Buy-To-Let Guide For New Landlords - How To Get Started

Monday 18th December 2023 | 12 minute read

BTL guide what you need to know

So, you’re thinking about becoming a landlord? Whether you have a property ready to rent or you haven’t even started looking for a rental property to buy yet, this buy-to-let guide will run you through all the essentials for new landlords.

Think of it as your go-to buy-to-let guide for everything you need to know before you get your first tenants. We’ll start with the basics and make our way to the more complex but important topics. And we’ll lay out practical tips for you to follow for landlord success.

You need to know everything we talk about in this buy-to-let guide before you become a landlord. So bookmark this page now so you can come back to it as you go along your journey to becoming a new landlord!

In this buy-to-let guide you’ll learn:

  • What is buy-to-let?
  • Buy-to-let mortgages explained
  • How to become a landlord
  • Best places to buy a rental property
  • How much could you earn as a landlord?
  • Practical tips for new landlords
  • EPC awareness
  • Renters reform bill awareness
  • Self-manage vs letting agents
  • Protect your tenant's deposit
  • Maintain your property
  • Get proper landlord insurance
  • Keep accurate records
  • Join an association and get accreditation

What is buy-to-let?

Buy-to-let simply means a property purchased for the purpose of renting it to tenants.

You’ve picked a good time to enter the buy-to-let market in the UK. Rental property demand is at an all-time high as more and more millennials are choosing to rent instead of buying.

The biggest problem for new landlords entering the buy-to-let market has always been finding and keeping tenants. You see, when your property is empty, you’re not making money, but you’ve still got to pay bills and mortgage payments. This has historically made it very difficult for new landlords to stay in the game. Because when they continually miss mortgage repayments, they’re left with no choice but to sell up, or lose their property.

But now, rental voids (periods of time rental properties don’t have tenants) are low. So you’re more likely to succeed in your investment - and make money out of it.

Buy-to-let mortgages explained

If you don’t have the money to buy a second property outright, you’ll need a mortgage to pay for it. When the intention for the property is to rent it out, you’ll need a buy-to-let mortgage.

Buy-to-let mortgage costs are higher than standard mortgage costs. Buy-to-let interest rates and fees are higher than standard residential mortgages. Deposit requirements are also higher. And you’ll need to know your rental income expectations before applying for a buy-to-let mortgage. 

The buy-to-let application process is very like residential mortgage applications. And it takes about the same amount of time to complete.

What if you’re renting to your family?

If you’re renting your buy-to-let property to your immediate family (defined as parents, grandparents, grandchildren, or children), then you may be able to get a standard residential mortgage for the property.

If you’re renting to any other family members outside of the immediate family definition above, you’ll need a buy-to-let mortgage, not a standard residential mortgage.

How to apply for a buy-to-let mortgage

If you’re ready to invest in buy-to-let property, you’ll need to apply for a buy-to-let mortgage. This is a simple 7-step process:

  • Step 1 - Find the best lender for you
  • Step 2 - Get your mortgage agreement in principle
  • Step 3 - Complete the full mortgage application
  • Step 4 - Property Valuation and Survey
  • Step 5 - Get your finalised Mortgage offer 
  • Step 6 - Exchange Contracts
  • Step 7 - Completion

If you’ve applied for a mortgage before you’ll know this is a pretty standard process for applying for most mortgages. So although there are complicated steps, it’s not too difficult to apply for a buy-to-let mortgage.

To apply for a buy-to-let mortgage, you have to hit certain criteria set out by lenders. Every lender has slightly different rules for buy-to-let mortgages. But as a general rule of thumb, here are the criteria and eligibility rules:

Buy-to-let mortgage criteria and eligibility:

  • You must be earning over 25,000pa
  • You must own your own home (either outright or on a standard mortgage)
  • Your expected monthly rental income must be higher than the monthly repayment amount (usually 125%+)
  • You must have a good credit history
  • You can’t be over 70 years old when your buy-to-let mortgage term ends

How to become a landlord

To become a landlord you need to have a property that allows rent. There are some apartment buildings that don't allow rental so watch out for this. 

You’ll also need to register as a landlord. You should check with the local authority where your property is to see where you need to register and the fees involved in registering. If you don't register as a landlord, you could be hit with a fine and ordered to pay back up to 12 months’ rent to your tenants. So this is something you must do.

Once you have a second property and register as a landlord, you just need to follow the practical tips inside this buy-to-let guide to make sure you don't breach any laws.

But before we get into that, let’s have a look at the best places to buy a rental property.

The best places to buy a rental property

Many new landlords will want their first buy-to-let property to be close to where they live. This is a wise choice if you intend to manage the property yourself without the help of a letting agency. 

But if travel isn’t an issue or you intend to use a letting agency to manage your property, you may want to consider different locations that offer the best possible return on your investment.

Since the COVID-19 pandemic, the renters market has changed. More people are working from home more, so the inner-city locations are in lower demand. But more affordable homes just outside the cities and within commuting distance of their work are in higher demand. 

