Blog / Landlords | 18 Mins Read

Is Buy to Let a Good Investment Near Peterborough?

Name: Is Buy to Let a Good Investment Near Peterborough?
Brand: Progressive Lets
Rating: 4.9 (499 reviews)

By Wayne Beecham | Created on 3rd March 2025

If you have spare cash and want an investment opportunity, it’s worth considering a property purchase.

Buy-to-let property investment could bring you a much higher return than most savings products. But before you start looking through the property portals, consider whether it is right for you.

Property can make an excellent long-term investment if you can hold on to it for a long time. However, there are risks, responsibilities and costs to consider, so ensure you understand what is involved, get the right advice and do your sums. We answer a few frequently asked questions to help you learn more about the things to consider before buying your first buy-to-let property in Peterborough or around Cambridgeshire, Northamptonshire, or anywhere in England.

So, let’s say you’re buying your first buy-to-let property – what do you need to ask, and where do you start? Find out how to make your first buy-to-let property investment step-by-step here.

What Is A Buy To Let Investment And How Does It Work?

Pretty much what it says on the tin – a property you buy with cash or a mortgage to bring in a rental income each month. When you invest in property and become a landlord, the aim is to make a profit after deducting costs (the property’s rental yield). You could also make a profit when you eventually sell.

Before buying your first buy-to-let property, do your calculations and ensure that the rental payments are higher than your outgoings. Maintenance costs, agency fees, and buy-to-let mortgage repayments soon stack up.

Is A Buy To Let Investment Right For Me?

Owning a buy-to-let property is a business venture, and you need to take it seriously and have the time to devote to all the duties which come with being a landlord. Understand the risks before you take the first step to buying a property to rent out.

Your tenant may not pay their rent, or the value of your property may go down. Be sure that these won’t put your financial security in danger.

Want to be a more informed landlord? Know what to do if your tenant stops paying rent, what happens when a tenant has a pet without permission, and brush up on the Renters’ Rights Act.

What Are The Risks That Come With Buy To Let Investments?

It’s a longstanding method of earning and as a retirement investment option, but there are risks to making a buy-to-let investment. You will be reliant on tenants, the property market and your own strategies.

Here are some key factors to consider…

Tenants – your property investment’s yield depends upon you having tenants in the property and them paying their rent each month. Problems arise if you struggle to find tenants or an issue with the property makes it uninhabitable.
Legal responsibilities – landlords must learn and stay on top of a large number of rental regulations, or you could face legal repercussions.
Tax implications – you will have to pay income tax based on any other work you do, as well as your rental property investment. This can push you into a higher tax bracket, so watch your earnings carefully.
Mortgage & bills – you are ultimately responsible for covering the mortgage – and the utility bills if the property is vacant.
Rental arrears – a tenant with rent arrears is a risk at any time, but events beyond your control can affect your tenants’ ability to meet their rent too. This can lead to lost income and the potential for further, costly eviction procedures.
Market forces – property prices do rise in the long term, but the property market can be unstable. If you need to sell the property earlier than planned, it may have fallen in value, and you will need to be able to meet the shortfall to pay off your mortgage.

What Advantages & Returns Do You Get From Buy To Let Property?

There are two ways in which your investment property will pay out, rental yield and capital growth, but can be other benefits as well.

Rental yield – the rent you receive minus costs expressed as a percentage.
Capital growth – how much you make on the property when you sell it. You could gain on the property’s entire value (less costs etc.) even if you started out with just the deposit amount.
Flexibility – relative freedom over how you spend, save or reinvest your profits.
Demand – choose the best area and property for your target market and you could see consistent demand.
Greater control – landlords can make hands-on decisions to manage their investment.
Help is available – there are many experienced property and finance experts to offer advice.

Are Buy-To-Let Property Investments Safe And Secure?

As with all investments, house prices can go down as well as up, and nothing is ever completely safe and secure. However, it is not a short-term investment, and if you take due diligence with a long-term strategy in place, investors can earn profitable incomes in the mid and long-term.

Property investors widely consider the UK a safe-haven, and the buy-to-let market has a good track record of delivering rising yields and growing capital.

While nothing is certain, buy-to-let offers a secure investment for many people. Ongoing rental demand makes it possible for monthly rent to provide returns in the short term. Rising property prices can’t be guaranteed, but the prospects of capital appreciation and scarcity in the housing market can lead to capital gains in the long term.

