What costs make up the money you need?
- The deposit. 25% is the most common minimum for a buy-to-let mortgage.
- Stamp duty. In England and Northern Ireland, standard rates are 0% up to £125,000, 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million and 12% above that. You usually pay a further 5% on top if buying means you'll own more than one residential property. On a £100,000 investment home that's £5,000.
- Legal fees and searches. On the £62,000 terraced home in our guide Is Buy-to-Let Still a Good Investment in 2026?, legal fees, searches and acquisition costs were £1,965. That's one example, not a standard figure.
- Mortgage fees. Arrangement, valuation and broker fees vary by lender, so get them quoted.
- Works, if the property needs them.
- An empty period and letting costs, if there's no tenant in place at completion.
- A cash reserve, held separately, for repairs and empty spells.
How much cash do you need for the average home in each region?
The table shows the 25% deposit plus the stamp duty surcharge for the average home in each English region. Scotland and Wales have their own property taxes, so they aren't included.
| Region | Average price (July 2026) | 25% deposit | Stamp duty with 5% surcharge | Cash needed before other costs |
|---|---|---|---|---|
| North East | £166,943 | £41,736 | £9,186 | £50,922 |
| Yorkshire and The Humber | £209,116 | £52,279 | £12,138 | £64,417 |
| North West | £221,445 | £55,361 | £13,001 | £68,362 |
| East Midlands | £242,274 | £60,568 | £14,459 | £75,028 |
| West Midlands | £250,880 | £62,720 | £15,088 | £77,808 |
| South West | £302,298 | £75,574 | £20,230 | £95,804 |
| East of England | £337,518 | £84,380 | £23,752 | £108,131 |
| South East | £380,878 | £95,220 | £28,088 | £123,307 |
| London | £550,037 | £137,509 | £45,004 | £182,513 |
Prices: GOV.UK UK House Price Index, July 2026. Deposit and stamp duty are our calculations using standard residential rates plus the 5% surcharge, for a buyer who already owns another residential property. They exclude legal and mortgage fees, works, empty periods and a reserve.
What do the averages hide?
A London home costs about 3.3 times a North East one, but the cash you need to buy it is about 3.6 times as much. The reason is stamp duty. At these prices it works out at 5.5% of the price in the North East and 8.2% in London, because more of the price falls into the higher bands. Stamp duty is about 18% of the cash you need in the North East and about 25% in London.
So expensive areas cost more to enter than their prices suggest. If you're choosing where to invest, count the tax before you compare prices. Our guide to the best places to invest in UK property compares regions on prices, rents and forecasts.
What could £50,000, £100,000 or £250,000 cover?
Using the same method (a 25% deposit plus the stamp duty surcharge, spending all your cash):
| Cash available | Highest-priced home it could cover | What that means |
|---|---|---|
| £50,000 | About £164,000 | Close to the average North East home (£166,943 needs £50,922) |
| £100,000 | About £314,000 | Covers the average home in six English regions: North East, Yorkshire, North West, East Midlands, West Midlands and South West |
| £250,000 | About £743,000 | Covers the average home in every English region, including London |
These are ceilings, not plans. They leave nothing for legal and mortgage fees, works, an empty period or a reserve, so a realistic purchase is lower. Don't spend your last pound on the deposit.
What do lenders look for?
Lenders usually set a minimum deposit. Pepper Money says buy-to-let deposits start from 20%, with 25% the most common and 15% rare and difficult to qualify for. They also check the rent covers the mortgage: MoneySupermarket says lenders will usually expect rent of 125% to 145% of the monthly mortgage payment. For example, if your monthly payment is £200, the rent would usually need to be £250 to £290.
Lenders' terms change, and each sets its own, so check with a mortgage broker before you plan around a figure.
Which route needs how much?
| Route | What you need upfront | Trade-off |
|---|---|---|
| Cash purchase | The full price plus stamp duty and costs | No interest or lender conditions, but the most capital tied up |
| Buy-to-let mortgage | The deposit plus stamp duty, fees and a reserve | Less cash in, but interest costs, lender rules and rate risk |
| Buy, refurbish, refinance | The purchase, the works and holding costs upfront; some cash is released at refinance | More capital and time upfront; depends on the revaluation and a lender |
| Buying with others | Your share of everything above | A smaller amount each, but needs a clear legal agreement |
Can you put in less of your own money?
