What landlords and property investors need to know about financing in SE10.
Greenwich is one of London’s most historically significant and well-connected areas. Located in the Royal Borough of Greenwich, the SE10 postcode covers the historic town centre, the riverside, the famous park and Royal Observatory, and a range of residential streets that attract a diverse mix of tenants. DLR services connect Greenwich to Canary Wharf in minutes, National Rail runs to London Bridge and Charing Cross, and the Elizabeth Line now serves Woolwich, a short distance away, bringing much of central and west London within straightforward commuting range.
This connectivity, combined with strong rental demand from young professionals, students at nearby universities, healthcare workers, and those drawn by the area’s cultural offer, makes Greenwich an area that many landlords and property investors actively consider. This guide sets out what you need to know about financing a buy-to-let property in the area.
Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.
Buy-to-let mortgages have different criteria to residential mortgages and are assessed in a distinct way. The most important factors are the deposit required, how the rental income is assessed, and whether you meet any personal income requirements the lender may have.
The minimum deposit for most BTL mortgage products is 25% of the purchase price, which means borrowing at a maximum of 75% LTV. Some specialist lenders will consider lending at 80% LTV (a 20% deposit), but rates at this level are typically higher and the number of available products is smaller. A larger deposit of 35-40% or more generally unlocks the most competitive rates.
Rental income assessment is central to BTL lending. Lenders apply an Interest Coverage Ratio (ICR) test: the projected monthly rental income must cover the monthly mortgage interest payment by a minimum specified margin. The exact ICR required varies by lender and by the tax position of the borrower. For basic-rate taxpayers, lenders typically require rental income to cover at least 125% of the interest payment at a stressed rate (a rate above the actual product rate, often 5% to 6.5%). For higher-rate taxpayers, lenders may apply a higher ICR requirement, sometimes 145% or more, to account for the reduced tax relief available under Section 24. This directly affects how much you can borrow against a given property and rental income.
The majority of buy-to-let mortgages are arranged on an interest-only basis. On an interest-only mortgage, your monthly payments cover only the interest charged, not the underlying capital. The loan balance remains the same throughout the term and must be repaid in full at the end, typically from the sale of the property or from another capital source. Interest-only payments are lower than equivalent repayment payments, which maximises monthly cash flow for the landlord.
Repayment (capital and interest) BTL mortgages are available and may suit landlords with a long-term goal of owning the property outright, or those who are less comfortable with the residual debt at the end of the term. Monthly payments are higher, but the outstanding balance reduces over time.
One of the most significant decisions for property investors in Greenwich is whether to purchase as an individual or through a limited company. This decision has substantial tax implications and the right answer varies considerably depending on personal circumstances.
Section 24 of the Finance Act 2015 restricted the mortgage interest tax relief available to individual landlords. Prior to the changes, individual landlords could deduct their full mortgage interest costs from rental income before calculating their tax liability. Under the current rules, individual landlords receive a tax credit equivalent to 20% of their mortgage interest costs, the basic rate of income tax, regardless of their actual tax rate. For higher-rate and additional-rate taxpayers, this restriction significantly increases the effective tax cost of holding properties personally.
For this reason, many landlords with larger portfolios or higher income have moved toward purchasing BTL properties through a limited company, where the full mortgage interest remains deductible as a business expense. Corporation tax applies to profits, and the company structure can also offer advantages for passing on a portfolio over time.
However, the limited company route is not automatically better for everyone: there are additional costs (incorporation, accountancy, company mortgage products which are sometimes priced differently), and extracting profits from a company has its own tax implications. Tax treatment depends on individual circumstances, always seek independent tax advice before proceeding.
If you already own four or more mortgaged buy-to-let properties (including the one you are looking to purchase), most lenders will classify you as a portfolio landlord. Portfolio landlord assessment involves a more comprehensive review of your entire portfolio, individual properties, their rental income, existing mortgage balances, void periods and overall portfolio sustainability, rather than just assessing the new purchase in isolation. Not all lenders accept portfolio landlords, and criteria vary considerably. A broker experienced in BTL can identify which lenders are most suitable for your portfolio profile.
Rental yield is the standard measure of a BTL property’s income return. Gross rental yield is calculated by dividing the annual rent by the purchase price and expressing the result as a percentage. For example, a property purchased for £400,000 that achieves £20,000 in annual rent has a gross yield of 5%. Net yield accounts for costs such as management fees, maintenance, insurance, and void periods, and will be lower.
Greenwich tends to attract investors who accept relatively moderate yields in exchange for capital growth potential and low void risk, the area’s consistent rental demand means well-maintained properties are rarely empty for long. The trade-off between yield and capital growth is a key consideration for any investment decision.
Buy-to-let mortgage applications involve more variables than residential cases, and the criteria across lenders differ significantly. A whole-of-market broker can identify which lenders will accept your tax structure, which have the most suitable ICR requirements for your specific rental income, and which products offer the most competitive rates for your LTV and portfolio size. This is particularly important when purchasing through a limited company, where the number of lenders is smaller and expertise in the sector matters.
Important: Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. This article is for general information purposes only and does not constitute financial or tax advice. Tax treatment depends on individual circumstances. Always seek independent professional advice before making any investment decision.
The Mortgage Consultancy advises landlords and property investors across Greenwich, SE10, and the wider Royal Borough of Greenwich. We are authorised and regulated by the FCA and have extensive experience with both individual and limited company BTL applications.
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