To consider buying to let?

[Stormbabet]

A bit of background, I run a small business that has allowed me to build up some savings. DH and I don't want to move house and are happy where we are currently so it's not needed for our own housing.

I'm considering using my savings as a deposit on a buy to let property. I would only really want the tenants to cover the mortgage, I wouldn't be looking to make a rental income. In fact I would be willing to pay a small amount each month myself if necessary.

Has anyone done similar? Do you manage it yourself or use a letting agent?

Any advice is welcome.

Make sure you are aware of the tax rules as you can’t offset all of the mortgage against the income, so it may cost you more than you think

The laws around Buy to Lets have changed over the years, OP.

There's an additional amount of stamp duty on the initial purchase price (assuming you have a mortgaged property you live in already). Ours made our stamp duty 8% instead of 5%.

You can now only offset a very small amount of mortgage interest, and you get taxed at your main rate on the rental income. You can offset direct costs such as repairs, maintenance etc but that's out of pocket expenses anyway.

also, one of our BTLs is in a borough where they now also charge us £500 for a property licence (recent thing), plus of course an annual electricity and energy check.

And you also pay Capital Gains Tax as and when you sell.

From my perspective, intentional buy to lets are no longer a good investment anymore (which is probably the point).

BTLs only really made sense in the era of capital appreciation (of the house).

Like with developing, you didn't need to make money from the rental, you could make it just by the house standing there and going up in price.

That has now ended. That coupled with the fact that the market is not currently pricing in high interest rates and the continuing increase in regulation on rental properties means it is an investment I would not consider.

Housing is predominantly let by councils, housing associations and individual BTL landlords. Does nobody ever wonder why large private companies have never got involved with letting residential property?