For many aspiring landlords, the idea of purchasing a buy-to-let (BTL) property as a first-time buyer is an appealing investment opportunity. But is it possible? While it can be done, first-time buyers face stricter lending criteria, affordability caps, and concerns from lenders about “backdoor residential” mortgages.
Can First-Time Buyers Get a Buy-to-Let Mortgage?
Yes, but it’s more challenging. Many lenders hesitate to offer buy-to-let mortgages to first-time buyers due to concerns over affordability and the risk that the property is not genuinely for investment purposes. However, some lenders do cater to first-time landlords—usually with stricter conditions.
Why Some Lenders Don’t Lend to First-Time Buyers
1️⃣ Backdoor Residential Concerns 🚪
One of the biggest concerns for lenders is the risk of a “backdoor residential mortgage.” This is when someone buys a property as a buy-to-let but actually intends to live in it, effectively bypassing stricter affordability rules for residential mortgages.
Lender safeguards include:
🔹 Requiring a larger deposit (typically 25% or more)
🔹 Stress testing rental income to ensure it meets affordability criteria
🔹 Ensuring rental income covers at least 125-145% of mortgage payments
🔹 Limiting mortgage borrowing to 5 times your income
🔹 Restricting first-time buyers to specific lenders
If a lender suspects a borrower is trying to avoid residential mortgage checks, they will reject the application outright.
2️⃣ No Existing Property Experience 🏡
Lenders prefer landlords who already own property because it proves they can manage mortgage repayments, property maintenance, and tenants. Without this experience, lenders may view first-time landlords as higher risk.
3️⃣ Mortgage Affordability & Income 💰
As a first-time buyer, lenders will scrutinize your income more closely. They typically want:
✅ A stable income (especially for self-employed applicants)
✅ A strong credit history
✅ A larger deposit (25% minimum) to offset risk
Some lenders also require applicants to earn a minimum salary of £25,000-£30,000 per year to prove they can cover costs if the property is vacant.
Pros & Cons of a Buy-to-Let Mortgage as a First-Time Buyer
Pros: Why It Can Be a Smart Investment
✅ Potential for Property Growth – Investing in property can generate long-term capital appreciation.
✅ Rental Income – Monthly rent can help cover mortgage payments and provide passive income.
✅ Tax Benefits – Structuring the mortgage via a limited company can offer potential tax relief (speak to a tax adviser).
✅ Getting on the Property Ladder – Even if you can’t buy a residential home yet, a BTL mortgage can help you enter the property market.
Cons: The Challenges You’ll Face
🚫 Stricter Mortgage Criteria – Fewer lenders available, higher deposits, and tougher stress testing.
🚫 Stamp Duty Surcharge – An additional 3% Stamp Duty applies to buy-to-let properties. Seek professional advice to calculate the exact amount you’ll need to pay.
🚫 No First-Time Buyer Benefits – You won’t qualify for first-time buyer perks like Help to Buy or reduced Stamp Duty rates.
🚫 Limited on the Number of Lenders – With fewer lenders willing to offer buy-to-let mortgages to first-time buyers, you may have fewer options and might not get the best rate available.
How to Improve Your Chances of Getting a Buy-to-Let Mortgage as a First-Time Buyer
💡 1. Build a Strong Credit Profile
Lenders check your credit history before approval. If you have missed payments, defaults, or high debt, it may affect your chances. Check your credit report in advance (e.g., through Check My File) and fix any issues.
💡 2. Show Proof of Income & Affordability
Most lenders require a stable salary of at least £25,000-£30,000 per year. Some specialist lenders are more flexible, but having strong personal financial stability helps.
💡 3. Choose the Right Lender & Broker
Not all lenders accept first-time buyers for BTL mortgages. A mortgage broker (like The Landlords Broker) can match you with lenders who do.
💡 4. Consider a Limited Company Setup
Setting up a limited company for property investment can provide tax benefits. However, this may limit lender options and comes with higher mortgage rates—so consult an adviser.
💡 5. Have a Strong Business Plan
Some lenders will ask for a business plan outlining:
📌 Rental yield & expected income
📌 Exit strategy (how you’ll repay the mortgage or grow your portfolio)
📌 Property management strategy (who will manage tenants and maintenance)
💡 6. Buy Somewhere Away from Where You Live/Work
Some lenders may be more comfortable lending if the property is in a different location from your primary residence, reinforcing that the purchase is truly for investment rather than residential use.
💡 7. Don’t Try to Buy a Property You Couldn’t Afford as a Residential Mortgage
If a lender sees that you are purchasing a property that far exceeds what you could afford on a standard residential mortgage, they may reject the application due to concerns over “backdoor residential” use.
Final Thoughts: Should First-Time Buyers Invest in Buy-to-Let?
A buy-to-let mortgage as a first-time buyer is possible, but it’s not easy. Stricter lending criteria, affordability stress tests, and limited lender options make it a more complex process. However, with the right broker and planning, first-time buyers can successfully enter the property investment market.
📞 Need Help Securing a First-Time Buy-to-Let Mortgage?
At The Landlords Broker, we specialize in helping first-time landlords navigate the mortgage process. Get in touch today for expert advice and tailored solutions!