Landlording, levelled up.

Most UK buy-to-let lenders require a 25% deposit (75% LTV), with the cheapest rates at 40% deposit (60% LTV). A handful of specialist lenders accept 20% deposits at higher rates. First-time landlords face slightly stricter criteria — often a minimum £25,000 income outside rental.

UK lenders use a rental cover ratio (ICR): rent must cover the mortgage payment by 125% for basic-rate taxpayers or 145% for higher-rate, stress-tested at typically 5.5%. On a £150,000 BTL loan, lenders need monthly rent of around £860 (basic rate) or £1,000 (higher rate) to approve.

If you're a higher-rate taxpayer, a Special Purpose Vehicle (SPV) usually beats personal ownership: mortgage interest is fully deductible against rental income, and corporation tax (currently 25%) is often lower than your marginal rate. Mortgage rates are 0.3–0.6% higher than personal BTL, but the tax saving normally outweighs the cost.

A gross rental yield of 5–6% is considered solid, 7%+ is strong, and below 4% rarely covers costs in 2026. Northern cities (Liverpool, Manchester, Sunderland) regularly hit 7–9%, while London averages 3–4%. Net yield (after costs) is typically 1.5–2% lower than gross.

Yes — Houses in Multiple Occupation (5+ unrelated tenants) require a specialist HMO mortgage and usually local authority licensing. Lenders such as Kent Reliance, Paragon and Foundation accept HMOs with up to 6+ rooms. HMO yields commonly reach 8–12%, but management is more hands-on.

Second properties and buy-to-lets in England pay a 5% stamp duty surcharge on top of the standard rates (as of 2026), meaning a £200,000 BTL pays around £11,500 in SDLT. Scotland and Wales apply their own additional dwelling supplements. SPV purchases pay the same surcharge.