Investing in property, with the numbers done properly
Buy to let stopped being a simple game some years ago. Tax changes, tighter lender stress tests, and a wider spread between good and poor yields mean the difference between a rental that quietly builds wealth and one that drains it is increasingly down to getting the structure and the lending right at the outset. That’s the part we’re here for.
The first fork in the road is ownership: personal name or limited company. Since tax relief on mortgage interest was restricted for individual landlords, a lot of higher-rate taxpayers have moved toward holding property through a limited company, where interest remains a deductible business cost. But it isn’t a free lunch — company mortgages can price slightly higher, there are running costs, and extracting profit has its own tax treatment. We don’t give tax advice, and we’ll happily work alongside your accountant. What we do is make sure the lending fits whichever structure you and your accountant settle on.
Scale changes the rules
Once you hold four or more mortgaged buy to lets you’re a portfolio landlord in the eyes of most lenders, and the assessment changes. Rather than looking at the property in front of them, lenders stress-test your whole portfolio — total borrowing, total rental income, overall loan-to-value. A portfolio that’s healthy in aggregate can still trip up a lender with a clumsy process, and a couple of underperforming properties can drag down an otherwise strong application.
This is where lender choice does real work. Some lenders are built for portfolio landlords and take a pragmatic, whole-picture view. Others treat every additional property as friction. Matching the right lender to the shape of your portfolio is most of the job, and it’s knowledge that comes from doing it repeatedly rather than reading a rate table.
HMOs and holiday lets — more yield, more complexity
If you’re chasing yield, the conversation often turns to HMOs and holiday lets. A well-run house in multiple occupation can produce a markedly higher return than a single tenancy, but the lending is specialist: valuations are done differently, licensing matters, and only a subset of lenders play in this space at all. Holiday lets are different again — assessed on projected seasonal income rather than a twelve-month tenancy — and with the Peak District a short drive from Derby, local demand is real. Both are exactly the kind of case we enjoy, precisely because they need a broker who knows the specialist lenders.
Where the yields actually are around Derby
Local knowledge counts for a lot in buy to let, because yield is hyper-local. Broadly, and with the usual caveat that every street differs:
- Long Eaton and Sandiacre — typically among the stronger gross yields locally, with steady tenant demand and entry prices that keep the rent-to-value ratio healthy.
- Mickleover and Littleover — established, popular suburbs where capital values are higher and gross yields correspondingly tighter; often a play for steady, lower-hassle tenants rather than maximum yield.
- Derby city and Normanton — student and young-professional demand can support HMO strategies, where the higher gross return offsets the extra management.
- Belper and Duffield — desirable, lower-yield, capital-growth-leaning areas; period stock that can suit a landlord prioritising quality of tenant and long-term value over headline return.
None of that is investment advice, and the value of property and its rental income can fall as well as rise. But it’s the kind of ground-level read that shapes whether a deal passes a lender’s stress test — and whether it’s worth doing at all. Bring us the property you’re weighing up and we’ll tell you, plainly, whether the financing works.