How to Buy to Let in Manchester: A Guide for Aspiring Landlords

Oct 25, 2023

Are you looking to invest in Manchester? Manchester, a vibrant city rich in culture and history, presents a fantastic opportunity for aspiring landlords to enter the buy-to-let market. This comprehensive guide will provide you with essential information on buy-to-let mortgages, finding the right property, understanding legal responsibilities and costs, exploring financing options, and keeping an eye on the ever-changing Manchester property market trends. Strap in and get ready to embark on a rewarding journey towards becoming a successful buy-to-let investor in Manchester!

Key Takeaways

  • Unlock the potential of buy-to-let mortgages and start your journey as a successful landlord.
  • Explore Manchester’s property market trends for house price growth, rental demand & more!
  • Discover financing options & government schemes to maximise returns on your investment.

Understanding Buy-to-Let Mortgages

An image showing a property with a buy to let mortgage sign in front of it, illustrating the concept of buy-to-let mortgages.

A buy-to-let mortgage is your key to unlocking the potential of rental property investments. While similar to residential mortgages, buy-to-let mortgages have noteworthy distinctions, such as differences in interest rates. To ensure a reliable return on investment, many lenders expect your rental income to be 25% to 45% higher than your mortgage payment.

Basing the amount you borrow on the expected rental income from the property is a sound strategy, particularly to avoid the need to sell the property to repay the mortgage payments. This is especially true if you have an interest-only mortgage.

Types of Buy-to-Let Mortgages

There’s a diverse array of exciting buy-to-let mortgages to explore, including fixed-rate mortgages, variable-rate mortgages, and tracker mortgages. A fixed-rate mortgage keeps your interest rate steady throughout the loan, providing you with predictability in your payments, even during bank holidays.

On the other hand, there are different types of mortgages to consider:

  1. Fixed-rate mortgages have a set interest rate for a specific period of time, providing stability and predictability.
  2. Variable-rate mortgages have fluctuating interest rates that could potentially save you money if the rates decrease.
  3. Tracker mortgages link the interest rate to a specific index, such as the Bank of England base rate, offering you the possibility of great savings.

Mortgage Lenders and Eligibility

Buy-to-let mortgages serve as an excellent way for landlords to secure funding for their rental property investments. Keep in mind, eligibility criteria for buy-to-let mortgages can vary significantly among lenders and may include specific conditions.

To estimate your monthly mortgage repayments and make an informed decision, consider using a mortgage calculator, such as the one available on the Belle Vue Place website.

Finding the Right Property in Manchester

A couple looking for the right property in Manchester

The search for the perfect buy-to-let property in Manchester can be both exciting and challenging. The city offers a wide range of new homes, from stylish city centre apartments to charming 4-bed new builds in Hyde, on the edge of the picturesque Peak District.

Top locations to invest in Manchester include Didsbury, Salford, Longsight, and the Greater Manchester suburbs, each with their unique advantages and disadvantages.

City Centre vs Suburbs

Investing in Manchester’s city centre promises a strong and growing economy, higher resale value, booming housing market, and high demand for rental properties. However, fierce competition from other buy to let investors and first-time buyers, limited availability of homes, and higher property prices may pose challenges.

On the contrary, suburban properties offer lower prices, more availability, and less competition, but they might come with trade-offs like lower potential for resale value, a slower housing market, and lower demand for rental properties.

New Builds vs Older Properties

When it comes to choosing between new builds and older properties, both offer unique opportunities and challenges. New builds provide energy efficiency, updated fixtures, fittings, and a 10-year warranty for peace of mind. However, they may have a higher price tag and take time to appreciate in value.

Older properties, while more affordable, could require more maintenance and repairs and lack modern amenities. Ultimately, the choice depends on your investment goals and personal preferences.

Legal Responsibilities and Costs

Estate agent giving house keys to client after signing agreement contract real estate with approved mortgage application form, concerning mortgage loan offer for and house insurance.

Navigating the legal responsibilities and costs associated with buy-to-let properties can be complex. Here are some key considerations:

  • Familiarity with the taxes and fees involved
  • Understanding the mortgage interest tax relief available for landlords
  • Knowing the legal responsibilities of buying property in Manchester

Having this knowledge is indispensable for anyone looking to invest in buy-to-let properties.

As a landlord, you’ll need to pay tax on your rental income if it exceeds your personal allowance, but you can offset allowable expenses such as letting agent fees, property maintenance, and Council Tax to maximize your return.

