Buy To Let
Existing home owners can remortgage to raise a deposit to buy a property for investment purposes. Similarly Property Investors can make a deposit. Typically a 15% deposit is required. The rest of the purchase price is usually financed with a Buy to Let mortgage. Buy to Let is considered to be a commercial venture and so you can offset the mortgage interest payments against tax on the rental income. The tax benefit only applies to the interest element and not the capital element of a Buy to Let mortgage. The tax advantage works best on an interest only mortgage.
Alternatively it is possible to arrange a Let to Buy mortgage where you buy a property to move in to yourself and let out your existing property.
Capital Gains Tax
Any property that is not classed as your main residence could be building up a Capital Gains Tax (CGT) liability for the future.On the sale of such a property you would pay CGT on the "profit " above your personal annual CGT exemption. A fuller explanation is available on request.