In addition to this, there’s a higher focus on the workspace (office spaces) and open outdoor spaces (gardens). 

The top 5 cities with the highest rental demand in 2023 are

  1. Manchester
  2. London
  3. Bristol
  4. Cambridge
  5. Peterborough

How much could you earn as a landlord?

The amount you can earn as a landlord will vary on the size of the property, the type of property and its location.

The 2021 English Private Landlord Survey showed that the median rental income for 12 months was 17,200. This is before tax and other costs.

Turning a profit as a landlord starts with understanding how much you should charge your tenants per month. Buy-to-let mortgage lenders usually request that your rental income is at least 125% of the monthly mortgage repayments. So this gives you an idea of how much you should be charging.

But you’ll also want to factor in other costs such as maintenance and repairs to ensure you plan effectively to become profitable. 

To calculate how much you should profit on your rental property you should use Rental yield.

What is rental yield?

Rental yield is like a Return On Investment (ROI) calculation that gives landlords an indication of how much money they should make from their rental property.

You calculate the gross Rental Yield by taking the amount of rent earned in a year and dividing it by the amount you paid for the property. You then divide this number by 100 to get the rental yield percentage.

Here’s a typical example:

£17,200 ÷ £294,000 = 0.0581

0.0581 x 100 = 5.81%

In this example, the rental yield is 5.81%.

The gross rental yield only shows the gross yield the property could achieve. So it’s used by mortgage lenders.

But landlords should use a more accurate representation of their potential income, the net rental income. This is the gross rental income minus costs and expenses. Costs can include insurance, maintenance, letting fees, etc.

A net rental yield between 5% and 8% is considered to be good. The higher the percentage the stronger the profitability.

You can use this calculation to see if a property investment is likely to be profitable based on your expected rental income. It’s a great first step to understanding if a buy-to-let property purchase is a good investment.

Practical tips for new landlords

To help you find the most success in becoming a new landlord and managing your BTL investment there are some things you absolutely have to know. It’s important to note that non-compliance to laws and legalities as a landlord can lead to hefty fines. And you want to do everything you can to avoid that. 

It’s essential you know the laws and understand your responsibilities before you decide to become a landlord. So, here they are…

EPC awareness! (New rules)

EPC stands for Energy Performance Certificate. You’ve likely seen the colour scale EPC certificates on electronics like fridges and washing machines when you buy them.

The certificate shows how energy efficient the product is. Energy Performance Certificates are also used for rental properties.

It is a legal requirement for you to provide an EPC to tenants before renting out your property. To get an EPC you’ll need to find an accredited assessor to check out your property and supply the certificate.

Currently, the requirements set by the government are for rental properties to be rated “E” or above.

There has recently been a new law passed which says that by the end of 2028, all privately rented properties will need to be rated “C” or above.

This is important to note when looking for a property to purchase. If you buy a property that is EPC  rated lower than “C” you’ll need to consider the costs and work required to bring that rating up to a “C” or above if you intend to rent it after 2028.

Renters reform bill awareness (New law/bill being passed)

The Renters reform bill is currently being passed in government. This means no new laws have been passed at this time. And no date for law changes has been set either.

But it is still important to understand the potential impacts the new Renters reform bill will have on the private rental sector.

The Renters reform bill proposes the following changes to laws for private landlords and their tenants:

Abolish section 21 ‘no fault’ evictions

This would remove the “no-fault” evictions section 21 from the law. What does this mean? It means that all assured tenancies will become periodic. This is so that tenants have more living security. It will also empower tenants to challenge poor practices from their landlords and unfair increases to their rent as they cannot be evicted outside their tenancies period.

More comprehensive possession grounds for landlords

To make it fairer for landlords to repossess their property where tenants are at fault. This could include repeated anti-social behaviour or rent arrears.

Stronger protections against backdoor eviction

This will allow tenants to appeal excessively above-market rents which are purely designed to force them out of their property. Landlords will still be able to increase rental prices to market price. In the event of a disagreement, an independent tribunal will make the judgement.

Private Rented Sector Ombudsman

This will offer private landlords fair, impartial, and binding resolutions to many issues they have which will be quicker than using the court system.

Privately Rented Property Portal

A portal that helps landlords understand their legal obligations and demonstrate compliance. It’ll also be a place for tenants to find information to make more informed decisions on tenancy agreements.

Give tenants the right to request a pet in the property

The number of homebuyers may have gone down, but the number of pet owners has remained the same. The government intends to make it fairer for pet owners to find rental property from private landlords with this change. The law will stipulate that landlords must consider and cannot unreasonably refuse pets in their property. And landlords will be able to require pet insurance to cover damages caused to their property.

Decide whether to self-manage or use a letting agent

There are 2 main options for you to consider when deciding how you’d like your rental property managed:

  1. Fully self-managed
  2. Fully managed BTL services

What you choose is completely up to you. And how confident you feel about taking on the property management yourself will play a large part in your decision.

