Landlords urged to be 'wary' of buy-to-let

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Landlords urged to be 'wary' of buy-to-let

Buy-to-let landlords may be heading into the market before they properly know what they are letting themselves in for, according to Firstrung, a company that specialises in providing advice for first-time buyers.

A key factor impacting on this is the raft of legislation that potential buy-to-let landlords must contend with such as Houses in Multiple Occupation (HMOs), Empty Dwelling Management Orders (EDMOs) and the Disability Discrimination Act.

Paul Holmes, chief executive of Firstrung, explained that although the demand for low interest buy-to-let mortgages had increased, landlords must be wary as they differ from residential mortgages.

Mr Holmes said: "A lot of potential buy-to-let landlords make the mistake of looking at the headline rate and think that if they can get five per cent return on their rent then that's fine. But they won't be borrowing at five per cent, they'll be looking to borrow at perhaps seven per cent."

According to product comparison website eMoneyFacts, the amount of buy-to-let products on the market currently numbers more than 2,000.

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