Some investors use other routes to reduce the cash they put in. Each one moves risk around rather than removing it, so get advice from a mortgage broker and a solicitor first.
| Option | How it works | Main risks |
|---|---|---|
| Private funders and partners | Someone else supplies some or all of the capital, in return for interest or a share of the profit | Needs a clear written agreement and legal advice. Raising money from others can fall under financial services rules, so check before you do it |
| Lease option | You rent the property with the right, but not the obligation, to buy it later. Upfront costs are typically a small deposit, first month's rent and legal fees | The owner's mortgage lender may need to approve it. If the owner defaults, you could lose the property. The agreed price could end up above market value. Protect it by registering a restriction at HM Land Registry and making sure the owner has independent legal advice |
| Vendor finance | The seller acts as lender, for example through instalments, a final lump sum or a lease option | Costs can be higher than a normal loan, disputes over terms are possible, and both sides should take tax and legal advice |
| 100% bridging finance | A short-term loan covers the whole price by using other property you own as extra security, so no cash deposit is needed. Terms are typically 3 to 18 months and interest is usually rolled up and repaid at the end | You need a credible exit, such as a sale or refinance. If the exit fails, you risk the other property as well. Loans for investment are usually unregulated; loans secured on your own home are regulated |
Bridging costs add up quickly. FD Commercial's guide (October 2026) quotes arrangement fees of 1% to 2%, valuation fees of £500 to £1,500 and interest from 0.55% a month, and gives an example where three extra months at 0.8% a month on £500,000 adds £12,000. Delay is the main risk, so any plan that depends on a quick refinance or sale needs a stress test.
None of these changes the underlying maths. Stamp duty and other taxes can still apply, and the property still has to work on its own numbers. Use our buy-to-let calculator to test it.
How much should you keep in reserve?
There's no fixed figure. Size it from your own bad case: an empty spell, a rate rise and a repair. A roof or boiler comes out of your reserve, not your maintenance allowance. Keep it separate from the money you invest, and don't count it in your total investment.
How we approach it at Akoya
We sell fully refurbished terraced homes in County Durham to investors who live elsewhere, so weigh our view accordingly. The average terraced home in County Durham costs £117,000 (ONS, July 2026, provisional). On the same method that's a £29,250 deposit and £5,850 stamp duty, so £35,100 before other costs. Because our homes are already refurbished and tenanted, there are no works to fund and no empty period to cover. Across the buy-to-let homes we sell, the average time from reservation to completion is 3 to 4 weeks, so your cash is committed for a short time before rent starts.
Where an investor needs funding, we introduce them to a broker who specialises in their situation, and we have long-standing relationships with private funders. We're not regulated by the FCA and don't give financial advice, so speak to an authorised mortgage broker and a solicitor about any funding route. Our reasoning for focusing on the county is in Property Investment in the North East. If you'd like us to run your own numbers, talk to us about investing or see the current buy-to-let stock.
Common questions
How much do I need to start investing in property in the UK? It depends on the price and the route. On a buy-to-let mortgage you typically need a 25% deposit plus stamp duty, fees and a reserve. A £100,000 home needs £30,000 for the deposit and stamp duty alone, and a £60,000 home £18,000, both before other costs.
What deposit do I need for a buy-to-let mortgage? Most lenders ask for at least 25%, with a range of 20% to 40%. Lower deposits are rare and harder to qualify for.
How much is stamp duty on a buy-to-let? In England and Northern Ireland you usually pay the standard rates plus a 5% surcharge if buying means you'll own more than one residential property. On £150,000 that's £8,000. Scotland and Wales have their own taxes.
Can I invest in property with less than £50,000? Yes, at lower prices. A £100,000 home needs about £30,000 for the deposit and stamp duty, before other costs. Lower prices need less cash, but check the local demand and the condition of the home. Buying with others can also reduce your share, but it needs a clear legal agreement.
How much cash should I keep in reserve? Size it from your own bad case rather than a rule of thumb. Our calculator can help you test it.
This article is general information, not financial, tax or legal advice. Akoya is not regulated by the FCA.
Sources
- GOV.UK: Stamp Duty Land Tax residential rates
- GOV.UK: UK House Price Index summary, July 2026
- ONS: Housing prices in County Durham
- MoneySupermarket: How much deposit do I need for a buy-to-let property?
- Pepper Money: How much deposit do you need for a buy-to-let mortgage?
- FD Commercial: How bridging loans work
- Respect Capital: How 100% bridging loans work
- Bishop's Law: Purchase lease option solicitors
- The Business Funds: Vendor finance