Buy to Let – Back in the Day

There was a time, some 10 years or so ago that I was considering becoming a buy-to-let landlord. I had amassed sufficient money to have some surplus cash and also my cash flow was good.

buy to let cartoon housesThe difficulty was house prices in the whole of the UK had become rather inflated and it seemed that anyone who was in a similar position to me was buying a second house with a view to becoming a buy to let landlord.

For those of you old enough to remember, UK house prices exploded from around 2003 – 2007. The property boom had started a couple of years earlier in London, but 2003 saw it spread to Manchester and the North West of England. As an example, I bought a house in Stubbins, Ramsbottom (just outside Bury) in 2002 and sold it 2 years later for £45000 more than I paid for it. Very nice, although I still needed somewhere to live and so bought a house that was going up in value daily. I had considered keeping the old house as a buy to let but finally it became the sensible option to sell it so I could use the money to buy my new house.

I don’t remember what the interest rate was for my new house but I do know that buying a second home whether it’s for buy to let purposes or just as a second (e.g. holiday) home attracts more tax and a higher rate of interest from mortgage lenders.

If you’ve got sufficient capital to service setting yourself up as a buy to let landlord, there are some attractive features about it, especially if you are in Manchester or the north west. It’s a very eclectic mix of people and there are so many different types of property and buy to let markets you can get into. Ramsbottom is seen as an up and coming area, as are the Manchester areas of Didsbury and Wythenshawe. With some very attractive buy to let mortgage rates currently on offer, becoming a landlord is something to consider for the right type of person.