getting a buy-to-let mortgage compared to a standard residential mortgage:

Deposit

To get a mortgage on an investment property, you will need a deposit of at least 20%-25% of the property’s value, depending on the lender and the products you qualify for. Some lenders require up to 40%, but most request a 25% deposit. The larger your deposit, the more likely you will get a mortgage offer and a better rate.

Affordability/Rental cover ratio

Prepare yourself for strict affordability tests. Most lenders need convincing that the profit from your rental property will cover 125% or even 145% of mortgage payments before they consider offering you a loan.

Income multiples

Some lenders will provide a loan of up to 4-5x your income but this varies across different lenders and the rental cover ratio will often have the biggest influence on the amount you can borrow.

Minimum income requirements

Your personal income will be an important factor in the decision, and most lenders will require a minimum salary of £25,000. This is because buy-to-let properties are deemed to be a higher risk and lenders need to manage that risk. You can use a mortgage calculator to check whether you are likely to be approved for a buy-to-let and how much you could potentially borrow.

Credit score expectations

Like any other mortgage, you will also need a good credit record and be able to comfortably afford the repayments on any other borrowings you may have. Most lenders have upper and lower age limits for mortgages. Most require you to be 21 years or older at the start of the mortgage and younger than 70 when the mortgage is due to finish.

Typical arrangements fees

Arrangement fees on buy to let mortgages tend to be higher, with some charging £2,000 upfront. Some lenders offer mortgages with no arrangement fees, but the interest rates are usually higher.

Summary table of BTL criteria

Requirement	Typical buy-to-let criteria
Deposit	Usually 20–25%; 25% is common, although some lenders require up to 40%
Rental cover	Rental income typically needs to cover 125–145% of mortgage payments
Income multiple	Some lenders may lend up to 4–5× personal income
Minimum income	Often around £25,000 a year
Credit score	Generally requires a good credit history and manageable existing debts
Age requirements	Commonly 21+ when applying and under 70 when the mortgage ends, although lender limits vary
Arrangement fees	Can be around £2,000 or more; fee-free products may carry higher interest rates

What If You’re Refused Or Have Bad Credit?

Talk to a mortgage broker about the different products available, and they could provide mortgage advice to help you overcome any difficulties. If you still struggle to obtain an offer, you may increase your chances using a guarantor.

Getting a buy-to-let mortgage may still be possible when you’ve been refused or have bad credit, but it will be more difficult than for other applicants. As with anyone looking to borrow money after a bad credit history, it’s advisable to try and improve your credit rating as much as possible by paying off debts, not taking on any new loans and ensuring you don’t miss any payments in the run-up to your application.

You may need to provide a bigger deposit and look at properties with a higher rental yield than other applicants.

Which Lenders Offer Buy-To-Let Mortgages?

High street banks, building societies and specialist lenders all offer buy-to-let mortgages. Some of these will be open to first-time buyers, so start by looking at what’s available on comparison sites.

Specific mortgages for first-time landlords can be hard to track down; you may need to consult a mortgage broker with experience in this area.

Buy-to-Let Mortgage Rates For First-Time Buyers In 2026

The BTL mortgage rates you are eligible for will depend on factors such as your deposit amount (and LTV), credit history and specific circumstances. Having a larger deposit will often help you to secure the best rates and fixed rate mortgages tend to be lower than tracker mortgages but this is not always the case.

Tracker mortgages are linked to the Bank of England’s base rate, which has remained at 3.75% throughout 2026 up to August but trackers can fluctuate, so your mortgage payments could go up or down from the monthly payment based on it.

First-Time Buyer Buy-to-Let Stamp Duty Explained

In recent years, the government has changed stamp duty in a way that impacts buy-to-let landlords. There is currently a 5% surcharge on second homes. The good news for first-time buyers is that you won’t need to pay the surcharge as you don’t already own property. Use this calculator from Which? to discover how much you will need to pay.

However, you won’t be eligible for the reduced fee for first-time buyers, which is a nil rate band on property value up to £300,000 (which increased from £425,000). This was introduced to help first-time buyers onto the housing ladder (first-time buyers pay no stamp duty on the first £300,000 of a home costing up to £500,000). This is because the benefit doesn’t apply to buy-to-let properties.

What Documents Are Needed For A First-Time Buyer Buy-To-Let Mortgage Application?

As with any other applicant, you’ll need to provide documents that prove your identity, funds, and income, such as:

• Bank statements
• Payslips (last three and P60)
• ID (passport or driving licence)
• 2 x proof of address (utility bill, council tax bill or bank statement dated within last 3 months)
• Proof of deposit

It will also help to provide a comprehensive calculation of the predicted rental yield, including all costs and expenses to show that the rental property will meet financial requirements.

Want to become a more informed landlord? Explore how much tax you pay on rental income and capital gains tax on rental property.

Can I Live In My Buy-To-Let Property?

Not if you have taken out a buy-to-let mortgage. The terms of your mortgage won’t allow you to live in the home yourself.

If you want to live in the property while renting out a room, you can apply for a normal residential mortgage, but you should tell the lender of your intentions.

Is It Illegal To Rent Out A House Without A Buy-To-Let Mortgage?

It could be. You will have obtained a mortgage without declaring the full facts to your lender, so technically, you could be committing fraud. If you already have a residential mortgage on a property, and you inform the lender, some will allow you to continue on the same basis by giving you ‘permission to let’, but many will ask you to move to a buy-to-let product.

Can First-Time Buy-To-Let Investors Use The Government’s House Affordability Schemes?

No, these schemes aim to help people get on the housing ladder and find a home to live in, so you won’t be eligible. Schemes such as the First Homes scheme and shared ownership schemes are only available for buying properties that will be main residences.

Can I Get My First-Time Buyer Buy-To-Let Mortgage Through A Limited Company?

Yes. If you are a higher-rate taxpayer, renting out property through a limited company usually has some tax efficiency advantages. Another benefit is that you may still be eligible for the first time buyer relief when you purchase property as an individual. As mortgage interest relief is restricted on individually owned buy-to-lets, more landlords are exploring the tax-efficiency potential of setting up as a limited company.

However, limited companies are considered riskier than individuals because of their limited liability status, so you may find getting a mortgage offer even harder. Some lenders will require the director of the company to enter into a personal guarantee. You may need to use a specialist broker to find you a suitable lender as a limited company and first-time buyer.

It’s important to receive sound mortgage advice to help you make the right decision.

How Does Buy-To-Let Affect Your Chances Of Buying Your Own Home?

If you already have a mortgage on a rental property, you may find it harder to obtain a second one on a home to live in, as lenders will look at all of your debts when deciding whether to make an offer.

If you wish to hold on to your buy-to-let property, you must also pay the stamp duty surcharge on the property you buy to live in.

Does Owning A Buy-To-Let Mean I’m No Longer A First-Time Buyer?

If you purchase a buy-to-let before your own residential property, HMRC will not treat you as a first-time buyer for stamp duty relief purposes when you later buy a residential home to live in. The first-time buyer relief only applies when the homebuyer has never owned another property of any type.

Find Out More

If you are new to renting out property in Silvertown, Hackney or Newbury Park, contact Sandra Davidson Estate Agents today. We’d be happy to advise you further on the finer details of becoming a Landlord.

Looking for a stress-free lettings solution? Then explore our guaranteed rent services in Harrow, Barnet, Enfield, Ealing, Luton & beyond.

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