Buy-to-let is an increasingly popular proposition for investment.  Cambridge has the highest concentration of buy-to-let properties in England, currently running at over 27% of all the properties in the City.

• Buy-to-let mortgages are different from ordinary mortgages. 
• There are three or four lenders who dominate the buy-to-let mortgage market.
• Curiously most main stream lenders will also lend for buy-to-let and often offer better rates. 

• Yields have historically reduced over the last fifteen years.
• Some Cambridge buy-to-let landlords only make 3%.
• Think about buy-to-let elsewhere. Consider areas where there is high demand for rented accommodation.  University towns as well as all the big cities are the obvious places.
• Be careful about buying in a place about which you know very little.
• If you do buy elsewhere find a property manager that knows the area. He can advise you upon lettability and rental levels and capital growth.
• Self-management is not sensible unless you actually live very close to the property.
• Remember maintenance and repair costs when calculating yield. In particular don’t forget the landlord’s responsibility to annually maintain the gas installations.
• Take your time.  Even if you are borrowing very little of the purchase price it is still a big investment and it could take time to unwind. 

Good gains have been made over many years. Ensure you use an experienced solicitor.  Miller Sands have dealt with numerous buy-to-let sales and purchases.

One recent change in legislation affecting buy-to-let properties is:

Tenancy deposit protection schemes

It is now compulsory for private landlords to lodge their tenant’s deposits with a tenancy deposit protection scheme.  This applies to any assured shorthold tenancy agreements signed or renewed since 6th April 2007.  To date there are three schemes authorised by the Government:

• The only custodial deposit scheme, whereby the landlord pays the deposit into the scheme.  This is run by Computershare Investor Services plc.
• There are two insurance based deposit schemes, whereby the landlord retains the deposit but pays an insurance premium to the scheme operators instead.  These are the Dispute Service Limited, which is aimed primarily at letting agents and Tenancy Deposit Solutions Limited which is sponsored by the National Landlords Association and is aimed at Landlords.

It is also compulsory for the landlord to notify the tenant within 14 days of the deposit being paid, which scheme the deposit has been lodged with.

Failure to register deposits with one of the authorised schemes means that the tenant can apply for a court order requiring the deposit to be lodged with a scheme, or for the landlord to notify them which scheme has been used.  The court also has the power to order the landlord to pay the tenant a fine of up to three times the amount of the deposit.