What If I Need To Access The Money I Have Tied Up In My Investment?

If you think you need access to your cash, buy-to-let is probably not your investment as you’ll be tied into various contractual obligations. Your tenants have rights, and your mortgage lender will have certain terms you need to abide by. Here are some of your options if you need to part with your investment property at short notice:

Sell with sitting tenants. Selling a property with sitting tenants restricts your market to other investors. You must negotiate viewings with the tenants, and smooth over any concerns.
Ending the tenancy. If you need to get your tenants to vacate the property first, you will need to follow a strict procedure. You can’t ask them to leave during the initial period of a tenancy, and will need to follow set notice periods according to your contract and the notice you serve.
Extend your mortgage. Your only other option would be to extend your mortgage, but this would be at the discretion of your lender. Don’t overlook the potential hurdles when you test your potential investment with a mortgage calculator.

Buy To Let Mortgages For Your Property Investment

What is a buy to let mortgage & will I need one?

So, how can I buy my first buy-to-let? If you don’t have the cash to buy your investment property outright, you must take out a buy-to-let mortgage. A standard residential mortgage won’t be suitable, and more to the point, most lenders will insist you take out an appropriate deal. The risks are different, and the rates and terms they offer are tailored specifically to investors.

Approach an independent mortgage broker who can help you access a range of deals for your first buy-to-let property. They can be valuable, often sourcing deals that aren’t available independently.

How do buy to let mortgages work?

The financial risks of renting out a property differ, and so is how your lender will assess your investment. You need to demonstrate that it can cover the mortgage payments when buying a first buy-to-let – possibly around 145% of the monthly cost of your loan.

How much deposit for buy to let mortgages?

You need a larger deposit for a buy-to-let mortgage – at least 25%, though it can go as high as 40%. This is because your rental loan is considered riskier than one on a residential property.

Are buy to let mortgages more expensive?

Buy-to-let mortgages can cost more, with higher interest rates and fees, but repayments work differently. Despite the higher mortgage rates, most buy-to-let loans are interest only, so you won’t pay off your borrowing until the end of the mortgage term. The upfront fees tend to be higher on low interest buy-to-let mortgages, so check carefully and do the maths to find the best deal.

How much can I borrow with a buy-to-let mortgage?

Your borrowing will be based on your property’s potential rental income – lenders typically expect this to be 25% to 45% higher than your monthly mortgage payments. Online mortgage calculators can give you a rough impression of mortgage rates and how they affect your borrowing potential.

Can you change your mortgage to buy-to-let?

Ask your lender about changing your mortgage from residential to buy-to-let, though you’ll essentially be remortgaging so you’ll have to meet affordability checks and sign up to a new agreement. Alternatively, shop around for a deal by approaching a broker. However you proceed, find out exactly which fees you’ll pay if you change your mortgage during the term.

What Sort Of Buy-To-Let Property Should I Buy?

When buying a buy-to-let property, look for one that fits your potential tenant’s needs, lifestyle, and overall yield requirements.

Make a list of what you seek from your investment – here are some points to weigh up.

Choose a suitable location

Select a location with tenant demand when buying your first buy-to-let property. For Peterborough’s commuter market, look for properties with good transport links. To attract students, think about campus location.

Level of maintenance needed

Peterborough’s properties range from pristine new-build developments to Victorian and Edwardian terraces with period features. Do you want a modern or characterful property that may need some maintenance and upkeep? It’s a good idea to consider the age and condition of your first buy-to-let property and the implications for your energy performance certificate (EPC).

Other considerations

Will a garden seal the deal for your target tenants? Consider the added convenience of parking, transport links and proximity to local amenities.

Does The Type Of Tenant Matter?

As a landlord, you probably already have an idea of the ideal tenant you would like to attract. Understanding your tenants will help you to manage your expectations and build a good, mutually beneficial relationship between both parties.

Type of tenants

The property type and location will dictate the potential tenants you attract. In Peterborough, a two or three-bedroom house will usually appeal to young families – ideally, a spacious home with plenty of storage.

If that’s beyond your budget, shift your location to somewhere popular with young professionals who will prefer a flat. Townhouses are popular with younger people, while bungalows can suit older people. Since the Anglia Ruskin University Peterborough campus opened in 2022, you may also consider marketing to Peterborough’s student population with an HMO.