The majority of new landlords choose to sit back and let the letting agent fully manage their property. But this isn’t the best option for everyone. Here are some compelling reasons you should use fully managed BTL services from a letting agent


If you live far away from the property you’re renting out, it makes sense to use a fully managed service as they will be able to manage your property better than you can (and help you avoid long trips just to find a dripping tap)!


Some new landlords want absolutely no contact with their tenants. They don't want the hassle of responding to messages or being available by phone 24/7. If you find good tenants, this shouldn’t be an issue. But it’s understandable if you’d prefer to avoid communication with them completely. A fully managed BTL service would deal with all this for you.

No hassle solution

Some landlords want nothing to do with the running of their property. They don't want to find tenants, they don't want to respond to messages, and they don’t want to spend their weekends finding repairmen or doing inspections. They just want someone else to handle that for them. In this case, fully managed by the letting agent is the option for you.

The downside to using a letting agent is that you will have less control over the tenants inside your property. You’ll also give the letting agents permission to select their own repairmen and maintenance workers. So you might not have full control over the costs of repairs etc. In addition to this, you’ll also have to pay a monthly fee for the management so your profits go down.

Protect your tenant’s deposit

Another responsibility landlords have is to protect their tenant’s deposit. This is a legal requirement under the deposit protection scheme. You must put your tenant’s deposit in a government-approved tenancy deposit scheme (TDP).

There are different schemes you can use for this, but you’ll need to choose one and set up your free account to make sure you can put the deposit in the scheme to protect it for your tenant. There is a small deposit protection fee you will have to pay when paying the deposit into the protection scheme.

Maintain your property

It's a good idea to rent your property out in great condition. But new landlords often make the mistake of waiting for something to go wrong until they maintain their property. This can often end up being more expensive for you. 

Instead, you should plan maintenance and repairs to keep the property in great condition. Maintaining your property will cost you less in the long run and reduce the risk of being hit with a very expensive repair bill down the line.

We recommend you maintain your property regularly. Here’s what you should plan to maintain:

  • Mould and mildew - It's a common issue in the UK. And if left unchecked could lead to more expensive structural repairs later. Check bathrooms, kitchens and any other damp areas of your property at least once a year.
  • Plumbing - Floods are one of the most expensive repairs for landlords. So you should inspect the plumbing at least once a year to make sure it’s all in good working order.
  • Check gutters - Blocked gutters could cause leaking. And what’s worse is that the leaking may go unnoticed by the tenants for months if it’s leaking inside walls and the structure. So if not maintained correctly could lead to very expensive repairs and time without tenants.
  • Landscaping - You should maintain the gardens at your property to avoid growth on walls which can lead to dampness and mould growth inside the property and the structure. Overgrown gardens can also attract pests which can then gain access to the property. Pest removal can be expensive too.

Get proper landlord insurance

If you've applied for or got a buy-to-let mortgage, your lender probably stipulated that you have buildings insurance in place at all times. Building insurance will protect you from unexpected damage to your property.

But we recommend you go a step further. Buildings insurance provides you with the basics. But landlords insurance can cover you for more than just the buildings. Landlords insurance will also cover:

  • Buildings and contents cover
  • Property owner’s liability cover
  • Protection against loss of rent due to property damage

Proper landlord insurance can cover you against eventualities standard home insurance won’t. Search landlord insurance online to find a policy that suits your requirements and falls into your budget.

Keep accurate records

Being a landlord is a business. And this comes with its tax rules. So it’s important you keep accurate records of everything related to your rental property. Here’s what landlords should keep records for.

Bank statements

If you have online banking, your statements will be kept securely in your account. But if you don't use online banking, you should keep a record of all bank statements for the rental property.


Made a repair? Keep the invoices. Replaced a washing machine? Keep the receipt. We recommend you make digital copies of all your expenses so you have them to hand when you need them for tax purposes. Here’s a handy list of expenses you should keep records of:

  • Repairs
  • Maintenance
  • Cleaning costs
  • Gardening costs
  • Letting fees
  • Legal fees
  • Management fees
  • Accounting fees
  • Insurance
  • Utility bills
  • Council tax
  • Inspections
  • Certifications

Join an association and get accreditation

A landlords association offers you support to help you save time, money and stress. They bring everything you need to know about being a landlord into one place. So you can find what you need when you need it without searching the internet or calling on expensive legal support.

Different landlord associations offer different benefits. But in general, they tend to offer:

  • Discounts on BTL products and services
  • Discounts on trade (such as B&Q and Carpets)
  • Quarterly magazines with news and updates
  • Free advice
  • Free training on legislation and landlord practices
  • Free documents (like forms and tenant agreement templates)
  • Free guides

Should you join an association?

As a new landlord, we recommend you join an association so that you have the support you’ll likely need. And it isn't expensive with most memberships being less than £100 for 12 months.

Ready to become a new landlord?

Let’s get you on the right path to a buy-to-let mortgage so you can buy your first buy-to-let property.

Speak to one of our buy-to-let mortgage experts today. Give us a call on 01202 612934

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