Buy to Let Options for First Time Landlords: Clear Guidance & Smart Choices

Buy to Let Options for First Time Landlords: Clear Guidance & Smart Choices

Entering the rental market for the first time can feel like a major step, especially when navigating lender criteria, deposit requirements and rental income rules. The buy-to-let sector is designed to support both experienced investors and newcomers, but first-time landlords face a specific set of considerations that shape their borrowing options.

This guide explains the key buy to let options for first time landlords, how lenders assess applications, and what practical steps can help you prepare. This article provides general information only and does not offer regulated mortgage advice.

Can You Get a Buy to Let Mortgage as a First-Time Landlord?

Yes. Many lenders are open to first-time landlords, although criteria can be more selective than for experienced investors. Lenders want to understand:

  • Your income and financial stability
  • How the property will perform as a rental investment
  • Whether the planned rent meets stress-test requirements
  • Your credit history
  • Your ability to manage the responsibilities of being a landlord

While mainstream lenders may restrict certain features, specialist lenders offer flexible pathways.

Deposit Requirements for First-Time Landlords

Most buy-to-let lenders require a 25% deposit for first-time landlords. Some may consider 20% deposits, but these usually require:

  • Strong rental yield
  • Excellent credit history
  • Stable personal income
  • A straightforward property type

Deposits of 30–35% open additional lender options, especially if your case includes credit complexities or non-standard properties.

How Rental Income Determines Your Mortgage Options

Buy-to-let affordability is assessed using Interest Coverage Ratios (ICRs) instead of personal income alone. Lenders need to see that rental income can comfortably cover the mortgage interest under stressed scenarios.

Typical ICR requirements:

  • 125%–145% for limited company borrowers
  • 140%–170% for individuals
  • Higher-rate taxpayers need stronger rental coverage

If the expected rent does not meet stress tests, lenders may reduce borrowing or require a higher deposit.

First-Time Landlord Eligibility: What Lenders Look At

1. Income and Employment Stability

Most lenders expect applicants to be:

  • In stable employment
  • Earning above a minimum income (commonly £25,000 per year)
  • Able to afford their own residential mortgage or rent obligations

This helps demonstrate financial resilience during rental void periods.

2. Credit Profile

Lenders review:

  • Missed payments
  • Defaults
  • CCJs
  • Credit utilisation
  • Number of credit accounts
  • Recent searches

Specialist lenders can still consider applicants with historic adverse credit, especially if it is older or settled.

3. Bank Statement Conduct

Clean recent conduct is important:

  • No unarranged overdrafts
  • No returned direct debits
  • Consistent income flow
  • Sensible spending patterns

4. Experience vs. Property Simplicity

First-time landlords typically benefit from starting with:

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  • Standard construction houses or flats
  • Single-unit properties
  • Established rental areas

More complex property types may reduce lender choice.

Buy to Let Options Available to First-Time Landlords

1. Standard Buy to Let Mortgage

The most common route. Based on:

  • Deposit
  • Rental coverage
  • Property suitability

Suitable for most first-time landlord scenarios.

2. Limited Company (SPV) Buy to Let

Some first-time landlords choose to buy through a limited company for investment or tax structuring reasons. Advantages may include:

  • More favourable rental stress tests
  • Potential tax differences (seek independent tax advice)
  • Portfolio growth flexibility

However, rates can be slightly higher and fewer lenders operate in this space.

3. Top-Slicing (Using Personal Income)

Some lenders allow you to use part of your personal income to support affordability when rental income falls short. Suitable when:

  • Rent almost meets the required ICR
  • Personal income is strong and stable

This is not available with all lenders.

4. First-Time Buyer, First-Time Landlord Mortgages

Specialist lenders exist for applicants who:

  • Have never owned a property before
  • Want their first property to be a buy-to-let

Criteria are more selective, and personal income must be particularly strong.

5. Let-to-Buy Mortgages

If you currently own your home and want to:

  • Remortgage it to a buy-to-let
  • Release equity
  • Move into another residential property

This structure allows you to become a landlord while purchasing a new home.

6. Holiday Let Mortgages

Some lenders offer mortgages for:

  • Short-term holiday rentals
  • Airbnb-style lets
  • Seasonal properties

Criteria differ significantly from standard buy-to-let mortgages and may require a higher deposit.

Property Types First-Time Landlords Should Approach Carefully

Not all lenders allow first-time landlords to buy more complex property types. These may include:

  • HMOs
  • Multi-unit blocks
  • Flats above restaurants or shops
  • New-build flats
  • Non-standard construction properties

Lender appetite varies, but starting with a simple property often provides a smoother route.

How Credit Issues Impact First-Time Landlord Options

Minor, older adverse credit

Often accepted if deposit size is strong and rental yield is healthy.

Recent adverse issues

May limit lender choice, especially:

  • Defaults within the last 3 years
  • Recent CCJs
  • Multiple missed payments
  • Payday loans

Specialist lenders may still consider these cases, typically with higher deposits.

Strong credit

Opens up:

  • Lower deposit options
  • Better rates
  • Wider lender choice

Smart Choices for First-Time Landlords

1. Choose a property with strong rental demand

High demand improves yield and lowers risk of void periods.

2. Understand all landlord responsibilities

Including:

  • Safety requirements
  • Tenancy rules
  • Repairs and maintenance
  • Local licensing if applicable

3. Research rental yield thoroughly

A strong yield supports better affordability outcomes.

4. Consider long-term plans

Such as:

  • Portfolio expansion
  • Tax structure
  • Exit strategy

5. Maintain strong personal financial habits

Lenders place high value on:

  • Consistent income
  • Stable credit behaviour
  • Clean statements

Summary

There are several buy to let options for first time landlords, each suited to different financial situations and long-term goals. Key factors include:

  • Deposit size (typically 25%)
  • Rental coverage
  • Personal income
  • Property type
  • Credit history
  • Lender criteria

With the right preparation and realistic expectations, first-time landlords can secure buy-to-let mortgages confidently and begin building a rental portfolio.

This article provides general information only. For personalised support, regulated mortgage advice is required.

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Important information: Mortgage Bridge provides information only and acts as a mortgage introducer. We do not provide mortgage advice or make lender recommendations. We can introduce you to an FCA-regulated mortgage adviser who can provide personalised mortgage advice.