What About The Location For My First Investment Property?

If you’re new to buy-to-let investing, using your local knowledge is a good idea. You’ll have a head start with picking the best neighbourhoods to focus on if you select a nearby area you know well. Plus, you’re close if you need to access the property. But you can find a good agent to manage the property if you live further afield.

Not sure how to buy your first buy-to-let property in the right location for the right budget? Research the local property market and speak to local estate agents to understand what you’ll get for your money and who your target tenants will be.

Buy to let costs to calculate

As well as your monthly mortgage, you’ll need to pay for initial and running costs, so do the maths or use an investment calculator. Before considering how to buy your first rental property with no money (or close enough), make sure your budget can cover these unavoidable bills:

Initial property investment costs

Be prepared to pay buy-to-let mortgage arrangement fees, surveyor and solicitor fees, and cover stamp duty. Once you’ve bought a property, you must prepare it for your first tenants. This will include arranging repairs and redecorations, purchasing furniture and appliances, and organising landlord safety checks.

Tenants expect a good standard of decoration, and while it doesn’t need to be high-end, it does need to look clean and fresh. If this isn’t for you, choose a newer property in good condition. Arrange an EPC, Gas Safety Check and Landlord Electrical Check promptly – you can’t rent your property without them.

Running costs of a rental property

Many landlords underestimate the costs involved in renting property.

Mortgage payments: Most buy-let-let mortgages are interest only, so you’ll only be paying the interest on the mortgage each month. Ensure you have a plan for repaying the total amount when your mortgage term is up.
Landlord insurance: Standard residential insurance policies will not cover you if you rent your property. Building and contents insurance are the basics, but you can add on other landlord insurance such as rent guarantee insurance and legal cover,
Service charge for leasehold properties: Most flats are leasehold and will have a regular service charge.
Periodic safety checks: Your Gas Safe certificate must be renewed annually and your electrical certificate every 5 years. Good landlords also conduct annual PAT testing for electrical appliances they provide.
Landlord licensing: Some landlords will require a landlord license. Check your local council’s website.
Finding tenants: Most landlords use a letting agent to advertise their property. The leading property portals, such as Rightmove and Zoopla, don’t deal directly with landlords.
Credit checks and referencing: At the very least, you should pay for a credit check for your prospective tenant. If you use a letting agent, this is usually covered in the cost.
Ongoing maintenance and repairs: It is hard to predict how much you will spend on maintenance, but a rough guide is to budget an annual spend of 1% of the property’s value.
Letting agent management fees: A letting agent will handle all aspects of renting your property. You can save money by managing the property yourself, but it’s a significant time commitment, and you must conduct all your duties to the letter.
Income tax: Landlords will pay income tax on their profit.

Do I Want Capital Growth Or Good Rental Returns?

Rental return (yields) and capital growth are the two ways that property investors or landlords can make money. It is essential to fully understand what these mean and how they work to maximise your investment.

You should consider them together when planning the purchase of a property, as they are both important. A combination of both will bring you the most return. However, the rental yield and capital appreciation are always estimates, and you should seek professional advice to feel confident with your investment decisions.

What Are My Responsibilities As A Buy To Let Landlord?

There’s a raft of legislation to protect tenants, and landlords must get up to speed with it – or risk a heavy fine. These range from the requirement to check the immigration status of potential tenants – so-called right-to-rent checks – to how often you’ll need to inspect your gas boiler and which documents must be issued to your tenants when they move in.

can i buy my first property as buy to let

Health and safety responsibilities

Landlords must meet their legal responsibilities on health and safety standards with no excuses. Landlords are legally required to renew their Gas Safe Certificate annually. Landlords should also ensure that gas appliances and fittings are all safe at the beginning of a new tenancy, as the previous tenants may have caused damage.

The Electrical Inspection Condition Report (EICR) should be renewed every five years, and portable appliances you supply should be PAT tested annually to ensure they are safe.

All rental properties need a working smoke alarm on each floor, and a carbon monoxide alarm in any room with a solid fuel burning appliance. For instance, a gas fire. You can read more about smoke and carbon monoxide alarms in our article.

