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Buy-to-let: Bricks and mortar could bolster your finances

Whether it’s a place for the future, a family member or to fund your retirement, buying a property to rent out could help

2 min read

There’s just something about property.

Even beyond buying your own home, a major milestone for many, owning bricks and mortar to make more of your money can be extremely fulfilling. Buying a place to rent out could give you a potential new source of income now, as well as being a long-term investment for the future.

It can also fit nicely with so many situations in life. You might be approaching retirement and looking for an alternative to investing through a pension, buying a property for your child to live in one day or have as an asset in their name, or looking for ways to diversify your investment portfolio.

Some people buy a property for themselves that they don’t need just yet – perhaps in the place they plan to move to when they retire or start a family. Others simply want do it to as a way to generate an income – simple as that.

Whatever the reason, there’s a permanency about property that can draw people to it. Obviously, there are risks – house prices can fall and there are usually mortgage payments to meet whatever happens. Also, you may struggle to find tenants, there are maintenance costs to cover and stamp duty to pay (although the government recently announced a temporary holiday on stamp duty on the first £500,000 of property sales across England and Northern Ireland). If you’re interested, then it’s definitely worth talking to an expert to see how it could complement your broader financial planning, and to discuss the other options available.

But with that all in mind, many are still pulled to property quite simply because it’s real. You can touch it. And that matters.


Potential deals as house prices could fall this year

If you have the urge to buy-to-let, the government’s stamp duty holiday, which runs until the end of next March, could make this a good time to act. It could save buyers up to £15,000, based on current stamp duty charges.

Coutts property expert Katherine O’Shea says it’s therefore “a strong incentive” for anyone thinking of buying somewhere to rent out.

She adds: “The government’s 3% stamp duty surcharge on buy-to-let properties still applies, but the recent changes certainly provide a window of opportunity to those who had been considering expanding their property portfolio.”

“Recent changes certainly provide a window of opportunity to those who had been considering expanding their property portfolio.”
Katherine O’Shea, Coutts Real Estate Investment Service

How we could help

Whatever your reason, and whatever your timing, our range of mortgage options could be tailored to your buy-to-let needs. Here are just some of the benefits we could provide:

  • you could take out a buy-to-let mortgage with us for one property or several, expanding your investment as much as you want
  • we’re one of the few lenders that provides an ‘offset’ buy-to-let mortgage, meaning you could use your bank deposits to reduce the total sum you pay interest on, or pay off the mortgage sooner
  • as well as providing mortgages for individuals, we have special purpose vehicle (SPV) buy-to-let mortgages, allowing you to borrow under a UK or offshore company structure

And once you’ve bought your new investment opportunity or future home, we could also provide development finance to help you do it up if necessary.

Buying any property for any reason can be daunting and often involves tough choices. If you’re considering buy-to-let, our financial planning experts can guide you through the process and help you every step of the way.

To find out more, speak to your private banker or call Coutts 24 on 020 7957 2424.

Important information

A Coutts Offset Select Mortgage may not be suitable where Offset Deposit account holders may need access to their funds to an extent that could significantly diminish the benefits of the product, or don’t have any deposits to offset for the duration of the borrowing.

It’s important that you understand the risks related to using foreign currency deposits against your Offset Select mortgage:

  • Negative rates currently apply to deposits based in euros above €250,000.
  • The value of foreign currency Offset deposits could fall in relation to the sterling mortgage balance if foreign exchange rates change, substantially reducing the mortgage savings.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

Coutts Offset Select for mortgage amounts over £750,000. Over 18s only. Terms and conditions apply. You may not be eligible for all Coutts mortgage solutions.

We’re committed to supporting clients who may be affected by coronavirus and have robust plans in place to minimise any disruption to our service.


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