Blue banner with text "What to do when you haven’t found a property to invest in" in front of photo of a checklist on a desk

Categories: guides | buy to let mortgage guides

This guide will tell you what you need to know to go and find a property to invest in, which is the first step to take before arranging the finance to buy it.

Once you have found a property and you want to get a mortgage application started, get back in touch with us and we will allocate a mortgage advisor to your case, to get things under way! Good luck!

Frequently asked questions

How much can I afford to spend based on the savings I have?

You want to invest in property, but how do you know what you can afford to buy? Well, when it comes to borrowing money to buy property, you can calculate the property value you can afford by understanding how much deposit you will need, see “How much money do I need for a deposit” below.

What types of property can you help with?

We can help with almost every type of buy to let, holiday let or commercial property, even the most quirky of properties.

How much money do I need for a deposit?

Deposit amounts vary depending on the type of property you are buying.

Buying a home for a tenant to live in

If you are buying a home you will let to a tenant you will need a deposit that is at least 15% of the property value, but 25% may allow you to access more competitive mortgage rates.

So, if the property you are buying is worth £200,000 a 15% deposit is £30,000. The cheaper the property, the less the deposit will be (for example if you were buying a property worth £150,000 a 15% deposit will be £22,500).

Buying a holiday let or AirBnB property

If you are buying a property you will rent out as a holiday let or an AirBnB style short-term let you will need a deposit that is at least 20% of the property value. So, if the property you are buying is worth £200,000, you would need at least £40,000 as a deposit.

Buying a semi-commercial or commercial property

If you are buying a semi-commercial (the property is partly for a business to operate from and partly where a tenant would live, e.g. a shop with a flat above) or a fully commercial property (where the building is only for business use, no-one will live there) then you will need a deposit of at least 25% of the property value and possibly up to 40% of the property value.

So, if the property you are buying is worth £200,000, you would need at least £50,000 and perhaps as much as £80,000 as a deposit.

I don’t have a cash deposit, what are my options?

If you own other property either outright or with a mortgage (e.g. your home, a holiday home or another rental property) and don't have cash for a deposit, you may be able to take out borrowing against that property to raise a deposit.

If your property is mortgaged you would need to have enough equity to borrow against.

If your property has no mortgage, normal mortgage borrowing rules would apply to calculate the amount you could raise e.g. if it were a home used as a rental property, you could borrow up to 85% of the value of the property.

If it were your home, you would need to speak to a residential mortgage broker (we do not handle mortgages for a home you will live in, which requires what is called a residential mortgage), and when you have the funds we can arrange the mortgage on a investment property you want to buy.

Important deposit information

The source of the money you want to use as a deposit must be traceable and ideally from savings, but we can also help where:

  • A member of your family is giving you money as a deposit or you are buying a property from them and they are gifting you equity in the property so you don't have to raise a deposit.
  • The deposit is from an inter-company loan.

Should I buy via a limited company, or in personal name?

The decision on whether to invest in personal name or via a limited company is largely driven by whether the tax situation is more or less advantageous to you. To be sure what the right answer is, you should speak to a professional tax advisor. Mortgage brokers are not qualified to give tax advice.

You can read our guide, "A limited company or personal buy to let - the right choice" to help with any discussions you have with a tax advisor.

We can help you with mortgages taken out in personal name or mortgages taken out via a limited company.

I need advice on Stamp Duty or other tax issues

This is not something that we can advise on, please talk to a professional tax advisor or accountant.

I just want an idea of rates

If you just want an idea of rates based on a certain property value and loan amount, you can take a look at our mortgage calculators:

What happens when I use you as my broker?

Our service is delivered by talking to you on the phone. In summary it goes like this:

  1. Factfind: We ask you about the property you are investing in, your circumstances (including finances) and plans for your investment, this takes 30-45 minutes
  2. Sourcing: We investigate products to fine the one that best fits your needs and circumstances, and call you to describe the product we have found, this can be within 2 hours of our call with you, the same day, or usually no longer than the next working day.
  3. Application: When you give the go ahead we submit your application to the lender immediately.
  4. Lender underwriting and valuation: The lender underwrites your case, on a buy to let mortgage this can be as quick as 1-2 weeks, but more typically is 3-4 weeks. On a commercial property this takes a little longer, typically 6 weeks.
  5. Conveyancing: The legal work is done. Purchases take longer than remortgages, because more checks are done. On a buy to let or commercial purchase this can take on average 3 months, and on a remortgage it will take 4 weeks on average.
  6. Completion: The funds are paid out and your mortgage/loan is completed.

All timeframes are reliant on all parties working quickly and effectively with us, so if you want to get a deal through very quickly, ahead of the timeframes above, talk this through with us and be ready to provide all details and documentation to us as quickly as possible. You choice of solicitor will also be critical, more on this below.

Good luck with your property search, we look forward to hearing from you soon!