Investing In Buy To Let Property: A Guide For First Time Landlords In London

Posted on November 15th, 2023.

Are you thinking of investing in buy to let property in London ? Well, you’ve come to the right place. Becoming a landlord can be a rewarding venture, and in this guide, we’ll walk you through the ins and outs of what could be an exciting journey for you.

1 – Buy-to-Let Basics for Aspiring London Landlords

Let’s kick things off by covering the fundamentals:

What is Buy-to-Let?

Investing in buy to let is where you purchase a property to rent it out to tenants.

Location Matters

Location is key so research and choose an area with potential for rental demand. Consider factors like proximity to schools, public transport, and employment opportunities. Think about what you’d want as a tenant, and that’s likely what others are looking for too.


Calculate your budget carefully, considering not only the purchase price but also ongoing costs like maintenance and tax. Remember, investing in buy to let is a long game. You want to be prepared for the journey ahead. Create a budget that allows for unforeseen expenses.

Purchase Price

Start by setting a budget for the property purchase. Consider whether you’ll buy a property outright or opt for a buy-to-let mortgage.

Additional Costs

Don’t forget to factor in additional costs such as legal fees, stamp duty, and property surveys. These can add up, so it’s crucial to plan for them from the beginning.

2 – Why Location Matters for London Rental Properties

Now that you’re up to speed on the basics, let’s move on to property selection.

Property Types

Consider the type of property you want to invest in, such as apartments, houses, or student accommodation. Different types have different pros and cons.

Apartments can be a great entry point for new landlords. They often require less maintenance, and you can start with a smaller investment.

Houses offer more space and potential for higher rental income. However, they may require more maintenance.

In a university town, student accommodation can be lucrative. There is often consistent demand, especially in areas with large universities.

Research and Due Diligence

Don’t rush; do thorough research on the local property market and understand the demand for rental properties in London . Additionally, look at historical rental data, vacancy rates, and property price trends. Attend local property auctions and check online listings to get a feel for the market.

Local Market Analysis

It’s important to understand the demand for rental properties, average rental prices, and the competitiveness in the area.

Property Viewings

Before making a buy-to-let purchase, thoroughly assess the condition of the property. Look for potential issues that might require costly repairs in the future.

Consider Future Growth

Look for areas with potential for future growth and development. Such areas often see property values increase over time.

3 – Financing Your Investment

Money matters! Here’s how to make it work.


Explore buy-to-let mortgages, designed specifically for landlords. These often require a larger deposit and have higher interest rates compared to regular mortgages. Compare rates and terms to find the best deal. Always consult with a mortgage broker for expert advice.

Interest Rates

Pay attention to interest rates, as they can significantly impact your monthly mortgage payments. Fixed-rate mortgages provide stability, while variable rates may offer lower initial costs.


Plan for a solid deposit, typically around 25% of the property’s value. A larger deposit can lower your mortgage repayments and improve your overall return on investment.

LTV Ratio

The Loan-to-Value (LTV) ratio is the percentage of the property’s value covered by your mortgage. Lower LTV ratios can result in better mortgage deals.

Contingency Fund

Always have a financial cushion for unexpected expenses or void periods without tenants. You never know when a boiler might need repairs or when your property might be temporarily vacant. Having a contingency fund provides peace of mind and financial stability.

Emergency Fund

Your contingency fund should cover not only property-related expenses but also personal emergencies. It’s wise to have at least three to six months’ worth of mortgage payments saved.

4 – Tenant Selection and Management

Now, let’s talk about the heart of the matter – your tenants.

Tenant Screening

Conduct thorough background checks and interviews to ensure responsible tenants. Request references from previous landlords and employers. Additionally, look for a track record of paying rent on time and treating properties with care.

Credit Checks

Run credit checks to assess the financial stability of potential tenants. A good credit history indicates a responsible tenant.

Interview Process

Interview prospective tenants to get to know them better. Ask about their rental history, employment, and reasons for moving.

Legal Responsibilities

Familiarise yourself with landlord responsibilities, including safety checks, deposits, and maintenance. The UK has strict regulations in place to protect both landlords and tenants. Make sure you’re compliant to avoid legal issues down the line.

Deposit Protection

Safeguard tenant deposits in a government-approved deposit protection scheme. This ensures fairness and transparency in deposit return procedures.

Repairs and Maintenance

Be prompt in addressing repair requests and conducting routine maintenance to keep the property in good condition.

Gas Safety Checks

Ensure that gas appliances are safe and have annual safety checks performed by a Gas Safe registered engineer.

Electrical Safety Checks

Every rented property should have its electrical installations inspected and tested by a qualified electrician. This is to obtain an Electrical Installation Condition Report (EICR). It’s crucial to provide tenants with a copy of this report.

Property Management in London

Decide whether you’ll handle property management yourself or hire a letting agency. Managing tenants and properties can be time-consuming, so consider your available time and expertise. Letting agencies like Ashmore Residential can handle everything from finding tenants to maintenance.

Letting Agencies in London

Letting agencies can save you time and handle many landlord responsibilities when you are investing in buy to let properties. Importantly, as professionals, they have experience in tenant sourcing, referencing, and lease management.

DIY Management

If you choose to manage the property yourself, be prepared for tenant enquiries, maintenance co-ordination, and rent collection. Good organisation and communication skills are essential.

Building a Community of Landlords

Investing in buy-to-let properties can sometimes feel like a solo journey, but you’re not alone. Consider joining local landlord associations or online communities where you can:

  • Share experiences and advice with fellow landlords. Learn from their successes and mistakes.
  • Stay updated on changes in UK landlord laws and regulations. Laws can change, and it’s essential to stay informed to protect your investment.
  • Network and even find potential investment opportunities through connections. You never know when you’ll come across an excellent investment opportunity through your network.

Becoming a landlord in London is an exciting and potentially lucrative endeavour. By following these key steps and being part of a supportive community of landlords, you’re well on your way to success.

Remember, every landlord started somewhere, and it’s okay to seek guidance along the way.

If you’re a first time landlord investing in buy to let, we can help. Ashmore Residential are your local property management and letting experts in London . Contact us on 020 8366 9777 or email us at for a no obligation chat about our property management services.