Lenders opening up to buy-to-let mortgages for first-time buyers


Buy-to-let mortgages for first-time buyers are not strictly new, but the majority are only available to those jointly purchasing with an existing homeowner.

According to research from Moneyfacts, there are currently 23 lenders offering first-time buyer buy-to-let mortgages.

Many lenders view lending to first-time buyers on a buy-to-let basis as high risk and make it particularly difficult for them to become landlords. Most lenders will require them to have owned a residential property for at least six months before they will consider offering a buy-to-let mortgage.

However, the status quo is shifting as more lenders launch buy-to-let mortgages to pure first-time buyers. Natwest, Barclays, Clydesdale and a number of smaller building societies are all offering buy-to-let mortgages to younger buyers who do not already own a property.

A Barclays spokesperson said: “We’re always looking at ways to innovate and open up access to home buying. First-time buy-to-let will give someone who does not have a mortgage an opportunity to get onto the property ladder.”

Helping first-time buyers get on the property ladder

For those that might struggle to buy a home of their own, this could be a significant opportunity to get on the property ladder. Young people living in more expensive regions are often priced out of their local property market, but they could buy in a cheaper area of the country.

Weighing up the options is essential; becoming a landlord may mean losing any rights to the benefits afforded to first-time buyers – such as the latest stamp duty changes – and may require a hefty deposit, with most lenders demanding a 25% down payment. But with low rates on five-year fixes, Barclays is currently offering 2.17% and Natwest 2.18% (Moneyfacts), and often being able to borrow more against the rental income, these negatives can be somewhat offset.

With lenders making first-time buy-to-let more accessible, there is a real opportunity for some debut buyers to access the property market and make a long-term investment in their future.

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Lenders opening up to buy-to-let mortgages for first-time buyers


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