Stamp Duty Land Tax

Stamp Duty Land Tax (SDLT) is a crucial tax to consider when buying property in the UK. Buy-to-let investors are subject to the same SDLT rules, which means you’ll pay the applicable rate on any property you purchase. However, first-time buyers may be exempt from SDLT on properties costing up to £250,000 (or £425,000 for a main property).

Knowing the SDLT thresholds can help you strategise and save money on your buy-to-let investment.

Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit you make from selling or disposing of an asset that has increased in value. For buy-to-let properties, CGT is charged at 18% for basic rate taxpayers and 28% for higher or additional rate taxpayers. It’s important to note that this is separate from income tax, which is applied to your regular earnings.

Strategically offsetting costs like Stamp Duty, solicitor and estate agent fees can reduce your Capital Gains Tax bill. Any losses made from a sale of a buy-to-let property in the previous tax year can also be maximized to benefit your savings.

Estate Agent Fees and Services

Estate agent fees and services significantly impact buy-to-let investments. Fees generally range from 0.75% to 3.0%+VAT of the property price, with some agents providing a fixed fee option. Discussing these fees with the estate agent during property valuation will clarify the costs involved.

Financing Options and Schemes

A couple discussing their financing options and schemes for buy-to-let property

Various financing options and schemes that can facilitate the purchase of your buy-to-let property in Manchester include:

  • Shared Ownership
  • Help to Buy
  • Commercial mortgages
  • Investment property financing
  • Bridging loans
  • Development finance

Government schemes like Help to Buy, Shared Ownership, and Right to Buy can also provide valuable assistance in your property investment journey.

Low Deposit Mortgages

Low deposit mortgage options, such as:

  • Help to Buy schemes
  • 100% mortgages offered by Skipton Building Society
  • NewBuy scheme
  • Deposit Unlock

can be incredibly beneficial for buy-to-let investors. These options allow you to purchase a property with a minimal initial investment, making it easier to enter the property market.

Government Schemes

Government schemes that can significantly help buy-to-let investors achieve their property investment goals include:

  • Shared Ownership: allows you to purchase a portion of a property and pay rent on the rest, making homeownership more accessible.
  • Help to Buy: enables property purchases with just a 5% deposit.
  • Save to Buy: provides assistance in saving for a deposit.

Manchester Property Market Trends

buying a property is cheaper than renting in Manchester

Source: Zoopla

The thriving Manchester property market presents opportunities for buy-to-let investors in both the city centre and surrounding areas. Staying updated on market trends like house price growth and rental demand is key to making informed investment decisions.

House Price Growth

House price growth in Manchester is promising, with apartment prices rising by 5.4% in the last 12 months. Savills predicts an impressive 18.8% growth in average property prices in the North West region, including Manchester, by 2026.

Monitoring house price growth can help you determine the best time to invest in buy-to-let properties, taking advantage of rising house prices and potential appreciation.

Rental Demand

Rental demand in Manchester is surging, with rental prices increasing by 20% in the city centre over the last year and a record low supply of rental properties. Manchester boasts the highest rental growth outside of London at 13% year-on-year.

High rental demand and promising rental yields, ranging from 6-7% on average, make Manchester an attractive location for buy-to-let investments.


In conclusion, Manchester offers a wealth of opportunities for aspiring landlords to enter the buy-to-let market. By understanding the intricacies of buy-to-let mortgages, finding the right property, navigating legal responsibilities and costs, exploring financing options, and keeping a keen eye on Manchester’s property market trends, you can embark on a rewarding journey towards building a successful buy-to-let investment portfolio in this vibrant city.

Frequently Asked Questions

How much do you need to start buy to let?

To start investing in buy-to-let, you need to have at least 25% of the property’s purchase price as a deposit, although this can vary between lenders with some requiring up to 40%. Start your journey into investing today!

Is buy to let a good way to make money?

With the right strategic approach and good mortgage and loan rates, buy to let can be a great way to make money. Long-term capital appreciation and steady rental income offer potentially lucrative returns.

How do you qualify for a buy to let?

To qualify for a buy to let, you’ll need a deposit of at least 25%, and rental income should be 125-145% of the monthly mortgage. Your loan to value ratio (LTV) must also be at least 75%. All other circumstances, including existing rental properties and any other debts, will be taken into account.

What types of buy-to-let mortgages are available?

Buy-to-let mortgages come in various forms, such as fixed-rate, variable-rate, and tracker mortgages, so you can find the best option for your needs.

Manchester Property Investment


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