Buy to let hits the headlines

Buy-to-let property investment has hit the headlines of property blogs quite a lot over the last few days - and the stories have been about more than the likes of new mortgage rates.

In fact, writers have urged potential landlords to exercise caution when it comes to choosing the correct mortgage product for an investment and to find a trustworthy financial adviser. At this time, landlords-to-be are falling prey to deals that quite simply sound too good to be true, offering them an investment without having to pay a deposit. What happens then quite often involves applying for a mortgage stating a higher property value than what is actually being paid.

If the deal goes ahead, the landlord effectively defrauds their mortgage provider. If you as the landlord are then audited at a later date, you may well be in for bigger problems?

So how do you prevent falling victim to this and similar scams? First of all, you cannot invest in property without having money to put down a deposit. There are no 100% buy-to-let mortgages available; in fact, lenders tend to look for higher deposits for a buy-to-let property. Second, insist on transparency throughout the purchase process. Use a reputable solicitor and financial adviser and ask for recommendations if you're unsure.

Perhaps the most important thing to consider before investing is that you do actually have the funds available to buy the property using a sensible method of finance. Repossessions among buy-to-let landlords have remained steady at around one in five repossessions for a few years and this year's figures suggest the same.

However, with numbers of first-time landlords continuing to rise and more people considering long-term renting a viable alternative to getting a foot on the property ladder, it will be interesting to see how these figures change in the future.