Deposit protection

As a landlord, you’re legally obliged to place your tenant’s deposit in a government-approved Tenancy Deposit Scheme. There are severe consequences if you don’t follow the rules.

Right to rent checks

Right-to-rent checks are the landlord’s responsibility – but a good letting agent will take care of this for you. You must check tenants’ identification to ensure they can legally rent in the UK.

Energy efficiency

Did you know you need an energy performance certificate (EPC) before marketing your property? Arrange for an assessor to inspect your property – they will issue the certificate along with a rating from A to G. You can’t rent out your buy-to-let property unless it meets or exceeds an E rating. The government has planned to tighten the rules, seeking a minimum C rating on the EPC by 2030. If your property falls short, you can improve energy efficiency through modest changes or more costly work.

Other responsibilities

HMO licensing – you need an HMO licence to operate an HMO in England.
Selective licensing – Peterborough City Council has proposed a new selective licensing scheme for private landlords in designated neighbourhoods.
Accreditation – if you rent out property in Peterborough you can apply for landlord accreditation.
Freeholder permission – you need permission from the freeholder before renting out a leasehold property.

What Tax Do I Need To Pay On My Rental Property Investment

Don’t forget that you’ll have to pay tax on your rental income, stamp duty when buying an investment property, and capital gains when you sell.

Tax on rental income

You will pay income tax on the money you make from your property – register for self-assessment if you don’t already file an annual tax return. Landlord costs, such as letting agent fees, insurance and maintenance, can be offset against your income. Since April 2020, landlords can’t claim mortgage interest as an expense. Whether you pay the basic or higher rate depends on the combined income from your landlord business and any other income (e.g. pay from your day job). However, landlords can claim mortgage interest tax relief limited to 20% basic rate Income Tax.

Capital gains tax on selling a rental property

When you sell your buy-to-let, you will need to pay capital gains tax on the rise in value – unlike with the sale of your main residence. There is currently a tax-free allowance – £3,000 for 2024/25. These are some of the tax liabilities you should expect to pay.

Stamp duty on buying a rental property

Stamp land tax is the tax you pay on house purchases, and the rate rises depending on the selling price. When buying your first buy-to-let property, you will pay stamp duty on your buy-to-let – even if it’s your first purchase. First-time buyer rates won’t apply. As a buy-to-let investor, you must also pay a 3% surcharge.

Take a look here to calculate the costs of stamp duty and CGT using a professional grade property calculator.

Want to be a more informed landlord? Discover the best way to collect rent, what’s involved in inheriting a house, and the rules on smoke and carbon monoxide alarms in rental properties.

Do I Need To Take Out Insurance As A Buy To Let Investor?

There is no legal obligation to take out landlord insurance, but it certainly makes sense, and bespoke landlord buildings and contents products are available. You won’t be able to take out standard residential policies. There are various products on the market, and you should also consider landlord liability insurance if a tenant or guest is injured on the premises, and rent guarantee cover if your tenant fails to pay their rent.

Do I Need To Use An Agent And How Much Will It Cost?

There are pros and cons to managing the property yourself or using a letting agent. If you do it all yourself, you will save money and have more control over your buy-to-let business. However, letting agents are experts in their field can be more convenient and save you time and money.

Letting agents usually offer a few service levels, from finding suitable tenants and arranging the tenancy to full property managing, including rent collection and sorting out any repairs and maintenance. Fees can vary dramatically and depend on the property’s location and the specific services you require.

In most cases, agents charge a percentage of the monthly rental fee, which can range from below 10% to above 20% for full management. They will usually charge a one-off fee if you require a letting-only service.

Where Can I Find Out More?

If you think buying an investment property might be a good move for you and you’re looking in the Peterborough area, Northampton, Stamford, Boston or Rushden, we can help. Contact us to discuss your situation and learn more about our current selection of investment properties.

FREE Landlord
Compliance Checklist

Use our 63-point checklist to verify
that your rental property is compliant

Download Now

Got a question?

Wayne Beecham

Wayne is East Midland’s answer to property management. His hard work and high standards of service have gained him a fierce reputation within the regional lettings market. He knows what it takes to own and manage a profitable portfolio himself, because he is not only a successful investor and landlord, but co-founder and “hands on” managing director of Progressive Lets.

Landlord Checklist for Renting a House in Peterborough

Landlords | 12 Mins Read

Find Your Property