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National Conveyancing Week: How to Buy an Investment Property

How to Buy an Investment Property

In celebration of National Conveyancing Week, Irwin Mitchell have written a series of articles aimed at supporting residential property buyers and sellers to understand some of the complexities of specific transactions. 

Buying an investment property can be a smart financial move. It is important to consider factors like market trends, property condition, type of mortgages available, insurance, tax, statutory requirements, and the responsibilities of a landlord before making the decision. 

It is advisable to instruct a reputable firm of lawyers who have experience dealing with the conveyancing transaction including the preparation of the tenancy documents on your behalf and will clearly explain your legal obligations before renting your property. 

Before making an offer on an investment property, it is worth considering the following: 

Market Trends and Rental Potential 

The property market is affected by many factors including regulatory changes, interest rates and the economy. Any potential buyer of an investment property should undertake their own research to ensure there is a demand for rental property in the area. The landlord should pay attention to other factors that may affect rental income such as local amenities transportation links, location, crime rates,  and school catchment areas. It may be worth speaking to a local estate agent who is familiar with the area’s rental market to ensure there is adequate demand.

Property Condition

Assessing the condition of the property is essential to identify any works which may be required before the property is let. As part of any purchase, instructing a surveyor is highly recommended. Your surveyor will be able to inspect the condition of the property and flag any issues, including damp in the property, which is currently a significant issue being closed watched by industry specialist and the media. 

As a landlord, you must understand your responsibilities for the upkeep, maintenance and repair of the property, ensuring that your property is of a reasonable standard at the outset with the ultimate goal to avoid costly repairs in the future which may affect your maximum rental income.  

Buy to Let Mortgages 

Letting a property when you have a standard residential mortgage normally contravenes the standard conditions of the loan. Buy to let mortgages are available for landlords who want to purchase investment property. Typically, these mortgages are considered higher risk and lender’s requirements may differ from a standard residential mortgage. It may be worth speaking to a specialist mortgage broker before offering on a buy-to-let property to check if you meet lender’s requirements. 

Landlord’s Insurance 

As a landlord you are required to insure the property including landlord’s fixtures and fittings using a reputable insurer. Care must be taken to ensure that the insurance meets your requirements and demands and those of your mortgage lender. Specialist advice should be taken.


Your investment property purchase may be subject to Stamp Duty Land Tax. There may also be other tax liabilities payable such as Capital Gains Tax or Inheritance Tax. It may be worth speaking to a specialist tax advisor to check your potential tax liabilities before committing to your purchase. 

Statutory Requirements and Landlord’s Responsibilities 

Rental property is subject to extensive legislative and regulatory controls which have been developed over the years to help protect the parties. As a landlord, you will need to ensure you comply with the statutory requirements and keep yourself up to date with any changes.  

For example, prior to commencing the tenancy, landlords must ensure that:

  • The Energy Performance Certificate meets the minimum standard rating of ‘E.* efficiency. There may be further regulations in this area which require you to retrofit the property to meet energy efficiency requirements. 
  • The property has a valid gas safety certificate, and a copy must be provided to the tenant at the start of the tenancy. 
  • The property has a valid electrical installation certificate, and a copy must be provided to the tenant at the start of the tenancy.
  • The tenant has been served with the up-to-date ‘How to Rent Guide’
  • The landlord has registered the deposit with a Deposit Protection Scheme and provided the tenant has been provided with the required deposit scheme leaflet and information within 30 days of commencement of the tenancy.
  • The landlord must carry out Right to Rent checks on both the tenant and any occupiers aged 18 and over.

The landlord is responsible to carry out repairs and maintenance to the property within a reasonable time and using reputable tradesperson to complete the repairs to a reasonable standard. 

In addition, the landlord must ensure that a gas inspection is carried out by a Gas Safe registered engineer on a yearly basis. A copy of the certificate must be provided to the tenant within 28 days of the inspection. 

The landlord is also responsible for carrying out an electrical safety inspection every 5 years by a qualified electrician,  a copy of the report certificate must be given to the tenants once available. 

It may seem onerous for the landlord to keep up with their legal responsibilities however Failure to comply can have adverse consequences, including fines, imprisonment and being barred from letting private rental property. 

Renters Reform Bill

The Government has proposed the Renters Reform Bill which is currently making it’s parliamentary journey through the House of Commons.

The proposed legislation looks to singificantly shake up the private rental market and includes proposals such as

  1. Abolishing Assured Shorthold Tenancies (ASTs) and transforming all tenancies into assured periodic tenancies.
  2. Abolish the right for landlords to seek possession under Section 21 ‘No Fault’ notices.
  3. To enable tenants to request consent to keep a pet.
  4. The creation of a centralized Landlord’s Database in a bit to regulate landlords.
  5. A ban on discriminatory practices, such as not allowing children or tenants who are in receipt of benefits.

It is worth taking the proposed legislation into account when looking to buy an investment property as these changes may come into force and impact the investment market in an unprecedented way.

Owning an investment property can be an exciting step for landlords but it is prudent to ensure that you have undertaken extensive research and seek professional legal advice before embarking on the journey.**

*There were previously proposals to raise the minimum EPC rating from E to C. It was intended that this be enforced from 1st April 2025 for all new tenancies. However, in an announcement in September 2023, these proposals were scrapped. However, a future government may seek to revisit this in an effort to meet climate change target. 

**This article covers the situation in England. Tenancy arrangements will be different in Wales, Scotland and Northern Ireland.